Private Equity

Featuring: How to use private equity to finance a company Company valuation from the perspective of the private equity fund Investment process of a private equity fund Due diligence and documentation Advanced investment structures and their application MBOs and MBIs Managing the private equity portfolio Strategic investors and emerging markets This three day course has been designed to provide the participants with a complete overview of the private equity industry and its workings. It is intended that participants will gain a thorough understanding of the role and operations of a private equity fund and the complex financial engineering methods it uses. The course will emphasize the practical aspects through real – life case studies, workshop sessions and negotiation simulations. In order to gain the full benefit of the course, participants should be numerate and be familiar with the basic elements of corporate finance, such as company valuation and financial forecasting. Basic understanding of the different types of financial instruments such as equities, bonds, debt, etc is useful. Good English language skills are required. Who should attend? This programme will be of interest to company executives involved in business development and acquisition work and professionals at all levels of seniority who wish to gain insight into private equity, such as: Commercial & Investment Bankers Company & Financial Analysts Management Consultants Directors of Finance Corporate Finance Professionals Private Equity Professionals Venture Capitalists Accountants Lawyers
Day 1 Introduction to the private equity industry History Characteristics and objectives of private equity investors The use of private equity as a form of financing for companies Main market players US vs. European private equity Review of valuation fundamentals DCF valuation Equity based valuation Peer group analysis Asset and option based valuations Valuation from the perspective of the private equity fund “Pre-money” valuation and its relation with other methods Exit valuation and criteria IRR based valuation Case study: Delegates will value a company using different valuation techniques highlighting the valuation approach of the private equity fund and contrasting it to the other approaches Day 2 Organisation of a private equity fund Types of investors and their sometimes different objectives Fund managers’ required skills and track record How a private equity fund approaches potential investee companies Investment process of a private equity fund Target sectors for investment What kind of management does a private equity fund look for? Exit strategy: reconciling the objectives of private equity fund, other shareholders and management Basic investment structures of a private equity fund Shareholding structures Equity instruments Debt instruments: bonds, convertibles Hybrid instruments: warrants, options Board of directors representation Protection mechanisms: veto and other rights Due diligence and documentation Business due diligence Legal & financial due diligence Managing the costs The Term Sheet The other key agreements: sale and purchase agreement, shareholders agreement, debt agreements Emerging market issues Differences in information, management and legal environment How a private equity fund can deal with these issues Case study: Delegates will form negotiating teams and divide into private equity investors and sellers. The teams will value the potential investee company, negotiate a deal and agree a Term Sheet outlining the basic structure of the deal. Day 3 Advanced investment structures and their application Different ranks of equity Mezzanine finance and subordinated debt Options, warrants and convertibles MBOs and MBIs Buyins and buyouts Main players and their different interests Structuring a transaction Emerging market MBOs Case study: Delegates will negotiate a more complex MBI transaction, by forming three teams per negotiation. They will value a company, agree between sellers, private equity investor and management to produce a more complex Term Sheet. Managing the private equity portfolio Degree of private equity involvement in management What can a private equity bring apart from capital? Reporting on an investee company to fund investors Dealing with companies in difficulty Strategic investors The main exit route for private equity funds in emerging markets Co-investment and its problems How to maximise value on exit Post investment monitoring and value enhancement Goal setting Reporting Action plans Value enhancement Course summary and close