Private Equity Case Studies

If you get invited to private equity interviews, you will almost always encounter private equity case studies. Private equity case studies can be notoriously difficult, and require a great deal of preparation. While every private equity firm will have different types of case studies, this article aims to give you an overview of what you should be expecting.

What is a case study?

Case studies are a investment problems that you will be asked to analyse. Based upon your analysis you need to propose a final recommendation: should they invest in this company or sector? At what price?

Why do private equity firms use case studies?

Case studies are great because they enable the interviewer to assess several aspects of a candidate:

- The ability to absord a large quantity of information and focus on what is relevant

- The ability to structure your thoughts and analysis

- General business acumen

- Pure "problem-solving" skills (i.e. intelligence)

- Analytical skills as calculations are always involved

- Presentation and communication skills as you will be asked to present a solution

- Excel modelling / powerpoint

- Time management

At what stage of the interview process do I get case studies?

Usually after the first round of interview, but sometimes in the very first round. 

How is it given? How much time do I have to work on case studies?

Case studies can take several format, but here is what is most common:

1. Take-home case studies: the firm will send you a case via email and give you a few days to complete it and send back in a word document with your excel model

2. Mini- cases: at the firm, in person, as a live discussion. In this case, there is no excel model (or you may be asked to do a "back of the enveloppe" one on paper) and its generally a 45min to 1 hour discussion.

3. Full blown cases: At the firm. You are sitted in a room with a computer and given the case study and are given anything from 1 hour to 4 hours to complete your analysis and excel model.

 Can you give me an example of private equity case study?

The ingredients of a case study are always the same, irrespective of the format:

1. Description of a company and sector. Can be a few summary lines or slides, or, in the cae of full blown case studies, they could give you a company annual report, or an Information Memorandum ("IM")

2. Financials. It can be a few key items (i.e. revenue, EBITDA, Capex) or you can get a full annual report or IM.

Based on this information, you should be able to analyse the company, build an LBO model and answer the following questions:

- Is the company an attractive investment or not?

- How much should we pay for it?