Private Equity Judgement Case Practice

Reviewed by Fallon Han· Updated 2026-05-22 18:50:08.416

This conversation was generated using Cook'd AI's career assistant and reviewed by Fallon Han from our editorial team for accuracy.

I am a final-year finance student in Hong Kong, and I want to practice a client-facing case for a family office internship. The scenario is that a principal asks me to evaluate a private company and explain the view clearly. I want to test my judgment, discretion, and how I would speak to a wealthy client without sounding too technical. No sponsorship needed, if that matters.

Good setup. I will treat this like a real family office discussion: you need to show commercial judgment, sensitivity around private information, and a clean recommendation. Start by clarifying the purpose of the valuation. A principal does not just want a number. They want to know whether the business is attractive, what could go wrong, and how liquid the position might be. A strong answer should cover four things: 1. Business quality and durability of earnings 2. Valuation approach and why it fits a private company 3. Key risks, including governance and liquidity 4. How you would explain it simply to a principal If you want, I can now play the principal and ask you to make the call.

Yes, please play the principal. Keep it realistic and a bit demanding. The company is a private consumer brand in Asia with decent growth, but limited disclosure. I need to explain whether it is worth pursuing and how I would frame the view to the client.

Here is your case. The founder of a private consumer brand in Asia is looking for a minority investor. The business has strong revenue growth, but the financials are only partially audited, margins have been volatile, and a few family members are involved in management. A wealthy client wants your view on whether it is worth investing, and if so, at what level of conviction. Your task as the analyst is to tell me: 1. What information you would request first 2. How you would assess value without overclaiming precision 3. What red flags would make you cautious 4. How you would present the recommendation to a principal in plain language Remember: discretion matters. Do not sound like you are trying to impress with jargon.

I would first ask for the latest audited accounts, monthly management numbers, revenue by product and geography, gross margin trends, customer concentration, debt, related-party transactions, and cap table details. I would also want to understand the founder's role, governance structure, and whether there are any shareholder rights issues. For value, I would not rely on a single point estimate. I would triangulate using comparable listed consumer companies, precedent private transactions if available, and a sanity check on earnings power. Because disclosure is limited, I would apply a discount to reflect illiquidity and information risk. The main red flags are weak audit quality, family influence that could distort decisions, volatile margins that may mean the growth is not yet durable, and any concentration in one product or one channel. If related-party dealings are material, I would be extra cautious. To a principal, I would say the business may be attractive if growth is real and repeatable, but I would treat it as a selective opportunity rather than a high-conviction core holding until governance and reporting improve.

That is a solid framework. A few refinements will make it sound more like someone who understands how a principal thinks. First, prioritize. Do not list ten data requests in the same breath. Lead with the three that change the decision most: audited quality, earnings quality, and governance. Second, on valuation, avoid saying you can "derive fair value" as if it is precise. Say you are building a valuation range and testing whether the asking price leaves enough margin of safety. Third, when speaking to a wealthy client, translate the risk into plain terms. For example: "The business may be growing, but we do not yet have enough visibility to underwrite that growth as durable cash flow." That sounds measured and credible. Finally, the recommendation should not be binary. You can say: pursue only if the price compensates for limited disclosure, insist on stronger information rights, and size the exposure modestly. Want me to push you with a follow-up on what happens if the founder refuses stronger reporting?

Yes. If the founder refuses stronger reporting, I would see that as a meaningful negative because we would be taking governance risk without enough protection. I would explain to the principal that in private investing, access to information is part of the return profile. If we cannot get regular reporting, we should either lower the price materially, ask for tighter rights, or walk away. I would say this carefully because I would not want to sound aggressive to the founder. I would frame it as protecting both sides: the investor needs visibility, and the company benefits from disciplined oversight. If there is no compromise, I would recommend not proceeding.

Good. That is the right tone for a family office setting. You showed discretion, you did not sound confrontational, and you linked governance to valuation, which is exactly what a principal wants. A strong closing line in the interview could be: "My view is that the business may be interesting, but without better reporting and shareholder protections, the risk-adjusted return is hard to justify. I would only recommend proceeding if the price, rights, and visibility together create enough downside protection." Evaluation summary: - Commercial judgment: Strong - Client communication: Strong - Sensitivity and discretion: Good - Valuation thinking: Good, but could be more specific on range and downside - Overall readiness for a family office internship: Promising If you want, I can next turn this into a scored interview report with strengths, weaknesses, and a model answer.