Mistakes in PE Case Study - what are my chances?

I recently took a < 8hr case study and modelling test for a top tier PE team. Made it through almost a dozen interviews which all went really well. 

I didn't have enough time to check all formulas because of the time pressure (understanding case, finding right assumptions to use, building model and writing thesis). 

I made a lot of mistakes in linking debt//cash balances, adding instead of subtracting etc but the LBO was well laid out and formatted, gave sensible outputs and was flexible enough to run multiple (complicated) cases and sensitivities.

I also made a recommendation and backed up my assumptions.

What do you think will happen?  What would they usually be looking for 

 

(Ignore the profile thing, I'm a 3yr analyst)

Comments (19)

 
  • Intern in PE - LBOs
Feb 17, 2021 - 7:53pm

I once made 2-3 mistakes on an LBO modeling test, acknowledged them in the present, and ended up with another offer.

 

Another time, I made a couple of mental math errors in an interview, and in my thank you email, acknowledged them and specified that I do know the answers, but just whiffed in the interview.

 

Did you acknowledge your mistakes?

 
  • Intern in IB - PubFin
Feb 18, 2021 - 3:31am

 

I once made 2-3 mistakes on an LBO modeling test, acknowledged them in the present, and ended up with another offer.

 

Another time, I made a couple of mental math errors in an interview, and in my thank you email, acknowledged them and specified that I do know the answers, but just whiffed in the interview.

 

Did you acknowledge your mistakes?

Yes, I acknowledged a few of the mistakes and the interviewer emphasised that they expected mistakes.

But there were also mistakes that I hadn't picked up on until after we had spoken. My worry is they assume I didn't know what to do rather than it being a mistake. 

 
Feb 17, 2021 - 8:52pm

The reality is that it depends on if the other people interviewing didn't make as many mistakes. Any solid firm is generally interviewing several candidates through final rounds. 

As a person who has had to check a case study or two, I usually try to weed out ones where there is simple stuff wrong like the balance sheet doesn't balance or the revenue growth should be 5% a year and they didn't anchor the growth rate on all of the cells so or something. 

 
  • Intern in IB - PubFin
Feb 18, 2021 - 3:33am

fromtheshadows

The reality is that it depends on if the other people interviewing didn't make as many mistakes. Any solid firm is generally interviewing several candidates through final rounds. 

As a person who has had to check a case study or two, I usually try to weed out ones where there is simple stuff wrong like the balance sheet doesn't balance or the revenue growth should be 5% a year and they didn't anchor the growth rate on all of the cells so or something. 

You try to get rid of the ones that make simple mistakes? 

 
Feb 18, 2021 - 1:33pm

I'm based in Europe and people seem to not care about balance sheet balancing so much in time constrained modelling tests. They care more about doing what you can in your P&L and CF correctly and enough that you can give a well thought through investment recommendation. I have made mistakes in my models before where I was passed to the next round. I guess it all depends on the mistakes like you said but BS not balancing is not a big deal in general from what I see.

Can't comment on cases where they give you more than 24 hrs to complete tho.

 
  • Analyst 3+ in PE - Other
Feb 18, 2021 - 3:59pm

Thanks! It wasn't a 3 statement LBO, just a complex base case and mountains of data to understand to build in the right assumptions - so the only obvious problems are in the formulas and beg/ending balances.

 

At a glance you won't notice, changing cases you won't, but in a relatively simple review you definitely would. 

 
Feb 18, 2021 - 3:48pm

Do you still have your model or had to delete? I've posted before that I look favorably upon candidates who actually send me an updated model with their mistakes fixed (shows willingness to learn, further dedication to the recruiting process, etc.). I can't guarantee that all interviewers will view this favorably, but my team does (particularly when it's genuine and improved).

 

You could consider a, "I know that I already submitted this, but I've been going back over my model and identified these areas where I erred. If helpful, attaching an updated version...".

 
  • Analyst 3+ in PE - Other
Feb 18, 2021 - 3:56pm

I did offer to share the updated model during the interview, and I followed up with additional detailed qualitative commentary on the case, but I got the hint not to share another model. 

I'm assuming it means the presentation was the only time they would review the model, but could also be to keep a fair process - especially because there was a day between submitting and presenting. Hopefully the former.

 

 
Feb 18, 2021 - 4:04pm

Totally get it. Sounds like you've done all that you can. Best of luck. FWIW, my model was busted back when I recruited 5 years ago and still got the job. Can be done (and still be successful in the industry)!

 
Feb 20, 2021 - 5:32am

I'm actually pretty surprised at the above responses. In my experience both recruiting and evaluating candidate models, we would almost always cancel out people who had mistakes throughout their model. It's one thing to have fat-fingered something but have the model flow still, but having several mistakes in linking which affect the actual flow of the model will usually be an automatic no, especially from a large fund.

 
  • Analyst 3+ in PE - Other
Feb 20, 2021 - 5:35am

Interesting and thanks. The thing is the model still flows in the sense that the base case runs perfectly, aside from one minor error. However, some of the other cases have issues because of linkages in parts that aren't fully needed/asked for. 

 

So it runs as it should, unless we try a few different cases. Also this wasn't a take home and included a thesis. What do you think? 

 
Feb 20, 2021 - 5:44am

I'm not sure what you're getting at here. If someone flexes the assumptions in your model, would it still balance / run correctly? If you have linkage errors I have a hard time believing it would. Totally understand it wasn't take-home and that you were under pressure given the setting but unfortunately there are too many candidates who can build a correct model in the given time. I hope that's not an issue for you and that you get through the round but as a fair warning getting the model wrong doesn't bode well.

 
  • Associate 3 in PE - Other
Feb 20, 2021 - 12:29pm

We have only had 2-3 people ever finish our modeling test without mistakes.  We tend to use the unfinished portion to ask them to walk us through how they would finish which tends to be pretty telling.

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