Financial Consutling - CDD

Commercial due diligence cases are essentially strategy cases with an investor's perspective. Instead of asking "What should the company do?", you're asking "Should the investor buy this company?"

The most common CDD topics include:

• Market attractiveness (size, growth, trends)
• Competitive positioning
• Customer base and concentration
• Revenue growth opportunities
• Sustainability of margins and profitability
• Key risks (competition, regulation, disruption)
• Value creation opportunities after the acquisition

For a Financial Services team, I'd also expect cases involving banks, insurers, asset managers or fintechs, where you'll need to think about market dynamics, customer segments, regulation and competitive positioning.

One tip: don't overcomplicate the framework. A good CDD answer usually follows a simple flow:

1. Is the market attractive?
2. Is the target well positioned?
3. Can it continue to grow and create value?
4. What synergies this deal generates?
5. What are the key risks?
6. Based on that, would you recommend the acquisition?

That's the level of thinking interviewers are typically looking for.

Hi there,

Mauro's framework is spot-on and I'd use exactly that flow, so rather than repeat it, let me give you concrete example prompts you can actually practise on, plus how the FS angle changes the case.

Typical CDD prompt shapes. They almost always come as "A PE fund/ strategic acquirer is considering buying [target]. Should they proceed?" Common setups:

A private equity fund is evaluating a mid-sized challenger bank/ neobank - assess whether to invest. A buyer is looking at an insurance brokerage rolling up smaller players - is the market and the roll-up thesis attractive? A fund considering a wealth/ asset manager - are the AUM growth and fee margins sustainable? A payments/ fintech processor being acquired - how defensible is its position against competitors and disruption? A specialty lender or consumer credit business - assess loan book quality, growth runway and regulatory exposure. A SaaS provider selling into financial institutions - sticky revenue or not? Occasionally a non-FS target too (a retailer, a healthcare services chain), since EY-P FS teams still run generalist CDD.

What makes an FS CDD different - and where you win points. Layer these onto Mauro's flow:

On market attractiveness, interest rates and the rate cycle materially move revenue for banks, lenders and insurers - flag it. On positioning and revenue, know the actual economics: banks make money on net interest margin plus fees; asset/wealth managers on AUM × fee rate (so AUM growth and fee compression both matter); insurers on underwriting profit plus investment income; payments on take rate × volume. On risk, regulation is a first-order factor in FS, not a footnote - capital requirements, licensing, compliance cost, and regulatory change can make or break a thesis. And on margins/sustainability, watch for fee compression, rising customer acquisition cost, and disruption from fintech/ embedded finance.

Two practical tips. First, always anchor back to the investor: every branch should ladder up to "does this support or weaken the buy decision," not "what should the company do." Second, know the target's revenue-and-cost model cold before you go deep - in FS, mis-modelling how the business actually earns money is the fastest way to lose the interviewer.

Happy to run a live FS CDD mock (say, a neobank or an insurance broker) if you want to pressure-test the flow under time.

Best,

Leo

Hi there,

First of all, congratulations on the invitation from EY!

I would be happy to share my thoughts on your question:

• First of all, I wonder why you ask this rather fundamental question when you have applied for this specific role. Assuming you know about the composition of a CDD deck, case studies can stem from every single section of it.
• Moreover, for instance, I would advise you to be(come) comfortable building a revenue forecast bottom-up from customers times price, sizing a market from two or three assumptions, working with growth rates and margins, and doing a rough sanity check on whether the investor can make a decent return at the asking price.

If you would like a more detailed discussion on how to best prepare for your upcoming EY interviews, please don't hesitate to contact me directly.

Best,

Hagen

Hi,

Tons of investment / PE cases available in MBA case books.

Frameworks are also readily available. The difference is whether you can demonstrate the depth of thinking expected.

I talk about CDD and PE type work here: What Is Private Equity Consulting?

All the best!