Private equity and LBO case competitions for undergrads

Which private equity case competitions can undergrads enter?

The list below is every competition we track for private equity, checked on each organizer's page. Several are limited to one school or to invited schools, so the eligibility line decides which you can plan around.

• Private Equity Pitch Competition (St. John's Tobin College): teams of three or four from the same university with a faculty advisor, from participating business schools, in person in Manhattan.
• Undergraduate Alpha (UNC Kenan-Flagler): brackets that include private capital and credit, mostly first-years and sophomores.
• Cornell International Real Estate Case Competition: one team per university of up to six undergraduates, every member with a speaking role, with the case released days before.
• Harold E. Eisenberg Foundation Real Estate Challenge: undergraduate and graduate teams from select universities.
• UChicago Private Markets Program: a one-week program for UChicago College students that ends in an LBO case competition.

• Private Equity Pitch CompetitionTobin College of Business, St. John's University$6,000 first, $3,000 second, $1,000 third; lodging and transport are the team's own expense.
• UChicago Private Markets Program LBO Case CompetitionPolsky Center, University of ChicagoNot stated on the page.
• Undergraduate Alpha CompetitionInvestment Management Center, UNC Kenan-Flagler Business SchoolNot stated on the page.
• Cornell International Real Estate Case CompetitionCenter for Real Estate and Finance, Cornell SC Johnson College of Business$10,000 first, $5,000 second, $2,500 third, $1,000 fourth.
• Harold E. Eisenberg Foundation Real Estate ChallengeHarold E. Eisenberg Foundation$10,000+ in scholarships to the top team or teams.

What does a PE case competition ask you to build?

Almost every PE case comes down to one question: should the fund buy this company at this price, and what does it earn if it does? The deliverable is a recommendation with a simple LBO behind it, plus the risks that would change your answer.

• An investment thesis in three sentences: why this business, why now, why this price.
• A simple LBO: entry valuation, debt and equity split, a few years of operating cash flow, debt paydown, and an exit.
• Returns: the multiple of money and the IRR, with the main assumptions stated.
• Value creation: how much of the return comes from growth, margin, debt paydown, and multiple change.
• Risks and a downside case: what has to go wrong for the deal to lose money.

What does a worked LBO return look like?

Here is the size of model a competition team can build and explain in a day. Assume a company with 50 of EBITDA bought at 8 times, so the enterprise value is 400. The fund borrows 250 (5 times EBITDA) and puts in 150 of equity. Ignore fees and assume no dividends.

Over five years EBITDA grows to 70 and the company pays down 100 of debt from its free cash flow, leaving 150 of debt. Exit at the same 8 times: enterprise value is 560, equity is 560 minus 150, or 410. The multiple of money is 410 divided by 150, about 2.7 times, and the IRR is about 22 percent, because 1.22 to the fifth power is roughly 2.7.

In the deck, split that gain into its sources: EBITDA growth adds 160 of enterprise value at the same multiple, and debt paydown adds 100 to equity. Judges ask exactly that question, so have the split ready.

How does a PE case competition help you recruit?

Undergraduate private equity seats are few and usually open from September to January, so a competition result is one of the few ways to show buy-side judgment before you have a banking internship. It also gives you a deal you know cold for the paper LBO and the case study in an interview.

The most useful part is often the Q and A. A judge who invests for a living will push on your exit multiple, your leverage, and your downside. If you can answer calmly with numbers, you have rehearsed the hardest part of a PE interview.

1. Put the competition and result on your resume with the company type and your role, such as building the model.
2. Keep a one-page summary of your case: thesis, returns, top two risks.
3. Rehearse walking through it in two minutes, the length an interviewer will give you.
4. Write to one judge afterward with a question their feedback raised.

Questions students ask

Do I need to know how to build an LBO before entering?

You need the basics: entry, debt, cash flow, paydown, exit, and returns. A team can learn that in a few weeks, and the competition is a good reason to learn it.

Can freshmen enter PE competitions?

Some, yes. UNC's Undergraduate Alpha says most of its competitors are first-years and sophomores. Others ask for teams from the same university with a faculty advisor and set no class year in the list.

Are real estate case competitions useful for private equity?

Yes. A real estate case is an acquisition with leverage and an exit, the same logic as an LBO, and real estate private equity is a buy-side path of its own.

What tax rate should we assume in an LBO case?

Use the one the case gives you. If it gives none, state a round rate such as 25 percent on the first slide of the model and keep it consistent.

Is a PE competition worth more than a stock pitch?

For PE recruiting, usually yes, because it tests the same buyout logic the interview does. For hedge fund recruiting, the stock pitch is closer to the job.