Private Equity Case Study Preparation — Complete Guide

PE case study framework

Private equity case studies test your ability to think like an investor in 3-4 hours. Unlike banking models focused on precision, PE cases prioritize investment judgment: identifying value creation levers, quantifying risk, and building a coherent thesis. The structure below converts limited time into a compelling presentation.

Time allocation (4-hour case)

• 30 minutes: Read materials, outline key drivers, flag red flags
• 90 minutes: Build LBO model with base/upside/downside scenarios
• 60 minutes: Investment thesis with 3 value creation levers
• 30 minutes: Risk section with mitigants
• 30 minutes: Executive summary and formatting

LBO model priorities

• Sources & uses: entry multiple, leverage assumptions, fees (2% of enterprise value)
• Operating model: revenue build by segment, margin expansion story, working capital normalization
• Debt schedule: mandatory amortization, cash sweep logic, covenant cushion
• Returns: IRR/MOIC sensitivity to exit multiple and EBITDA growth

Investment thesis structure

• Situation overview: 2-3 sentences on sector, company position, transaction rationale
• Investment positives: 3 bullets with quantified impact (e.g., "40% EBITDA uplift from procurement consolidation")
• Value creation plan: 100-day priorities, operational improvements, add-on opportunities
• Exit strategy: strategic buyer universe, multiple expansion catalysts, timeline

Common value creation levers

• Revenue: pricing optimization (2-3% annually), cross-sell/upsell, geographic expansion, channel development
• Margin: procurement savings (15-20% of addressable spend), overhead reduction, plant consolidation
• Multiple expansion: professionalizing management, ESG improvements, sector repositioning
• Inorganic: bolt-on acquisitions at 4-6x EBITDA vs. platform at 8-10x

Risk assessment framework

• Market risks: cyclicality, competitive dynamics, regulatory changes
• Operational risks: customer concentration, integration complexity, talent retention
• Financial risks: covenant headroom, refinancing risk, working capital volatility
• Mitigants: specific actions with owners (management incentives, strategic partnerships, hedging)

Presentation tips

• Lead with conviction: "Strong buy at 8.5x with clear path to 25% IRR"
• Quantify everything: avoid "significant upside" — say "$15M EBITDA uplift"
• Show scenario analysis: base case 20% IRR, upside 30%, downside 12%
• Address the obvious concerns upfront rather than hoping they won't ask

Excel shortcuts for speed

• Alt + = for autosum, F4 to lock references, Ctrl + Shift + arrow to select ranges
• Build a simple 3-statement model first, layer in complexity if time allows
• Use consistent color coding: blue for inputs, black for formulas, green for links

Post-case debrief questions

• "What's your biggest concern with this investment?" — pick operational, not market risk
• "What would you diligence in the next 30 days?" — focus on customer interviews and competitive positioning
• "How would you think about add-ons?" — discuss integration playbook and multiple arbitrage