Portfolio Management interview preparation

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100

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September 2026

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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. 019What would you include in a multi-asset fund right now, choosing from every asset class including fund of funds?Asset allocationHardsuperdayNeuberger BermanPrivate Equity · London · 2022

   Say this

   I would build it in three layers: a cheap beta core, a set of diversifying return streams, and an illiquidity sleeve sized to the liquidity budget rather than to the expected return. And I would be sceptical of fund of funds, because the second fee layer has to be earned.

   Then walk it

   1. Layer one, core beta, roughly two thirds: global developed and emerging equity, government duration, investment grade credit, all passive or near-passive. This is where the return comes from and it should cost almost nothing.
   2. Layer two, diversifiers: trend following or managed futures, which has genuine crisis convexity, some carry and relative value, and inflation-sensitive real assets. The test for anything in this layer is correlation to the core in stressed periods, not standalone Sharpe.
   3. Layer three, illiquids: private credit, secondaries, infrastructure, property. Sized by the liquidity budget. The question I would answer first is how much of the fund can be locked up given redemption terms, and only then which managers.
   4. On fund of funds: it buys access, diversification and diligence, and it costs an extra layer, often 60 to 100 basis points plus a share of carry. That can be worth it for a small investor entering private markets for the first time, or for hedge fund selection where diligence is genuinely hard. It is bad value for anyone with the governance to select directly, and secondaries or co-investment usually do the same job cheaper.
   5. Then check the whole thing for hidden duplication. Private credit, high yield and equity beta are all long the same cycle. The portfolio can look like eight sleeves and behave like two.
   6. And name the liquidity mismatch explicitly. A daily dealing multi-asset fund with 20 percent illiquids has a structural problem in a redemption wave, which is what gated UK property funds in 2016 and 2020.

   Where candidates lose it

   Producing a shopping list of asset classes with no organising logic and no view on the fee stack. The question names fund of funds on purpose, so have a real position on whether the second layer of fees earns its keep. And mention liquidity mismatch, because a multi-asset fund that cannot meet redemptions is the failure mode this seat actually worries about.

   Expect next

   • How would you size the illiquid sleeve?
   • When is a fund of funds actually the right answer?
   • How would you assess one of those underlying funds?

   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.