Moelis LBO Interview Questions 2027: Model, Assumptions & Follow-Ups
LBO questions at Moelis go deeper than "walk me through an LBO." Interviewers will spend fifteen minutes attacking your assumptions — purchase price, leverage, exit — and candidates who only memorized the model steps get exposed fast. Here is what Moelis actually asks and how to handle the follow-ups.
What Moelis LBO Interview Questions Cover
The standard Moelis LBO interview questions start with the model walkthrough: sources and uses, purchase price, debt financing, projected cash flows paying down debt, and exit via sale at an assumed multiple. Then come the assumption attacks: "Why 60% leverage and not 40%?" "What happens to returns if the exit multiple compresses by 1x?" "What makes a good LBO candidate?" Each follow-up tests whether you understand the economics or just the mechanics.
The Follow-Ups That Decide Moelis LBO Interview Questions
Prepare these cold:
- Good LBO candidate: stable cash flows, low capex, strong market position, low existing leverage, assets for collateral.
- Leverage effect: more debt boosts equity IRR (if returns exceed debt cost) but increases risk — be ready to discuss the tradeoff, not just the direction.
- What drives returns: deleveraging, EBITDA growth, and multiple expansion — in that order of reliability.
- Paper LBO math: entry equity, exit equity, multiple on money, approximate IRR — doable on paper in five minutes.
How to Prepare Moelis LBO Interview Questions
- Drill the real questions. Our 2027 Moelis Investment Banking Online Assessment Tutorials covers the exact Moelis LBO interview questions — the model walkthrough plus the fifteen-minute assumption follow-ups — with model answers.
- Do three paper LBOs. Entry multiple, leverage, growth, exit — compute IRR by hand until it is fast.
- Build an opinion. For every assumption, have a one-line defense ready. "Why that leverage?" should never draw a blank.
Fifteen minutes of assumption follow-ups is where Moelis separates candidates who understand LBOs from candidates who memorized them. The questions are predictable — the same follow-ups appear year after year. Prepare the real set and the deepest round of your interview becomes the round you control.
FAQs
What is a paper LBO? A simplified LBO done on paper without a full model — entry price, debt, cash flows, exit — used in interviews to test your grasp of returns math.
What makes a good LBO candidate? Stable, predictable cash flows; low capital intensity; defensible market position; minimal existing debt; tangible assets.
How does leverage affect IRR? Higher leverage magnifies equity returns when asset returns exceed the cost of debt — but it also magnifies downside and distress risk.
What exit multiple should I assume? State your assumption explicitly and defend it — typically at or near entry multiple unless you have a reason for expansion or compression.
Preparing for Moelis & Company's LBO questions? Our 2027 Moelis Investment Banking Online Assessment Tutorials has the exact questions and answers — $79 one-time, instant download.
