Private Equity interview preparation

Questions

100

Traced to a firm

83

Firms

40

Updated

September 2026

Asked at

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

Topic

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

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1. 006Explain the fund structure: management fee, carry, hurdle and catch-up.Fund economicsHardtechnicalKohlberg Kravis RobertsInvestor Relations · New York · 2025

   Say this

   Classic terms are two and twenty over an eight percent hurdle. The manager takes 2 percent a year on committed capital, and 20 percent of profits, but only after investors have received their capital back plus an 8 percent preferred return.

   Then walk it

   1. Management fee: around 2 percent on committed capital during the investment period, often stepping down to invested capital afterwards. It funds the firm's operations, not the partners' upside.
   2. Preferred return or hurdle: usually 8 percent. Limited partners receive their capital back plus this return before the manager earns any carry.
   3. Catch-up: once the hurdle is met, the manager typically receives 100 percent of subsequent distributions until it has caught up to 20 percent of total profits. Then the split reverts to 80/20.
   4. Carried interest: the manager's 20 percent share of profits. This is where partners actually make money and why alignment is claimed.
   5. Clawback: if early distributions gave the manager carry that later losses erase, it must be returned. This is what makes the whole structure defensible over a fund's life.
   6. The distinction that matters: European waterfall distributes on a whole-fund basis, so carry is only paid once the entire fund clears the hurdle. American waterfall is deal-by-deal, so carry can be paid earlier. Limited partners strongly prefer the European version, and knowing which a firm uses is a real signal of preparation.

   Where candidates lose it

   Reciting 'two and twenty' without the hurdle, catch-up and clawback. Those three are what make the structure work, and the European versus American waterfall distinction is what separates a prepared candidate from a general one.

   Expect next

   • What is the difference between a European and American waterfall?
   • What is a clawback?
   • How would you highlight the fund to an endowment versus a fund of funds?

   Reported by candidates at Kohlberg Kravis Roberts (Investor Relations, New York, 2025). Source: Wall Street Oasis.

2. 033How would you pitch the fund to an endowment versus a fund of funds?Fund economicsHardsuperdayKohlberg Kravis RobertsInvestor Relations · New York · 2025

   Say this

   Both want returns, but they are solving different problems. An endowment is building a long-horizon portfolio and cares about strategy fit and access. A fund of funds is selecting managers for its own clients and cares about differentiation it can explain.

   Then walk it

   1. Endowment: long horizon, permanent capital, sophisticated in-house team. They care about how you fit their existing exposures, whether you give them co-investment rights, and whether the relationship compounds over multiple funds. They will diligence the team deeply and negotiate on access, not just fees.
   2. Fund of funds: intermediary with its own investors to satisfy. They need a clear, communicable differentiation because they have to re-sell you internally and to their clients. Track record consistency and attribution matter more, because they are defending a selection decision.
   3. Also different: an endowment may take a larger ticket and want an advisory board seat; a fund of funds may take a smaller one but bring repeat allocations across vintages.
   4. Common ground: both want return attribution that shows skill rather than leverage and multiple expansion, a stable team with aligned economics, and evidence of loss discipline.
   5. The practical difference in the pitch: for the endowment I would lead with the strategy's role in their portfolio and the partnership over time. For the fund of funds I would lead with what makes this strategy distinctive against the peer set they are comparing us to.
   6. And both will ask the same hard question: why will the next fund perform like the last one, given you are now bigger?

   Where candidates lose it

   Giving one generic pitch. The question is explicitly about tailoring, and the underlying test is whether you understand that different limited partners have different decision processes and different internal accountability.

   Expect next

   • What would each one push back on?
   • How do you answer the fund-size question?
   • What is a co-investment right worth to them?

   Reported by candidates at Kohlberg Kravis Roberts (Investor Relations, New York, 2025). 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.