Private Equity Investing

Euromoney Learning Solutions

Euromoney Learning Solutions

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About the course

Private markets attract a considerable amount of attention and enthusiasm for their performance, diversification effects, and growth of assets under management. Among the different strategies, private equity capitalises on new technologies and trends (venture capital), fast growth companies (growth capital), repositioning of assets and strategic evolutions (leveraged buyouts). Private debt aims at providing investors a differentiated exposure to yield (senior/direct lending), possibly including capital gains (mezzanine debt) and to company restructuring (distressed debt, loan-to-own). Private real assets (private real estate, private infrastructure, timber, natural resources) offer different combinations of yield capital gains, inflation protection and downside protection. All these strategies share common traits, such as the use of equity and debt instruments, over a rather long duration, with active involvement of fund managers and negotiation of specific rights, usually to support high risk/high return projects.

This masterclass provides delegates with a comprehensive understanding of private markets. It will:

  • Examine the role of private markets in an asset allocation, the instruments used and the challenges associated with their use
  • Examine the dimensions of private markets investing and the tools that investors use
  • Illustrate the portfolio construction process
  • Analyse the economics of private markets funds, their fund raising process and their investor relations
  • Analyse a representative LBO transaction from deal sourcing, to structuring, to execution, to exit
  • Illustrate key due diligence issues
  • Demonstrate how to structure and fund deals
  • Examine valuation methods, and apply the most frequently used
  • Demonstrate how to generate returns through value creation post-acquisition, use of tax and financial leverage, operational improvements, 100-day plans and other operational and strategic improvements
  • Review exit scenarios such as trade sale, dividend recaps, IPOs, and write-offs
  • Explore reporting of funds, and accounting frameworks

Attendees will see private markets from the standpoint of both:

  • The buy-side (investors), i.e. capital providers to the asset class, looking to commit it according to specific risk-return-liquidity dimensions
  • Fund managers (front office), i.e. intermediaries investing capital to acquire, grow and sell companies and assets
  • Fund managers (middle and back office), i.e. Intermediaries fund raising, monitoring investments and reporting on it
  • The sell-side (ecosystem), i.e. intermediaries assisting fund managers or interacting with them

Methodology

The course will combine dynamically presentations, ateliers, business cases, role playing and interactive Q&A sessions. Active participation is encouraged, and practical exercises will be used.

Agenda

Day 1

Investing: Funds, funds-of-funds, mandates, co-investments

Setting the right environment

  • Choosing the right environment for selecting funds: from outsourcing to in-house operations
  • Setting up the right program, depending on the constraints
  • Challenges: adverse selection, contagion, lack of alignment of interests, conservatism, herding effects
  • Workshop: endowment, family office, pension funds – alike and different
  • Competition between investors
  • What managers look for in an investor?

Selecting funds and fund managers

  • Selecting funds (and funds-of-funds): sourcing, approaching and accessing
  • Specificities: persistence of return
  • Workshop documentation: The private placement memorandum
  • Workshop documentation: The due diligence questionnaire (and the DD pack)
  • Request for proposals: virtues and limits
  • Current debates: concentration of fund managers, conflicts of interests, generational change

Negotiating

  • Workshop documentation: the Limited Partnership Agreement
  • Most frequent clauses: key man, most favoured nation
  • Sponsor (or lack thereof)
  • First closing participation and other advantages
  • Advisory Board and representation
  • Current debates: fee level, hidden fees, hurdle rate

The temptation of co-investing

  • Set up and resources
  • Constraints
  • Liabilities
  • Business case: Formula 1 and the GPFG
  • Statistics on co-investing

Q&A and wrap-up

Day 2

Investing in private companies: sourcing, analysing, negotiating, creating value and exiting

Investment framework

  • The investment process: five steps
  • Choosing the tools: the case of the LBO
  • Other types of investments

Analysing a deal: mid-market cleaning company (business case I)

  • Interactive business case (no preparation): deal analysis I
  • Interactive business case: deal analysis II
  • Negotiation and valuation

Analysing a deal: the case of a mid-market cleaning company (business case II)

  • Structuring
  • Leverage effects
  • Performance calculation and analysis
  • Limits and risks

The deal and post-investment activities

  • The closing and its legal documents
  • 100-day plan, implementation, most frequent operations
  • Value creation

Exiting a deal: IPO, trade sale, secondary sale,...

Q&A and wrap-up

Experts

Cyril Demaria

Cyril Demaria capitalizes on 18 years of experience in private equity investments (venture capital, funds selection), fundraising and structuring (start-up and funds), research and advisory. He combines practical and entrepreneurial experience, academic knowledge and lecturing experience. He is ...

Videos and materials

Private Equity Investing at Euromoney Learning Solutions

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Disclaimer

Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

Full disclaimer.

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