Would be glad if you could provide some tips on how to utilise the LOMS effectively, and wonder if you do have any idea on how to equip myself well for PE (Private Equity) type interviews.

Hope to hear from you soon.

My Reply:

LOMS will help with the overall approach, structuring, hypothesis, proving your point, and communicating it.  For PE, it will vary on the firm as to how much financial analysis they’re expecting – liquidity ratios, debt coverage, that sort of thing (investment banking type things).

Bain Capital has a PE framework on their site somewhere. I have done PE client work before, and the underlying process is quite similar to other types of cases… we have this decision to make (usually invest or not)… and should we do it or not? Decide what the key factors are that would prove a “yes” hypothesis, and gather the data on each factor/category of factors.

Because PEs have to make a yes/no decision on an investment, often transaction price and financing approach will factor into the decision. So the PE that invests in Company X will have a broader set of issues than the CEO of Company X.

Most of my examples are geared around CEO of Company X, so you’d have to think about the difference between what the CEO of X cares about vs. the PE Investors of CEO X. The PE Investor cares about a super set of issues vs. the CEO… and generally it is around financial structure – debt vs. equity, interest coverage.
So basically you’ll probably have one or two more factors to add to a PE case vs. a case where you were serving the CEO of the target company.

Also the Bain Capital framework is useful to figure out what PE firms tend to care about, but I wouldn’t just blindly apply it to every case. You really have to stop and think about what’s most important for each particular case. Sometimes it matches a typical framework (65%+ of the time), other times there’s an unusual facet of the case where you really need to use either a custom issue tree or a (standard framework + X) or (standard framework – Y).