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

Level

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Type

AnyTechnicalCaseFitMarket viewBrainteaser

1. 001Walk me through an LBO.LBO mechanicsCorefirst roundTPTPGInvestment Banking · New York · 2024Advent InternationalTechnology, Media and Telecom · Palo Alto · 2020Advent InternationalPrivate Equity · New York · 2021TSTruist SecuritiesGeneralist · Charlotte · 2024

   Say this

   Buy a business mostly with debt, use its cash flow to pay that debt down, improve the operations, then sell in five years. The equity return comes from deleveraging, EBITDA growth and any change in the exit multiple.

   Then walk it

   1. Entry: agree a purchase price as a multiple of EBITDA, then build sources and uses. Debt goes in as far as the credit market will support, say five times EBITDA, and the sponsor funds the rest plus fees.
   2. Operating model for five years, then the debt schedule: interest, mandatory amortisation, and a cash sweep applying surplus cash to repay debt.
   3. Each year free cash flow after interest reduces debt, so the equity slice grows even with a flat enterprise value.
   4. Exit at an assumed multiple on final-year EBITDA, subtract remaining debt, and that is exit equity.
   5. Compute IRR and money multiple, then attribute the return across the three drivers. An investment committee will always ask which one carries the deal.
   6. The discipline point: if the return only works on multiple expansion, it is not a thesis, it is a market bet. I would want it to clear on deleveraging and EBITDA alone.

   Where candidates lose it

   Describing the mechanics without attributing the return. Every serious LBO answer ends with which of the three drivers produces the IRR and an acknowledgement that multiple expansion is the one you do not control.

   Expect next

   • How does private equity create value?
   • Do a paper LBO for me.
   • What makes a good LBO candidate?

   Reported by candidates at TPG (Investment Banking, New York, 2024); Advent International (Technology, Media and Telecom, Palo Alto, 2020); Advent International (Private Equity, New York, 2021); Truist Securities (Generalist, Charlotte, 2024). Source: Wall Street Oasis.

2. 071Walk me through the sources and uses table for a buyout.LBO mechanicsIntermediatetechnicalTSTruist SecuritiesGeneralist · Charlotte · 2024

   Say this

   Uses is everything you have to pay for; sources is where the money comes from. They must equal, and sponsor equity is the plug that makes them balance.

   Then walk it

   1. Uses: the purchase price of the equity, repayment of existing debt if it is not assumed, transaction fees for advisers and lawyers, financing fees, and cash left on the balance sheet to run the business.
   2. Sources: new senior debt, any subordinated or mezzanine tranche, management rollover equity, seller notes if any, cash already on the target's balance sheet, and finally sponsor equity.
   3. Sponsor equity is calculated last as the difference. That is why raising another turn of debt directly reduces the cheque size and mechanically lifts the equity return.
   4. Two things candidates forget: financing fees, which can be two to three percent of the debt raised and are real cash out, and minimum cash to operate, which is a use not a free resource.
   5. Cash on the target's balance sheet is a source, but only the excess above what the business needs to trade. Treating all of it as available is a common error.
   6. The table is also where the structure becomes visible: the mix of senior, mezzanine and equity, and how much management is rolling, are all read off it in one glance, which is why it is the first page of any investment committee memo.

   Where candidates lose it

   Omitting fees and minimum cash. Both are real uses and both make the equity cheque bigger. And treating the entire cash balance as a source when most of it is working capital the business needs to operate.

   Expect next

   • Where does management rollover sit?
   • How much cash would you leave in the business?
   • What happens to the table if you raise another turn of debt?

   Reported by candidates at Truist Securities (Generalist, Charlotte, 2024). Source: Wall Street Oasis.

3. 095What is the difference between enterprise value and equity value, and which do you negotiate?ValuationCorefirst roundTSTruist SecuritiesCorporate Banking · Atlanta · 2025WBWilliam BlairMergers and Acquisitions · London · 2026

   Say this

   Enterprise value is the price of the operating business; equity value is what the shareholders receive after settling everyone with a prior claim. In a deal you negotiate enterprise value, then bridge to the cash the seller actually gets.

   Then walk it

   1. Enterprise value is what the business itself is worth, independent of how it is financed. That is why it is quoted as a multiple of EBITDA and why it is the number in the headline.
   2. The bridge: less debt, plus cash, less preferred, less minority interest, less debt-like items such as pension deficits and unpaid capex creditors, gives equity value.
   3. The reason deals are negotiated on enterprise value is comparability. The seller's capital structure is irrelevant to what the business is worth, and it will be refinanced anyway.
   4. Where the money actually moves is the debt-like items list. Whether deferred revenue, accrued bonuses, customer deposits or lease liabilities count as debt is negotiated line by line, and each line changes the cash the seller receives.
   5. Then the working capital adjustment on top, comparing delivered working capital to the agreed peg.
   6. So the practical answer: you agree enterprise value first because it is the clean comparable number, and then the real negotiation happens in the bridge and the completion mechanics, which is where a few percent of deal value is routinely won or lost.

   Where candidates lose it

   Giving the textbook formula without saying that the fight is over the debt-like items in the bridge. That detail is what separates someone who has been on a live deal from someone who has read a guide.

   Expect next

   • Which items get argued over as debt-like?
   • How does the working capital peg interact with this?
   • How do you treat an underfunded pension?

   Reported by candidates at Truist Securities (Corporate Banking, Atlanta, 2025); William Blair (Mergers and Acquisitions, London, 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.