Equity Research interview preparation

Questions

100

Traced to a firm

72

Firms

45

Updated

September 2026

Asked at

All firmsMorningstar12Man Group6Balyasny Asset Management5BLBlackRock5FTFranklin Templeton5MSCI5Jefferies4CSCredit Suisse3Fidelity Investments3Moody's3Perella Weinberg Partners3Point723S&P Global3The Vanguard Group3WMWellington Management3Advent International2Apollo Global Management2Bank of America2Carlyle Group2DED.E. Shaw2Houlihan Lokey2HSBC2Piper Sandler2Sequoia Capital2SSState Street2Viking Global Investors2WBWilliam Blair2ACAQR Capital Management1BGBaupost Group1BMBNY Mellon1Centerview Partners1Coatue Management1Goldman Sachs1GSGuggenheim Securities1HWHarris Williams1Insight Partners1Invesco1Mizuho1Moelis & Company1MSMorgan Stanley1PIMCO1SCSchroders1Scotiabank1T. Rowe Price1TSTruist Securities1

Topic

All topicsResearch process9Stock pitch6Company analysis8Investment philosophy5Valuation14Modelling2Portfolio and risk8Macro8Sector knowledge2Accounting8Career and fit12Industry knowledge6Quantitative research1Sector: technology3Sector: consumer1Sector: healthcare1Sector: energy1Sector: financials2Sector: industrials1Case and estimation2

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseFitBrainteaserMarket view

1. 009Why did you take a variant view on the multiple you applied to that company, relative to street expectations?ValuationHardsuperdayFTFranklin TempletonOil and Gas · San Mateo · 2024

   Say this

   Because the multiple should reflect the durability and the capital intensity of the earnings, and I think the market is applying a mid-cycle multiple to earnings that are not mid-cycle. Say what the street assumes, then why that assumption is wrong.

   Then walk it

   1. First, state the street's implied assumption in numbers. 'Consensus applies 6 times to a refiner on peak crack spreads, which implies they believe those spreads persist.'
   2. Then your disagreement and its basis. 'I apply 4.5 times because I think those spreads normalise within 18 months as capacity comes back, so I am valuing normalised rather than trailing earnings.'
   3. For a cyclical this is the whole game: the multiple and the earnings must be consistent. A low multiple on peak earnings is a value trap; a high multiple on trough earnings is often the correct entry.
   4. Support it with something observable: capacity additions, inventory levels, forward curve, historical spread ranges. The evidence has to be external to your own model.
   5. Then the discipline point: I would show the valuation across the cycle rather than a point estimate, and say what spread assumption is embedded in today's price. Reverse-engineering the market's assumption is the most persuasive thing in a research note.

   Where candidates lose it

   Justifying a multiple by peer comparison alone. That is circular. The multiple has to be defended by the economics, and for cyclicals specifically by where in the cycle the earnings sit.

   Expect next

   • What earnings are you applying that multiple to?
   • How do you normalise a cyclical?
   • What is priced in today?

   Reported by candidates at Franklin Templeton (Oil and Gas, San Mateo, 2024). Source: Wall Street Oasis.

2. 027How would you evaluate an LP stake in a fund, and how much would you pay for it?ValuationHardsuperdayBGBaupost GroupEquity Hedge · Boston · 2018

   Say this

   Start from reported NAV, then adjust it. You are buying the underlying assets plus the unfunded commitment and minus the fees, so the price is NAV adjusted for your own view of the marks, liquidity and remaining fee drag.

   Then walk it

   1. Reported NAV is the starting point, not the answer. Look through to the underlying positions and form your own view on the marks, especially anything illiquid or level three.
   2. Adjust for the fee drag on the remaining life: management fees on committed capital plus carry on future gains. That can be several percent of value in a fund with years left.
   3. For a closed-end structure, factor the unfunded commitment. You are buying an obligation to put in more money, and that has a cost and a risk.
   4. Then discount for illiquidity and for information asymmetry. The seller knows more than you, and there is a reason they are selling. Secondaries typically transact at a discount to NAV for exactly this reason, though quality assets can clear at or above.
   5. Then the vintage and the J-curve position. A fund three years in with assets marked at cost is a very different proposition from one seven years in with a clear path to exit.
   6. So my answer would be a percentage of NAV with the adjustments itemised, and I would say which adjustment I am least confident about.

   Where candidates lose it

   Answering 'NAV'. If it were NAV there would be no question. The expected content is the fee drag, the unfunded commitment, the illiquidity discount and adverse selection. Name the seller's information advantage explicitly.

   Expect next

   • Why is the seller selling?
   • How would you diligence the marks?
   • What discount to NAV would you want?

   Reported by candidates at Baupost Group (Equity Hedge, Boston, 2018). Source: Wall Street Oasis.

3. 064How would you compare two companies in the same sector trading at very different multiples?ValuationIntermediatetechnicalCSCredit SuisseGeneralist · Sydney · 2020

   Say this

   Assume the market is right until proven otherwise, then find the justification. Multiple gaps almost always reflect differences in growth, returns on capital, or risk. The investment question is whether the gap is larger than those differences warrant.

   Then walk it

   1. First decompose the gap. Is it growth, margin, returns on capital, capital intensity, cyclicality, balance sheet, or governance? Usually two or three of these explain most of it.
   2. Check the denominators are comparable. Different accounting policies, different fiscal years, different definitions of adjusted earnings, and different treatment of leases or capitalised costs all create fake gaps.
   3. Then quantify. If one grows 5 points faster with 10 points higher return on capital, how much premium does that justify? A regression of sector multiples against growth and ROIC gives a defensible expected multiple for each.
   4. The residual, the difference between the actual multiple and the regression-implied one, is the potential mispricing. That is where the idea lives.
   5. Then look for the non-fundamental explanations: index membership, liquidity, free float, ownership structure, or a governance discount for a controlled company. These are real and persistent.
   6. The conclusion should be specific: the cheaper one is cheap for reasons X and Y, which I think are permanent, or which I think the market is over-extrapolating. Either is a view.

   Where candidates lose it

   Assuming the cheaper one is the better investment. The default position should be that the market has a reason, and your job is to find it and then decide whether it is overstated.

   Expect next

   • What non-fundamental reasons could explain it?
   • Would you pair-trade them?
   • What would close the gap?

   Reported by candidates at Credit Suisse (Generalist, Sydney, 2020). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.