Arcesium Job Interview Preparation
Guide – Questions and Answers
This guide is designed to help candidates prepare for a job interview at Arcesium. It
provides a structured set of over 100 mock questions along with sample answers, organized
by key job responsibilities including legal document review, fund setup, fee allocation, NAV
calculation, and cross-functional collaboration.
1. Legal Document Review
Q1. What key clauses are typically included in a Limited Partnership Agreement (LPA)?
A1. An LPA typically includes clauses on capital commitments, fee structures, hurdle rates,
preferred returns, distribution waterfalls, clawback provisions, and valuation
methodologies.
Q2. How do you extract relevant fund terms from a PPM for system setup?
A2. I review the PPM to extract investor eligibility, fund objectives, fee structures, lock-up
periods, and investment guidelines, which guide setup of entities, classes, and rules in the
system.
2. Fund Structure Setup
Q1. What factors determine the need for a new class or series in a fund structure?
A1. A new class or series may be required for investors joining at different times, having
unique fee terms, or participating in different deals.
Q2. How are deal partitions used to manage fund allocations?
A2. Deal partitions isolate investments or performance for specific investors or strategies,
ensuring accurate allocation and reporting.
3. P&L Allocation & Fee Setup
Q1. Walk through the logic of a typical private equity waterfall model.
A1. A typical waterfall involves returning capital to LPs, paying a preferred return,
allocating a catch-up to the GP, and splitting residual profits per agreed ratios.
Q2. What is the impact of high-water marks on incentive fee calculation?
A2. High-water marks prevent incentive fees from being charged unless the fund surpasses
its previous peak NAV.
4. Investor Transactions & Capital Tracking
Q1. How do you process investor subscriptions with effective dating?
A1. Subscriptions are recorded with effective dates to ensure correct inclusion in NAV and
accurate ownership tracking.
Q2. What is the workflow for validating and booking redemptions?
A2. I verify redemption notices, check fund liquidity terms, calculate amounts, adjust NAV,
and reflect them in the investor ledger.
5. NAV Calculation & P&L Allocation
Q1. What components make up a capital roll statement?
A1. A capital roll typically includes opening capital, subscriptions, redemptions, net P&L,
fees, and closing capital.
Q2. How do you ensure NAV per share accuracy?
A2. By ensuring accurate unit calculations, validating P&L allocations, and reconciling with
administrator reports.
6. Return Calculations
Q1. How do you calculate investor-level IRR in Excel?
A1. Using the XIRR function with dated cash flows (subscriptions as negative, distributions
as positive).
Q2. What is the difference between money-weighted and time-weighted returns?
A2. Money-weighted reflects actual investor cash flows and timing; time-weighted isolates
investment performance regardless of cash flows.
7. Reconciliation and Break Resolution
Q1. How do you perform a full NAV reconciliation with an administrator?
A1. By comparing fund and investor-level balances, capital activities, P&L components, and
fees, then resolving any mismatches.
Q2. Describe your process for investigating a fee discrepancy.
A2. I check fee basis, applicable rates, calculation dates, and recalculate using supporting
documents to pinpoint issues.
8. Cross-Functional Collaboration
Q1. How do you ensure legal, ops, and tech teams are aligned on fund setup?
A1. I coordinate joint review sessions, maintain shared documentation, and align
interpretations of fund terms across teams.
Q2. What steps do you take during UAT for a new investor allocation feature?
A2. I create test cases, validate against expected outcomes, track bugs, and ensure fixes
before production deployment.
