Should you be one of the tiny proportion of junior investment bankers who makes it through to a private equity interview, it’s easy to assume that it’ll be the same old fit and motivational questions asked. After all, private equity firms actively hunt down the best analysts in investment banking and interviews are more about ensuring you can fit into smaller investment team than questioning your technical skills.
It’s true that private equity firms focus a lot on the ‘beer test’ of ensuring you’re going to fit in with the organisation. They also spend a lot of time testing financial modelling skills during the interview process. But there are also the questions that will throw you. Here are the more difficult questions asked at Blackstone, KKR, Bain Capital and Goldman Sachs Principal Investments, based on interviewees on Glassdoor:
When you have two companies that are similar but with different valuation multiples, describe what could be the cause of that. (Blackstone)
Which bond is more valuable, the one with only one payment at maturity or the one with periodic payment along the time till maturity? (Blackstone)
If you had questions that no one had answers to, how would you handle it? (KKR)
If your investment increased 20% and you now have $60 how much did you start with? (Blackstone)
If our firm wanted to sell one of our business units, how would you go about valuing that segment? (Blackstone)
Would you rather win the lottery today and get $1m lump sum now or earn $2,000 every month for the rest of your life? (KKR)
How do we make money? (Blackstone)
When flipping a coin infinitely, is the pattern HHT or HTH more likely to appear? What is the probability that one appears before the other? (Blackstone)
What does our business do? (Goldman Sachs Principal Investments)
You operate a trucking company that ships supplies between Las Vegas and Los Angles. How would you think about growing revenues? (Bain Capital)
How would you decide on the expansion strategy for a food catering company subsidiary in France, considering the competitive environment (Bain Capital)
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