Rollover Equity

This question practices a core private equity concept in leveraged buyouts: how management can invest alongside the sponsor by rolling over existing ownership or putting in new capital. Candidates need to understand how that additional equity fits into the deal structure, how it changes the funding mix, and how it affects the economics for the buyer and management. Interviewers ask about this because it tests whether you understand transaction mechanics as well as the incentives that make a buyout work. It also checks whether you can explain why private equity firms value management alignment, shared risk, and evidence of confidence in the business.