Deal team
The model that has to work
Your MD wants a 22% IRR on a logistics buyout. At a 7.0x entry multiple the model gets to 16%. You can stretch leverage, stretch the exit multiple, or hand back the honest number.
All simulators
Buyouts, leverage and operational change
Private Equity simulator
Your seat: Deal team, mid-market buyout fund
Price entry, size leverage, run diligence and decide when to sell. More debt lifts your returns, right up until one bad year eats your covenant headroom.
What you'll learn
- How entry multiple, leverage and exit timing combine into IRR
- Why diligence you skip becomes a covenant problem later
- How sponsors, lenders and LPs each judge the same decision differently
Who it's for
Anyone targeting a private equity or corporate development seat.
It works as interview prep: you'll have made the calls an interviewer asks about, and seen what happens when you get them wrong.
Decisions from your first year
Three calls a year. Here's the kind of thing that lands on your desk before your first promotion.
Diligence
A gap in the quality of earnings
Two weeks from signing, the QoE report shows 18% of last year's EBITDA came from a one-off insurance recovery. Nobody upstream has read page 41.
Regulation
The carbon price triples
New rules triple the cost of emissions allowances. Your industrial platform emits 340kt a year and its margin was already thin.
The ladder
Each rank has its own bar for returns and standing. Clear both to move up.
- Analyst
- Associate
- Vice President
- Principal
- Managing Director
- Partner
Terms you'll use
- EBITDA
- Earnings before interest, tax, depreciation and amortisation.
- Entry multiple
- Price paid as a multiple of EBITDA.
- Leverage
- Total debt divided by EBITDA.
- Covenant
- A contractual test that hands you rights when the business deteriorates.
- IRR
- The annualised rate of return, weighted by timing.
- Multiple of money
- Total cash out divided by cash in.
- Carried interest
- The manager's share of profits above a hurdle.