How to Prepare for PE Interviews in 4 Weeks
A comprehensive 4-week study plan for private equity interviews. Week-by-week breakdown covering accounting, LBO mechanics, commercial judgment, and behavioral prep.
Private equity interviews are among the most demanding in finance. You'll face deep technical questions on LBO mechanics, accounting, valuation, plus commercial judgment on deals and industries — all while competing against candidates from top investment banks and business schools.
This guide provides a structured 4-week study plan that covers everything you need: Week 1 builds your accounting foundation, Week 2 covers LBO mechanics, Week 3 develops your commercial judgment, and Week 4 polishes your behavioral prep and mock interviews.
The Key to PE Prep Success
Consistency beats intensity. 30-60 minutes daily will get you further than cramming 8 hours the weekend before. Spread your practice across technicals, deal discussions, and behavioral stories.
Week 1: Accounting & Valuation Foundation
PE interviews assume strong accounting fundamentals. Week 1 builds the foundation that everything else rests on. If you can't do flow-through questions automatically, you're not ready for PE technicals.
Week 1 Daily Schedule
| Term | Definition | Note |
|---|---|---|
| Day 1-2: Three Statements | Master how IS, BS, and CFS link together | 10+ flow-through scenarios |
| Day 3: Working Capital | AR, AP, Inventory impacts on cash | The 'Revenue ≠ Cash' concept |
| Day 4: D&A and CapEx | Non-cash expenses, tax shields, PP&E | Every PE interview asks these |
| Day 5: Enterprise vs Equity Value | The bridge between EV and Equity Value | Foundation for LBO math |
| Day 6-7: Valuation Overview | DCF basics, trading comps, precedent transactions | Know when to use each method |
Week 1 Goals
- Answer any flow-through question in under 30 seconds
- Explain EV vs Equity Value without hesitation
- Understand why EBITDA is used in PE (cash proxy, capital structure neutral)
- Walk through a basic DCF step-by-step
Test Your Week 1 Knowledge
In an LBO Sources & Uses, which of the following is NOT typically a 'Use' of funds?
Week 2: LBO Mechanics & Modeling
This is the core of PE technicals. You need to understand LBO mechanics conceptually (for verbal questions) and be able to build a simple LBO (for modeling tests).
LBO Returns = EBITDA Growth + Debt Paydown + Multiple ExpansionThe three drivers of LBO returns. Each can contribute independently.
EBITDA Growth=Operational improvement (revenue + margins)Debt Paydown=Converting enterprise value to equity valueMultiple Expansion=Exit at higher multiple than entryWeek 2 Daily Schedule
| Term | Definition | Note |
|---|---|---|
| Day 8-9: LBO Fundamentals | Structure, return drivers, basic mechanics | Conceptual understanding first |
| Day 10: Sources & Uses | How deals are financed, typical structures | 60-70% debt is typical |
| Day 11: Debt Schedule | Mandatory amortization, cash sweeps, interest | How debt gets paid down |
| Day 12: Returns Calculation | MOIC, IRR, entry/exit equity | The outputs PE firms care about |
| Day 13-14: Paper LBO | Practice 10+ paper LBOs without Excel | This is an interview skill |
A PE firm buys a company for $100M (50% debt, 50% equity). After 5 years, EBITDA grows 50% and they exit at the same multiple. All debt is paid off. What is the approximate equity MOIC?
Common Week 2 Mistakes
- Confusing EV and Equity Value in return calculations
- Forgetting that debt paydown comes from FCF, not EBITDA
- Not understanding that MOIC and IRR can conflict (timing matters for IRR)
- Assuming multiple expansion when the question doesn't mention it
Week 3: Commercial Judgment & Deal Discussions
Senior PE interviewers care less about calculations and more about how you think about businesses. Week 3 develops the investment judgment that separates candidates who "do the work" from those who "think like investors."
Week 3 Focus Areas
| Term | Definition | Note |
|---|---|---|
| What makes a good LBO candidate? | Stable cash flows, low capex, pricing power, improvement potential | Know the checklist cold |
| Industry analysis | Market size, growth, competitive dynamics, moats | Porter's Five Forces |
| Value creation levers | Revenue growth, margin expansion, add-ons, working capital | What PE firms actually do |
| Deal discussions | Practice discussing 2-3 deals you'd invest in | Thesis, risks, returns |
Which characteristic is LEAST important when evaluating a good LBO candidate?
Sample Deal Discussion Structure
Company: [Name] — [One-sentence description]
Thesis: "We like this because of [2-3 specific reasons]..."
Entry: Entry at [X]x EBITDA, [debt/equity] structure
Value Creation: [Specific operational improvements]
Exit: Strategic or sponsor sale at [X]x, [MOIC/IRR] returns
Risks: "[Top 2 risks] — but we're comfortable because [mitigants]"
Week 4: Behavioral Prep & Final Polish
Week 4 focuses on the "soft" side that actually drives hiring decisions. Technical skills get you to the final round — behavioral fit gets you the offer.
Week 4 Priorities
| Term | Definition | Note |
|---|---|---|
| Your Story | Why PE? Why this firm? Why now? | 2-minute narrative |
| Deal Walk-Throughs | Prepare 2-3 deals you worked on in detail | Your role, learnings, outcome |
| Behavioral Questions | Leadership, teamwork, failure, conflict examples | STAR format |
| Mock Interviews | Full mock with timing and pressure | Get feedback, iterate |
Critical Behavioral Questions
Q: Why Private Equity?
"I want to be on the principal side of investing, where I can develop conviction on businesses and see value creation through. In banking, I built strong technical skills but was execution-focused — I want to be involved in the full investment lifecycle: sourcing, diligence, portfolio company work, and exits. PE offers the best combination of analytical rigor and business building."
Q: Walk me through a deal you worked on
Structure: Situation → Your Role → Analysis → Outcome → Learning
"On the [Company] M&A, I was the associate responsible for [specific work]. The key issue was [problem]. I [what you did]. The deal [outcome]. What I learned was [insight that shows growth]."
Q: Tell me about a time you failed
Pick a real failure, explain what happened, take ownership, and emphasize what you learned and changed. Avoid blaming others or picking a "fake" failure.
Daily Practice Checklist
30-Minute Daily Routine
- 10 min: Technical questions (accounting, LBO, valuation)
- 10 min: Deal discussion practice (talk through a company out loud)
- 5 min: Market news / recent deals
- 5 min: Review mistakes from yesterday
Key Takeaways
Key Takeaway
- Week 1: Master accounting flow-throughs and valuation basics — this is your foundation
- Week 2: Understand LBO mechanics conceptually and practice paper LBOs until they're automatic
- Week 3: Develop investment judgment — what makes a good LBO, how value is created, deal discussions
- Week 4: Polish your story, prepare behavioral examples, and do full mock interviews
- Consistency wins: 30-60 minutes daily beats weekend cramming
- Practice out loud: PE interviews are conversations, not written tests
Continue Your PE Prep
Dive deeper into each week's topics:
- How the 3 Financial Statements Link — Week 1 foundation
- LBO Explained Simply — Week 2 mechanics
- LBO Mechanics Deep Dive — Sources, uses, and returns
- What Makes a Good LBO Candidate — Week 3 judgment
- Top 20 PE Interview Questions — Comprehensive question bank
- PE Case Interviews — Invest vs Don't Invest framework