Project Westmere — Multi-Manager Concepts Screen
A 45-minute Conceptual Screen / Multi-Manager case study with a complete model answer
Modeled After
Citadel
Citadel's reported first-round screener, which covers conceptual investing questions alongside standard technicals — how you would ramp on a company, how you would value it — within a multi-round process that culminates in a virtual super day. Depth is PM-dependent and varies.
Structure and exercise format are modeled after Citadel — the screening format the firm is reported to use. The company, the financials and every figure in this case are entirely our own.
The Situation
Westmere Instruments plc (LSE: WSMI) makes in-line process analyzers and the sensor cartridges those analyzers consume. An analyzer is installed inside a customer's production line — a pharmaceutical fill-finish suite, a semiconductor wet bench, a specialty chemicals reactor train — and measures the process continuously rather than by drawing samples off to a laboratory.
Westmere Instruments plc
- Sector
- Industrials / process instrumentation — in-line process analyzers and the sensor cartridges they consume, sold into pharmaceuticals, semiconductors and specialty chemicals
- Size
- Geography
- Headquartered in Macclesfield, England; listed in London and quoted in pence; sells in fifty-one countries
- Ownership
- Situation
The Prompt
You are a candidate coming out of investment banking, interviewing at a multi-manager platform. This is the second conversation.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
Concepts screen brief (material-1.pdf)
Westmere Instruments plc data pack (material-2.pdf)
What You Have to Produce
The deliverables, in the order the committee will read them. The exercise runs 45 minutes.
QUESTION 1
Why a high multiple need not be expensive
QUESTION 2
Growth, reinvestment and the multiple
QUESTION 3
Earnings yield and the cost of capital
QUESTION 4
Short interest as evidence, not signal
QUESTION 5
Capital allocation across a concentrated book
QUESTION 6
Structuring a ramp on an unfamiliar industry
How to Approach It
The order a strong candidate works in, and why. This is the shape of the answer — the finished memo is in the solution set below.
- 0:00 – 0:05
read the pack once and decide what each question needs
- 0:05 – 0:12
question one, and the identity that carries three of the six
- 0:12 – 0:19
question two, the split, and the question it raises
- 0:19 – 0:26
question three, and the two errors
- 0:26 – 0:33
question four, measured before answered
- 0:33 – 0:39
question five, sized rather than chosen
- 0:39 – 0:45
question six, and the write-up
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
A multiple is a claim, and claims can be tested
The instinct a banking background builds is to compare a multiple with a set of other multiples. The instinct this format rewards is to ask what the multiple is asserting and then test the assertion arithmetically. Every one of the first three questions is the same move in a different costume: convert a price into a statement about the future, then check whether the statement is one you believe.
Growth is not free, and the identity says why
Steady-state growth is the retention rate times the return on what is retained. Two companies can grow at the same rate and be worth very different amounts, because one of them buys that growth with capital it earns a high return on and the other buys it with capital it barely earns its cost on. Every argument about whether a compounder is expensive collapses into that identity, and it is two disclosures and one multiplication away.
An earnings yield is a no-growth return
The single most common error in this whole area is comparing an earnings yield with a cost of equity and concluding that a growing company cannot clear its hurdle. An earnings yield is what you would earn if the company never grew and paid everything out. What a shareholder in a growing company earns is the payout yield plus the growth the retained earnings buy — and the ranking a yield produces can be exactly the reverse of the ranking that measures what you keep.
Evidence versus signal
Short interest is evidence that a capitalized, adversarial party has taken the other side of your view. It is never a signal about direction. The way to use it is to convert the position into the claim it is making — a required move, in a required time, at a known carry — because a claim can be argued with and a level cannot. The moment short interest is treated as an answer rather than as a question, the work stops.
Size is a risk calculation, not a conviction calculation
A position is the loss budget divided by the distance to the stop, and the distance to the stop is set by the stock's own noise rather than by how much you like the idea. It follows that names sharing one driver are not diversification, that a beta-neutral notional is not beta neutral, and that concentration is a decision to run less capital. Interviewers at this format ask the question specifically to see whether a candidate reaches for that arithmetic or for a story.
