Private Equity, Legal Perspectives & Documentation (Corporate Finance School)

Learn about the latest trends and legal issues facing the private equity industry

If you would like to know more about the private equity industry from a legal perspective, this is a course you must attend.

Private Equity: Legal Perspectives & Documentation is designed to provide you with a solid understanding of how law and finance work together in the private equity industry to ensure informed decision-making.

Focusing on key legal steps and documentation with sample agreements, you will learn about the latest trends, developments and legal issues facing the private equity industry. The trainer will guide you through the common pitfalls and different contractual terms, the stages of a private equity transaction from preliminary steps to exit, impact of due diligence including management, the importance of warranties for private equity, and the important legal issues to consider when establishing and managing a private equity transaction.

By the end of the course, you will have a thorough understanding of:

• The total deal process and preliminary matters
• Legal risk management in private equity
• Key steps in a comprehensive due diligence
• Development of strategic business plan
• A holistic acquisition and investment agreement

Methodology

The interactive and practical nature of this generic course is designed to help you to remember and use what you have learnt when you confront difficult situations in the future. You will examine your own values and compare them with colleagues from other cultures.

Agenda

Day One

PRIVATE EQUITY – What it is?

• Overview
• When is private equity used?
• The parties
• How is a fund structured?
• Identification of targets
• How do PE firms get money?
• How do PE firms create value?
• How PE firms control the target company through legal documents
• How do PE firms exit?
• Internal rate of return
• Provider’s ancillary issues
• Debt funders requirements
• Management requirements

The Deal Process and Preliminary Matters including Sample Documents

• Overview
• Engaging advisers
• Engagement letters
• Limitations of liability
• Proportionality
• Heads of agreement
• Confidentiality

Principal documents and Business Plan

• Background
• Contractual structure
• Funds – Limited liability partnership agreement
• MBO – principal documents
• Acquisition - key documents
• Debt v Equity
• Loan v Debt
• Business plan

Limited Partnership Agreements and Private Equity Funds including Sample Document

• Limited liability partnerships - Purpose
• Limited Partnership Fund Structure
• Capital and Loan
• Loan Commitment
• Allocations, Sharing and Distributions of Partnership Profits
• Carried Interest
• Appointment and Removal of General partner
• Powers, Rights and Duties of the General Partner
• Powers of Limited Partner
• Withdrawal of Partners
• Fees and Expenses:
  • Management Fee
  • Establishment Costs
  • Transaction Costs
  • Fee Income of the General Partner
• Transfer of Interests – Limited Partners and General Partner
• Termination of Partnership
• Indemnification of General Partner

Day Two

Due Diligence in Private Equity Transactions

• Aims of the Investor
• Purpose - ‘caveat emptor’
• Relevance to warranty claims
• Management interest
• Limitations on Financial Recovery
• Interested Third Parties
• Social responsibility
• Conducting the Exercise

Management Due Diligence – Unique to Private Equity

• Managing expectations
• Best practice
• Deal structures
• Intelligence gathering
• Searches
• References
• Profiling management teams and chairperson
• Evaluations

Share Transfer Provisions in Equity Documents

• Equity Documents
  • Investment Agreement
  • Articles of Association
  • Service Agreements
• Lock – up and other restrictions
• Permitted transfers
• Pre – emption procedure
• Drag – along
• Tag – along provisions
• Compulsory transfer provisions
• Strip equity
• Sweet equity
• Leaver classification
• Time – based vesting
• Unfair dismissal
• Growth capital investment

Investment Agreement – including a sample agreement

• Investment Agreement

• Conditions

• Mechanics of investment

• Warranties

• Investor controls

• Issues raised by management

• Corporate governance

• Minority protection

• Syndication

• Exit

Close of Course