Private Equity Fund of Funds: Case Study

fireandsteel's picture
Rank: Chimp | 5

Hi, I am about to do a case study interview for a PE FoF's for a junior analyst position. I've been told that I do not need to prepare anything and will be given an hour to read the materials and prepare before presenting my views followed by a 30 mins Q&A session. I have one year's IB experience and several internships...I was just wondering if anyone could kindly give me a few pointers?

I - presumably - will have to undertake an investment appraisal and talk them through my thought process...if anyone has any experience with this - particularly for a FOF - I would be very interested and appreciative in hearing it.

Many thanks

Comments (28)

Nov 14, 2011

Hi All,

I actually am in the exact same boat and was hoping to get some feedback on what to expect?

Dec 15, 2012

Any update on what was asked and how the case studies were structured?

Dec 16, 2012

interested as well.

Mar 4, 2014

fireandsteel, I'm interested in hearing about the structure of the interview/case study. Thanks!

Jan 7, 2015


Jan 7, 2015


Oct 4, 2016


Nov 8, 2016

in same boat, bump. I have the case interview tomorrow Wednesday after the election...if anyone has any insight I would appreciate it.

Nov 16, 2016

Similarly interested in a FoF insight, bump.

Mar 6, 2017

Fireandsteel: Would love to hear your experience, if you don't mind sharing either on here or via PM.

I'm assuming that they had you do a valuation (dcf, comps, transactions) and arrive to the NAV for a specific fund? I imagine it'll cover that and perhaps the manager selection process based on some metrics they provide you, so that you recommend a buy or not buy?

If any one has experienced this process, I'm sure the WSO community would appreciate it.


Mar 6, 2017

Hamilton Lane are well regarded - their investment tend to be quite 'vanilla' with a focus on large buyout, rather than more interesting, smaller niche opps - think they have a reasonable (but not exceptional) co-invest track record.

Case study will probably be reasonably qualitative, with questions on why you would choose a manager, what to look for, what the red flags are etc

Mar 6, 2017

Thank you. How would you answer these questions?

Mar 6, 2017

Has anyone done a case study during a Fund of Fund interview? Im assuming its going to be some sort of excel test, processing info on a fund, and making an investment recommendation.

Thoughts on Hamilton Lane in general?


Excel test asking questions such as how to back into enterprise value and how to value a bond/stock and testing and other questions that test your Excel capabilities. Also, there is a qualitative section where you have to evaluate an investment opportunity and list the merits and disadvantages of it.

'We're bigger than U.S. Steel"

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Mar 6, 2017

Is this Hamilton Lane ? If so, PM me.

Mar 6, 2017

thx, buddy...but its not Hamilton Lane.

Would still appreciate some input as to what a case study might involve.


Best Response
Mar 6, 2017

Not necessarily sure what the case could be about specifically, but here are some topics to think about.

Value of FoF - how it adds value to both GPs and as well as its LPs

How demand for FoF funds changed over past recent years given the economic downturn

In terms of DD and investment process, maybe you will be asked to evaluate two different opportunities? In which case you would:

  1. Assess the investment opportunity relative to the market opportunity (know how fund expectations change in regards to vintage year, amount currently funded, primary vs. secondary deal, various partnership structures, co-invest or traditional manager play)
  2. Evaluate return dynamics and track record of fund manager. Emphasis on IRR and cash-on-cash multiples. Know terms like TVPI, MOIC, unrealized vs. realized value.
  3. Qualitative aspects regarding manager (i.e. reputation, adherence to strategy, keyman risks)
  4. Fund structure of GP (i.e. management fees, clawback provisions, etc)
  5. Drill-down into portfolio companies

At worst, I hope this just gives you some food for thought.

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Mar 6, 2017

I'd agree with the above except for emphasising IRR, its a redundant metric, MOIC (and preferebly net MOIC) is all that matters.

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Mar 23, 2017

Why do you say IRR is a redundant metric? In my experience IRR is all a lot of MD's care about, since that's what carry is based off of.

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Mar 6, 2017

how did it go? what did they ask?

Mar 6, 2017

Its yet to come.. havent had it yet

Mar 6, 2017

It's been a while... but any idea on what to expect for a PE FOF case study?

Mar 23, 2017

I'm answering this in case the topic comes up again as I'm aware this is now dated.

6+Bn AUM FoF both direct, and fund co-investments (green/brown)field.

The test I was give, Still an LBO based on EBITDA turns, regular 8X EBITDA, management roll-over and some mezz debt with the remainder injected by sponsor. Some technical knowledge I wasn't familiar with (80% taxable D&A). wasn't entirely sure how this hit NI.

As for non personal experience though word of mouth based on FoF. Understand how to model out GP/LP relationships based on purchased units in the fund and exit values. Effects on 20/2 on AUM and returns and how to set benchmark hurdles (also if there's a claw back) though that would be a little technical for an interview since it takes time to accrue a loss and carry forward.
WSP i believe had a video on master funds and how they are modeled. though you should be able to find something online.

TLTR; Still a general lbo model given a FoF, though understand how to model GP/LP returns. How hurdles can impact the fund and how to include the 2/20 on the fund.

PM if you have any questions or just respond on the thread.

Mar 23, 2017

Any good resources for learning about different PE structures and modeling fund-level returns, carry, etc? I've done a fair share of this type of modeling in my work, but I've always had to dig into our fund docs and just figure it out on my own. It's not really a core function of what I do since I spend more time doing diligence on potential investments and portco's, but would be a good skill to develop further if I ever move into the FoF / secondaries space. Thanks

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Mar 27, 2017
Mar 31, 2017