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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Type

AnyTechnicalCaseFitMarket viewBrainteaser

1. 021What is a quality of earnings analysis and what are you looking for?Due diligenceHardtechnicalHWHarris WilliamsInvestment Banking · Richmond · 2025

   Say this

   It bridges reported EBITDA to a sustainable, normalised EBITDA that a buyer can actually underwrite. You are looking for anything in the reported number that will not be there next year.

   Then walk it

   1. Add-backs the seller proposes: one-time legal costs, owner's excess compensation, discontinued product lines, pro forma savings from actions already taken. Some are legitimate; many are not.
   2. The ones to challenge hardest: pro forma synergies from actions not yet taken, run-rate adjustments annualising a single good month, and recurring restructuring dressed as one-off.
   3. Revenue quality: customer concentration, contract terms and renewal rates, cut-off testing around the period end, and whether any revenue was pulled forward to flatter the sale process.
   4. Cost completeness: costs the business has not been bearing, such as an owner working unpaid, rent below market on a related-party property, or under-investment in maintenance and IT that a buyer will have to fund.
   5. Working capital: establish a normalised level, because the purchase agreement will have a working capital peg. Sellers manage working capital down before a sale, and if you set the peg from the manipulated level you overpay at completion.
   6. The output is an adjusted EBITDA and a defensible working capital target, and those two numbers are what the price is actually built on.

   Where candidates lose it

   Treating it as an audit. It is not; it is a normalisation exercise. And missing the working capital peg, which is where real money changes hands at completion and which most candidates never mention.

   Expect next

   • What is a working capital peg?
   • Which add-backs would you refuse?
   • How would you verify the pipeline to forecast revenue?

   Reported by candidates at Harris Williams (Investment Banking, Richmond, 2025). Source: Wall Street Oasis.

2. 045How do you separate maintenance capital expenditure from growth capital expenditure?Due diligenceHardtechnicalPrivate credit

   Say this

   There is no disclosed split, so you triangulate. Compare CapEx to depreciation over a cycle, ask management for a project-level breakdown, and test whether revenue would decline if spending stopped.

   Then walk it

   1. The rule of thumb: maintenance CapEx approximates depreciation over a long enough period, because depreciation measures the consumption of the existing asset base. Anything above that, sustained, is growth.
   2. That rule breaks in inflation, since depreciation is on historic cost while replacement is at today's prices. So it understates maintenance in a high-inflation environment.
   3. Better: get the project-level CapEx budget and classify each line. Management knows the split even though they do not disclose it, and in diligence you can ask.
   4. The conceptual test: what is the minimum spend that keeps revenue and capacity flat? Anything beyond that is discretionary.
   5. For a retailer or restaurant chain there is a clean version: new store CapEx is growth, refurbishment of existing sites is maintenance, and both are disclosed at unit level.
   6. Why it matters for a sponsor: the split determines how much cash is genuinely available to service debt in a downside case, because growth CapEx can be switched off and maintenance cannot. That flexibility is worth a turn of leverage.

   Where candidates lose it

   Accepting management's split without testing it. Management has an incentive to classify spend as growth, because that makes the business look more cash-generative. The depreciation cross-check and the project-level review are the defences.

   Expect next

   • What does the split do to your leverage capacity?
   • Why does the depreciation rule break in inflation?
   • How would you test it for a manufacturer?
3. 046How would you diligence a founder-run business?Due diligenceHardsuperdayAudax GroupPrivate Equity · Boston · 2021HIH.I.G. CapitalPrivate Equity · Paris · 2024

   Say this

   Assume the reporting is weaker than it looks and the founder is more central than anyone admits. The two questions are what the real earnings are, and what happens to the business when the founder steps back.

   Then walk it

   1. Financial reporting is usually thin. There may be no audited accounts, no management accounts by segment, no unit-level profitability. Budget more time and money for quality of earnings than you would for a corporate carve-out.
   2. Personal expenses run through the business are standard: cars, travel, family on the payroll, property. These are legitimate add-backs but each needs verification, and they are also a signal about controls.
   3. Founder dependency is the core risk. Which customer relationships are personal? Who actually makes pricing decisions? Is there a second layer of management, or does everything route through one person?
   4. Test it concretely: ask what happened when the founder took a long holiday. Ask the customers who they call. The answers are usually revealing.
   5. Related-party arrangements: property leased from a founder-owned entity, supply from a family business, loans in both directions. All need to be put on arm's-length terms before closing.
   6. Then structure around what you find. Rollover equity and an earnout keep the founder engaged; a transition agreement with defined handover milestones; and building the second layer of management is usually the first hundred days priority.

   Where candidates lose it

   Treating it like a corporate diligence. The distinctive risks are informal reporting, personal expenses and founder dependency, and the answer should end with how you structure around them rather than just listing them.

   Expect next

   • How would you structure the founder's rollover?
   • What if the founder wants to leave immediately?
   • How do you value a business where the owner works unpaid?

   Reported by candidates at Audax Group (Private Equity, Boston, 2021); H.I.G. Capital (Private Equity, Paris, 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.