Ares Management — Investment Banking Mock Interview
Private equity return mechanics, IRR versus MOIC comparisons, three-statement with debt-financed PP&E, and PE operating metric deep-dives
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How to Prepare for Ares Management Interviews
Master IRR Versus MOIC Trade-Off Analysis
Ares features two detailed IRR-versus-MOIC comparison problems that require actual math. Calculate 1.25^5 versus 3x and 1.35^2 versus 1.20^4 to determine which is better. Then discuss the qualitative factors: reinvestment opportunities, risk exposure over longer hold periods, and fund-level implications.
Know PE Operating Metrics by Category
The interview asks for a comprehensive list of metrics PE investors track, organized by category: profitability (EBITDA, margins, ROIC), cash flow (cash conversion, working capital dynamics), customer economics (CAC, LTV, churn, NRR), and operational efficiency (revenue per employee, capacity utilization).
Understand Capex as a Double-Edged Sword in LBOs
Ares specifically asks about the pros and cons of capex in a leveraged buyout. Know the tension: capex can enhance enterprise value through operational improvements but reduces free cash flow available for debt paydown. The optimal balance depends on whether growth capex generates returns above the cost of debt.
Prepare PE Return Benchmarks
The interview asks what constitutes good IRR and MOIC for a PE firm. Know the ranges: 20-25%+ IRR, 2-3x+ MOIC for strong funds; 15-20% minimum; how targets vary by fund size (mega-funds vs. middle-market); and how gross returns translate to net after 1.5-2% management fees and carried interest above an 8% hurdle.
What Makes Ares Management Interviews Unique
Multiple IRR-Versus-MOIC Comparison Problems
Ares features two separate IRR-versus-MOIC problems that require actual computation, not just conceptual understanding. The second problem reveals the counterintuitive result that a lower IRR over a longer period can produce a higher total return, testing whether candidates rely on intuition or math.
PE-Specific Operating Metric Framework
Rather than asking generic valuation questions, Ares asks specifically what metrics a PE investor would focus on. This requires organizing your answer around the PE value creation thesis: profitability improvement, cash flow optimization, customer economics, and operational efficiency.
Cross-Border DCF Risk Adjustment Discussion
A distinctive question asks how to factor cross-border risk into a DCF, covering country risk premiums, currency risk handling (local vs. home currency approaches), scenario analysis, and the critical warning against double-counting risk in both cash flows and the discount rate.
Value Creation: EBITDA Growth Versus Debt Paydown
The interview directly asks whether a dollar increase in EBITDA or a dollar of debt paydown creates more enterprise value. The EBITDA dollar is magnified by the exit multiple (e.g., 10x), while debt paydown increases equity value only dollar-for-dollar. This crystallizes the most important concept in PE value creation.
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About This Ares Management Mock Interview
This session simulates an Ares Management technical interview with a strong private equity focus. It covers the difference between earnings and free cash flow, FCFE versus FCFF (levered versus unlevered free cash flow), PE-specific operating metrics (EBITDA margins, ROIC, cash conversion, customer unit economics, revenue per employee), the price/volume/cost preference framework with a granular gross margin-level variant, five core IRR levers for PE investors, a detailed IRR versus MOIC comparison (25% IRR over 5 years versus 3x MOIC, then 35% over 2 years versus 20% over 4 years with reinvestment considerations), three-statement walkthrough for debt-financed PP&E purchase (Year 0 and Year 1 with interest and depreciation), capex pros and cons in an LBO context, exit multiple drivers, EBITDA margin expansion levers, terminal value as the greatest DCF driver, cross-border DCF risk adjustments, EBITDA growth versus debt paydown value creation comparison, a full LBO calculation with flat EBITDA and final-year bump, benchmark PE returns (IRR, MOIC, hurdle rates, fee structures), and a multi-part M&A problem with post-synergy board-level analysis.
This topic is part of the Firms section of our investment banking mock interview library. Each session includes multi-speaker audio with realistic interviewer questions and candidate responses, plus a full interactive transcript you can follow along with or study independently.
Audio Recording
19 minutes of multi-speaker audio
Full Transcript
Interactive transcript with timestamps
1 Technical Session
Ares Management - Technical Interview
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Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
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Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
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