The 5 question types every PE interviewer uses, what they're really testing for, and a free-resource stack that gets you ready without spending $500.
Every PE interview — from a $500m lower-middle-market fund to KKR — is built from five question categories. The weighting shifts with the firm (megafunds lean modeling, ops-focused funds lean portfolio judgment), but the categories are universal. Prep against all five.
The non-negotiable. You will be asked to do a paper LBO in your head and, in later rounds, build a full model in 60–90 minutes. What they're testing: can you do the math without a calculator, do you know which assumptions drive the answer, and can you flag when an assumption is unrealistic. They don't care if your model is pretty — they care if your IRR is right and you can defend each input.
"Pitch me a company you'd take private right now." This question separates the candidates who read pitchbook headlines from those who actually think like investors. What they're testing: do you understand what makes a good LBO target (stable cash flows, mature industry, fragmented competition, levered-able balance sheet, identifiable value-creation lever), and can you articulate a 3-year value creation plan, not just a screen filter.
A good answer names a specific company, a specific reason it's mispriced or under-managed, a specific operational or financial lever you'd pull, and a specific exit path. "I'd buy Olive Garden because restaurants have steady cash flow" is a junk answer. "I'd take Sally Beauty private at a 6x EBITDA multiple, close 15% of underperforming stores, accelerate the loyalty program, and exit to a strategic in 5 years" is a real answer.
"You just bought a manufacturing company at 7x EBITDA with 5x leverage. EBITDA misses year-1 budget by 20%. What do you do?" What they're testing: can you think like a board member, not a banker. Do you know the difference between a cost problem and a demand problem, and do you understand covenant pressure, sponsor reporting, and how to triage between cash burn, lender relations, and management changes?
Strong answers identify the diagnostic question first (is this a top-line or margin issue?), then the immediate cash-preservation moves (working capital, capex deferral, opex cuts in that order), then the longer-arc moves (management assessment, lender outreach, equity cure if available). Weak answers jump straight to "fire the CEO."
The classic consulting-style case shows up at PE firms with case-heavy diligence cultures. "How many electric vehicle charging stations will the US need by 2030?" What they're testing: structured thinking, comfort with numbers when there's no right answer, and whether you can talk through your logic out loud without freezing. Use a top-down or bottom-up framework, state your assumptions, do the arithmetic visibly, and sanity-check the answer against a known reference point.
The most under-prepped category. Every candidate has a polished "walk me through your resume." Few have a real answer to "why PE over hedge funds" or "what's a deal in our portfolio you have a view on." What they're testing: have you done your homework on the firm specifically, can you articulate why the long-hold, control-investing, operationally-engaged model fits your interests, and are you someone they'd want to spend 80 hours a week with for the next two years.
Read the firm's last three portfolio announcements before the interview. Have a view on one of their deals. Know two of their MDs and the kind of deals they lead. Generic answers ("I love the long-term thinking") get generic outcomes.
| Step | What to say | Time |
|---|---|---|
| 1 | Restate inputs: "$100m EBITDA, 10x entry, 60% debt, 10% growth, exit at 10x, 5 years" | 15 sec |
| 2 | Flag assumptions: "I'll assume ~$50m/yr FCF for paydown, no fees, exit = entry multiple" | 15 sec |
| 3 | Entry: EV = $1.0bn, debt = $600m, equity = $400m | 30 sec |
| 4 | Exit EBITDA: $100m × 1.61 = $161m. Exit EV = $1.61bn | 45 sec |
| 5 | Ending debt ≈ $400m. Exit equity = $1.21bn. MOIC = 3.0x. IRR ≈ 25% | 60 sec |
| 6 | Sanity check: "25% IRR is in the PE target range. Sensitive to exit multiple — if we exit at 8x, IRR drops to ~17%." | 30 sec |
You don't need a $500 course to pass a PE interview. You need to know the five question types, drill the LBO math until it's automatic, build a real investment thesis on a target company, and have a non-generic answer to "why PE, why us." The candidates who do all four — using free resources — beat the candidates who pay for content and don't practice.
For finance clubs
10 minutes. Timed LBO. Weekly scenario. See who on your team would actually get the job.
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