Private Equity interview preparation

Questions

100

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83

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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. 016Walk me through an SPV or holding company model.LBO mechanicsHardtechnicalNUNuveenPrivate Equity · London · 2024

   Say this

   Model the operating asset first, then layer the holding structure on top: cash flows rise from the asset through the acquisition vehicle, paying debt at each level in order, and whatever reaches the top is the sponsor's return.

   Then walk it

   1. Build the asset-level model: revenue, costs, taxes, CapEx and working capital, producing operating cash flow available for debt service.
   2. Then the asset-level or senior debt: interest, amortisation, and the debt service cover ratio. Lock-up tests at this level determine whether cash can move upward at all, which is the key structural feature.
   3. Cash that passes the tests distributes up to the holding company. There it services any holdco debt or shareholder loan, which is structurally subordinated because it sits behind the operating company's lenders.
   4. Whatever remains is distributable to the sponsor, so the equity return is computed on distributions received rather than on accounting profit.
   5. Model the tax and the group structure explicitly: where the deductions arise, whether losses can be surrendered between entities, and withholding on cross-border payments.
   6. The output is an equity IRR on the sponsor's cash flows, with the distribution lock-up tests as the thing to sensitise. In infrastructure especially, a covenant breach does not mean default, it means the cash stops flowing upward, and that alone can destroy the equity return.

   Where candidates lose it

   Modelling it as a single-entity LBO. The distinctive content is structural subordination and the distribution lock-up tests that trap cash at the operating company. Those tests are usually what breaks the equity case.

   Expect next

   • What is structural subordination?
   • What happens if the DSCR test is breached?
   • Why do infrastructure deals use this structure?

   Reported by candidates at Nuveen (Private Equity, London, 2024). 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.