Private equity interview questions

Round one: fit and motivation

The first round filters on coherence, not cleverness. Interviewers want a story that explains why banking or consulting led here, and why this fund specifically.

• Walk me through your resume.
• Why private equity rather than staying in banking?
• Why this fund, and which of our deals do you find most interesting?
• Tell me about a deal you worked on and what you would have done differently as the sponsor.
• What kind of businesses do you think make good LBO candidates, and why?

Round two: technical questions

Technicals are checked for speed and precision. Answers should be short, correct, and delivered without hedging.

• Walk me through an LBO.
• What drives returns in a leveraged buyout, and which driver is most reliable?
• How do you value a business, and which method would you trust most here?
• What is the difference between enterprise value and equity value?
• Why does a company with stable cash flows support more leverage?
• How does a dividend recapitalisation change sponsor returns?
• What is quality of earnings, and what would make you walk away from a diligence finding?

Round three: the modelling test

Most funds run either a paper LBO under time or a longer Excel test. Both reward structure over decoration.

The scoring is usually mechanical: correct sources and uses, a working debt schedule, a defensible exit, and returns that tie. Formatting matters far less than candidates expect.

Round four: the case study and investment committee

The final round typically hands you a confidential information memorandum or a teaser and asks for a recommendation. The interviewer is testing judgement under incomplete information.

A strong answer names a thesis in one sentence, supports it with two or three specific diligence findings, states the price you would pay and why, and is explicit about what would make you walk away.

How to practice rather than revise

Reading question lists produces recognition, not recall. The technical rounds are performance under time, which is a different skill from knowing the answer.

The free tools on this site turn the technical questions into repeatable drills: the Paper LBO Challenge for the modelling test, the Deal Screening Challenge for the case study loop, and the LBO Returns Sandbox for return sensitivity.