Case Type: private equity, investment; finance & economics; mergers & acquisitions; math problem.
Consulting Firm: Capital One first round job interview.
Industry Coverage: Financial Services; Tourism, Hospitality & Lodging; Transpoortation.
Case Interview Question #00142: Your consulting team has been retained by Goldman Sachs Capital Partners, the private equity arm of Goldman Sachs (NYSE:GS). Based in New York City, New York, GS Capital Partners is focused on leveraged buyout and growth capital investments globally. It has raised approximately $39.9 billion since inception across seven funds and has invested over $17 billion.
To diversify its assets, GS Capital Partners is considering purchasing one of two cruise lines: “Carnival Cruise Lines” operates in the Mediterranean and has an initial cost of $25 million, while “Royal Caribbean” operates in the Caribbean and has an initial cost of $50 million. Both cruise lines are profitable, and Goldman Capital has an ROA (Return On Assets) of 20%. Which one would you advise Goldman to choose? How would you start your analysis? What factors do you need to consider?