Portfolio Management interview preparation

Questions

100

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40

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24

Updated

September 2026

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Topic

All topicsPortfolio theory5Factor models8Asset allocation11Rebalancing3Portfolio construction7Benchmarks and tracking error5Performance measurement8Risk management6Fixed income and LDI5Currency and global3Implementation and costs5Active versus passive6India markets7Brainteasers5Career and fit16

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1. 045How would you assess a fund's performance?Performance measurementIntermediatetechnicalNeuberger BermanPrivate Equity · London · 2022

   Say this

   Against the right benchmark, net of everything, decomposed into exposures, and over a period long enough to mean something. Then check that the returns came from the process the manager claims, because that is the only part that tells you anything about the future.

   Then walk it

   1. First the mechanics: net of all fees and costs, time-weighted for a fund and money-weighted only if I am measuring my own experience of it, and against a benchmark matched to the opportunity set rather than a convenient one.
   2. Then decompose. Split excess return into market beta, factor exposures and residual. If a 4 percent excess return is 3 points of small cap and value tilt, I am buying cheap beta at active prices.
   3. Then look at risk-adjusted, not absolute: information ratio against the benchmark, maximum drawdown, and the worst rolling twelve months. And look at the shape of the return series, because a fund that made everything in two quarters is a different proposition from one that grinds.
   4. Then consistency with the stated process. Hit rate, average winner versus average loser, turnover, and whether attribution matches the story. A manager who claims bottom-up picking while the returns come from sector allocation has a process-outcome mismatch, which is the most useful red flag there is.
   5. Then the statistics honesty: five years of monthly returns cannot distinguish skill from luck at any sensible confidence level, so I would weight process, team stability and capacity at least as heavily as the numbers.
   6. For private funds the measures change: IRR is money-weighted and flattered by subscription lines and early exits, so I would look at TVPI and DPI, compare against a public market equivalent, and check the vintage-year cohort rather than the absolute number. Unrealised marks in a young fund are the manager's own opinion.

   Where candidates lose it

   Going straight to returns and Sharpe ratios. The two things that earn this question are decomposing the excess return into replicable factor exposures, and admitting the sample is too short to prove skill. Since the seat here touches private markets, say why IRR is flattered and that DPI and public market equivalent are the honest comparisons.

   Expect next

   • How is assessing a private fund different?
   • How long a record would you want?
   • What would make you redeem?

   Reported by candidates at Neuberger Berman (Private Equity, London, 2022). 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.