A ramp ends by naming what you do not know
Find the unit, find the installed base, find the cost of leaving, find the cycle, and then name the facts that would change your mind. The last step is the one candidates drop under time pressure and it is the one that distinguishes an analyst from a summarizer. A ramp that ends in a view has usually stopped early.
What Makes It Hard
The specific traps in this case — the places candidates lose the assessment without noticing.
Check Your Answer
Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.
How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.
What the Case Asked For
The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.
The Model Answer
The worked answer in full: memo, built the way a banker would actually build it. It is a reference, not a submission — a strong answer under the clock is far shorter.
What the Solution Covers
- —Why a high multiple need not be expensive
- —Growth, reinvestment and the multiple
- —Earnings yield and the cost of capital
- —Short interest as evidence, not signal
- —Capital allocation across a concentrated book
- —Structuring a ramp on an unfamiliar industry
Memo
The written recommendation and how it was reached
Upgrade to Diamond
Sign up and upgrade to Diamond to unlock the memo and the audio walkthrough.
Get StartedDownloads are available to Diamond members
Memo (PDF) — yours to open, edit and rebuild
Walkthrough
A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.
Audio Walkthrough
How to approach Project Westmere — Multi-Manager Concepts Screen
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
Is this a modeling test?
No, and treating it as one is the fastest way to fail it. There is no spreadsheet, no template and nothing to build. Every calculation in a strong answer is a division, a multiplication or a subtraction that fits on one line, and the arithmetic exists to settle an argument rather than to be the argument. A candidate who asks for Excel has misread the room.
Should I build a discounted cash flow to decide whether the multiple is justified?
No. Two thirds of a high multiple is a claim about how long the reinvestment lasts, and a discounted cash flow answers that with a terminal assumption — which moves the question rather than settling it. The split between a company's no-growth value and the value of its growth does the same work with no forecast, no discount-rate debate and no model, and it is available in two calculations.
Do I need to know anything about process instrumentation?
No, and question six exists because you do not. The pack gives you every operating figure a ramp needs, and what is graded is the structure you impose on them and the order you do things in — not domain knowledge you could not have had.
The earnings yield is well below the cost of equity. Does that settle the case?
It settles nothing, and explaining why is most of the marks on question three. There are two separate problems with that comparison, one about which yield belongs against which hurdle and one about what an earnings yield measures in the first place. Get both out, in that order, and then state the condition under which the correction stops working — because there is one, and a candidate who states it is the one who has understood rather than memorized.
For question four, is the right answer high short interest because of a squeeze?
A squeeze is not one of the good reasons, and reaching for it is a recognizable tell. There are three reasons that hold, all of them about what short interest tells you rather than about what it might do to the price, and every one of them is conditional on the same thing: that you can state the short's thesis in a sentence and say why it is wrong. Answer without the condition and you have answered a different question.
How much should I write?
Roughly two thousand words in forty-five minutes, which is a thinking rate rather than a typing rate. Put your answer to the whole conversation at the top, take the six in the order asked, put a number in each, and finish with what would change your mind. An unfinished answer with the arithmetic shown beats a finished one without it.
Why is there no house view on the name?
Because the format is not testing whether you agree with anyone. Two candidates reaching opposite conclusions can both score well if both have done the arithmetic and both have said what would change their minds. What separates the answers is structure and falsifiability, not the side you land on.
About This Conceptual Screen / Multi-Manager Case Study
Conceptual Screen / Multi-Manager case study for hedge fund interviews. 45-minute format covering why a high multiple need not be expensive, growth, reinvestment and the multiple, earnings yield and the cost of capital. Includes the full prompt, a written memo and an audio walkthrough.
This case study sits in Hedge Fund, under Investing Concepts. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
45-Minute Format
The time limit a real assessment would give you
Memo
Included in the model answer
Audio Walkthrough
How to approach the case under time pressure
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