Private Equity interview preparation

Questions

100

Traced to a firm

83

Firms

40

Updated

September 2026

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All firmsAdvent International6Apollo Global Management6Audax Group6Carlyle Group6EQT6Silver Lake6Vista Equity Partners6WPWarburg Pincus6HIH.I.G. Capital5Oaktree Capital Management5Platinum Equity5TPTPG5General Atlantic4AMAres Management3Blackstone3Clayton Dubilier and Rice3GSGuggenheim Securities3Insight Partners3Invesco3Lazard3Neuberger Berman3NUNuveen3TSTruist Securities3Bain Capital2HWHarris Williams2Kohlberg Kravis Roberts2Millennium Management2Moody's2Rothschild & Co2WBWilliam Blair2Bessemer Venture Partners1Citi1Evercore1FTFranklin Templeton1Houlihan Lokey1HPS Investment Partners1KKR1Mizuho1MSMorgan Stanley1Sycamore Partners1

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All topicsLBO mechanics7Value creation5Returns2Fund economics9Investment judgement18Valuation6Firm knowledge2Credit and financing9Operations4Due diligence8Career and fit11Sector knowledge4Accounting2Deal structuring7Industry knowledge3Brainteasers3

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1. 003What is better: a one dollar increase in EBITDA or a one dollar decrease in debt?Value creationIntermediatetechnicalAMAres ManagementPrivate Equity · New York · 2026

   Say this

   A dollar of EBITDA, by the exit multiple. If you exit at 10 times, one extra dollar of EBITDA is ten dollars of enterprise value, while a dollar of debt repaid is one dollar of equity. Ten to one.

   Then walk it

   1. Debt paydown is a one-for-one transfer: a dollar less debt is a dollar more equity at exit.
   2. EBITDA is capitalised at the exit multiple. At 10 times, a permanent extra dollar of EBITDA adds ten dollars of enterprise value and therefore ten dollars of equity.
   3. So the ratio is simply the exit multiple, which is a clean way to say it and shows you understand the mechanism rather than the answer.
   4. The conditions that matter: the EBITDA has to be recurring, not a one-off, and the multiple has to hold. A dollar of EBITDA from a one-time contract is worth roughly a dollar, not ten.
   5. There is also a second-order benefit: higher EBITDA reduces the leverage ratio at the same debt level, which improves covenant headroom and refinancing options.
   6. The nuance worth adding: early in a hold, when leverage is high and covenants are tight, a dollar of debt repayment can be worth more than its face value because it buys flexibility and avoids a default. So the answer is EBITDA in general, debt paydown when survival is the issue.

   Where candidates lose it

   Answering without naming the exit multiple as the exchange rate. That one insight is the whole question. Also missing that the EBITDA must be recurring for the multiple to apply.

   Expect next

   • What if the EBITDA is a one-off?
   • When would you prefer the debt repayment?
   • How does that change how you prioritise the value creation plan?

   Reported by candidates at Ares Management (Private Equity, New York, 2026). 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.