PE Case Study Interview Guide
PE interviews are won or lost in the case study. Whether it's a 10-minute paper LBO, a 3-hour take-home model, or an ops improvement case, here's the framework that top candidates use to stand out.
What PE Firms Actually Test
PE case studies come in three formats. Understanding what each one tests changes how you prepare.
Paper LBO
10-15 min
Mental math, core mechanics, investment judgment. Tests if you can think about returns without a spreadsheet.
Take-Home Model
2-4 hours
Full 3-statement LBO model. Tests modeling speed, accuracy, and presentation quality.
Ops Improvement Case
30-60 min
Strategic analysis of a portfolio company. Tests whether you can think like an investor, not just an analyst.
What to Expect by Firm Type
Megafunds (Blackstone, KKR, Apollo) typically test all 3. Middle-market firms often focus on the paper LBO and a 1-2 hour modeling test.
The 10-Minute Paper LBO Framework
This is the step-by-step process that separates candidates who "know the concept" from candidates who can actually execute under pressure.
Sources & Uses
Purchase price, debt capacity (usually 4-6x EBITDA), equity check.
Write this down first.
Build the Debt Schedule
Entry debt, annual paydown from FCF, exit debt.
Use round numbers.
Project Cash Flows
Revenue growth → EBITDA → less CapEx → less interest → free cash flow. 5-year horizon.
Keep assumptions simple.
Calculate Exit
Apply exit multiple to Year 5 EBITDA, subtract remaining debt = equity value at exit.
State your exit multiple assumption clearly.
Compute Returns
MOIC = Exit Equity ÷ Entry Equity. Use Rule of 72 for IRR approximation.
Always present both MOIC and IRR.
Worked Example: Quick Paper LBO
Setup
$500M Enterprise Value • $100M EBITDA (5x entry multiple) • 4x leverage ($400M debt) • $100M equity check • 5% annual EBITDA growth • Exit at 5x in Year 5
Sources & Uses
Sources
Senior Debt: $400M
Sponsor Equity: $100M
Total: $500M
Uses
Enterprise Value: $500M
Total: $500M
Year 5 Exit
Year 5 EBITDA: $100M × (1.05)^5 ≈ $128M
Exit EV: $128M × 5x = $640M
Assume ~$240M debt remaining after paydown
Exit Equity: $640M − $240M = ~$400M
Returns
~4.0x
MOIC
~32%
IRR (Rule of 144)
Conservative scenario with $160M cumulative debt paydown. Actual returns depend on FCF assumptions and debt amortization schedule.
The 6 Characteristics of a "Good LBO Candidate"
In interviews, they'll often ask "What makes a good LBO candidate?", this list is the answer.
Interview Tip
Don't just list these traits, explain whyeach matters in the context of a leveraged capital structure. Interviewers want to see that you understand the "so what."
7 Mistakes in PE Case Studies
These are the errors that knock candidates out, even when they know the technicals.
The PE Playbook covers how to avoid each of these with real examples and frameworks.
The 2026 PE Recruiting Playbook
Everything you need to land a PE offer
Instant PDF delivery • Used by 1,000+ candidates at top PE firms
PE Interviews Are Won in the Case Study
Technical knowledge gets you in the room. Clean paper LBO math and a confident explanation get you through the case screen.