I have an interview coming up this week for an associate role at a megafund in NYC. I have been doing prep by using what I can find freely online, but would prefer more (i.e. different) practice models and questions. Are there any models people can share or other sites they have found helpful? I've have looked around the forum and couldn't find a solid collection of practice resources other than those sold by WSO.
From my side, these are the free resources I have found helpful:
http://www.streetofwalls.com/finance-training-cou…
http://www.streetofwalls.com/finance-training-cou…
http://www.askivy.net/articles/private-equity/int…
http://www.interviewprivateequity.com/paper-lbo-m…
https://www.scribd.com/doc/174751582/Vault-Guide-…
Additionally, I was hoping people could specifics of their interview experience with Megafunds
1) Things to know cold
2) Study if you have time
3) Something that caught them off guard
4) Any other advice
Thanks in advance
bump
Macabacus is a good free resource for modeling tutorials. Also check out the WSO guides - they are very good for the price. A career in PE is worth a small investment in prepping IMO
In my personal experience interviewing across a variety of fund sizes, I would say the interview is generally always the same. You get the same technical questions at a $10bn AUM shop you would at a $1bn AUM shop. Some folks will be more technical than others. Juniors tend to be more technical while senior folks tend to be more high level. Even modeling tests were very similar across the spectrum. I don't think a mega fund modeling test is any harder or easier than a small fund modeling test. Again, this is based on my personal interview experience. The only material difference I would say is timing. MFs tend to close a process out faster, while the smaller funds can slow play a process for weeks or even months sometimes.
There was a WSO thread recently with a guy adding folks to a Google drive with tons of models and case studies. You need to find that thread and the guy. All the practice models you want will be there.
Mhhh could somebody share this link if found? I am still searching for that thread but do no find it.
yeah I was unable to find this as well
I can't find the thread either but I saved down a lot of those files. This one was probably the most helpful to me back in the day:
https://drive.google.com/file/d/0B2bOaxXZWW1rSGNyR08wWlMxdFE/view?usp=s…
thanks
ok thanks I Invest, I will try to track that down
I also just bit the bullet on the WSO prep pack, hopefully that has more difficult and obscure technical questions
Completely depends on the fund. The more technical/difficult interviews I've had have always been distressed related. Traditional buyout interviews are VERY cookie cutter.
Hey HugLife could you provide an example of a couple distressed questions that you found particularly difficult?
A friend of mine mentioned the following question: If you have a company that trades at 5x EBITDA with 100m of revenue and 20% EBITDA margins and $50m of debt, how would the bonds trade if revenue fell in half? So EBITDA falls from 20m to 10m. TEV falls from 100m to 50m. He said the bonds should still trade around par but the equity has been wiped out. Also he said they may trade at below par if the decline in revenue is expected to continue. This makes sense to me in retrospect, but I think if I were thrown this question I likely would have fumbled it under pressure.
The simple trick with this question (I know you get it, but this is for the benefit of other readers) is that the EBITDA multiple gives you fair enterprise (or asset) value. If the assets are worth 5 * 20 = $100mm and company has $50mm in debt, then there is $50mm in equity value left in the asset base (ignoring cash). If EBITDA is now $10mm, then 5 * 10 = $50mm in fair asset value, meaning there is exactly enough value in the company to pay down the debt, in theory. So theoretically if the bondholders were 100% confident in this valuation, they should trade at par.
In the real world, bond prices reflect the market's expectation of payback. Said otherwise, the market price of a bond will be such that the resulting yield accurately reflects the expected risk/reward profile of the investor.
In practice, the typical way of calculating enterprise value is by using market value of equity and par value of bonds. This is fine as long as bonds are trading near par, but otherwise it can be misleading. It is not unusual to see the bonds trading at 70%-80% of par with $100's of millions in positive market cap. If you think about bond prices reflecting expected payout this should not be possible (if there is not enough value to pay bondholders, there can be no equity value), but in reality these prices reflect different classes of investors' risk appetites and divergent expectations of the business. Bondholders may be more conservative than equityholders in estimating future cash flows, and the market cap typically includes an "option value premium". E.g. even if the bonds are trading at 30% of par (signalling bankruptcy or restructuring is around the corner), I've seen cases where there is still $50mm - $100mm of market cap left. In this scenario, the stock has essentially turned into a call option on the company's recovery (this is common in small commodity stocks where underlying revenues are very volatile).
This is one example but probably more straight forward. I got this in banking interviews. They are more case study based in terms of understanding creation multiples, cash flow drivers, would you take debt vs buying out the equity. Etc.
Thanks NuckFuts that is a very thorough response
Interviewing at mega funds as a consultant (Originally Posted: 09/03/2017)
Hi guys,
Any experiences people can share about interviewing at mega funds as an MBB consultant? Yeah I know there are probably a few threads on this, just looking for something fresh.
following
Tier 2 consultant preparing for PE interview with Megafund (Originally Posted: 08/10/2016)
Hello,
I am a consultant with a tier 2 consulting firm, perhaps even lower tier 2. Two days ago I scored a first round interview with the recruiting firm for an associate for role with a €29B megafund. I know this sounds weird, if not outright BS, but its true: They hire consultants, and an associate I know at the firm explained they are specifically looking for more consultants right now. So I called the recruiter and asked if they would consider people not from MBB to which he said they would, but that they would have to be at the absolute top of their firms. So I told him that during my last review the partner joked that if I kept developing at my current pace I would make partner in the next three weeks, which he did. The recruiter really liked hearing that. After that I sent him my CV and we set up an interview.
The first round will only be focused on fit and previous experience and I would like to ask for any advice on preparation from people who successfully transfered from consulting to PE.
Bump - really, really thankful any help on this one.
Bump again, would be extremely thankful for any help!
Come on guys. Youre breaking my heart.
Be yourself. Be open to new ideas. Work hard. And most importantly, believe. Believe. You. Can. Do. It.
Bump. Good luck on that interview.
Wtf is your question. Answer is do your best? I have my fingers crossed for you? Don't fuck up?
well there is a reason that partner likes you so much. think on it and amp to the nth fucking level for the interview. not sure what else I can say ... maybe try to refrain yourself from pulling your dick out at the interview?? yes, that's general good advice i think. good luck.
Thanks for the nice intentions, though I was hoping to hear some specific insights on what might help set me apart.
"The first round will only be focused on fit and previous experience "
No idea what your personality is. No idea what your case experience is. How does one offer insights?
Honestly this should be pretty easy. Know all the fit questions super well and make sure you can speak to your resume very well.
What is your story? Why PE and why now?
What do you like about the firm? What excites you about them? Know the firm and its recent deals. Have an opinion on all of them
Network with people who are already associates and figure out what the fit/culture is like. Why are they looking for more consultants now? Figure out what they're looking for and tailor your answers so that you fit the mold.
Have some deals that you've been following and be sure to have all the details ready should you need to speak about them
Think about the skills you've developed in consulting and how they will apply well to PE. For the hard skills that you don't have, think about how you'd address those(e.g. Are you good at financial modeling? No, but I've been learning on my own and have built 3 practice LBOs)
Lastly, just find a PE guide somewhere and go through it.
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