The PE industry is one of the most lucrative ones.
It's also complex to understand, if you don't have the right guide.
A lot of techniques, knowledge and hands-on tips are not usually shared.
Usually, what would find would be generic courses with theoretical materials in terms of valuations or general job descriptions, not going into the details of fund operations, the job, or other elements.
That is, until this course appeared.
This is due to my experience in terms of coaching both associates and partners in PE firms, from doing performance coaching for their everyday role, to strategic persuasion and negotiation coaching for fundraising.
This course is the result of that experience.
This course is targeted, naturally, at anyone who wants to master the fundamentals of the private equity industry.
Some people - including me - love to know what they're getting in a package.
How the Private Equity industry positions itself vis-a-vis other such as Venture Capital (which it includes), Hedge Funds and Investment Banking;
What are the types of activities with a PE fund throughout the stages of sourcing, investing in and monitoring opportunities;
How PE funds actually work, from fundraising from allocators to deploying capital, as well as how operations are financed, and the provisions negotiated with investors;
The two main value drivers in PE investments (namely LBOs or leveraged buy-outs), which are financial engineering and value creation, and which each consists of;
How PE-owned companies, namely leveraged buy-out companies behave differently from public ones, in terms of their strategic focus (quarterly shareholder value focus versus "full potential"), how the business is restructured and OPEX (operational expenditures) minimised, as well as how talent is incentivized for performance;
The usual approaches to valuation (both two multiples-based approaches - trading comparables and transaction comparables, as well as the DCF - or Discounted Cash Flows - methods), as well as when each of these make sense;
How to perform a trading comparables analysis, researching a company and its key value drivers, defining the universe of comparable companies, corroborating that information, spreading their key financials, and finally determining their multiples, and a valuation range for the target company;
How to perform a transaction comparables analysis, finding transactions on companies similar to the target one, corroborating these with financial/deal information, de-biasing the price for premiums paid and/or synergies, spreading the key transaction information, determining their multiples and a valuation range for the target company;
How the DCF, of Discounted Cash Flows method works, by calculating the FCF or Free Cash Flow of the company for a stabilization period, with the goal of calculating its TV or Terminal Value. Then, normalizing that TV based on the capital structure of the company (debt/equity), using the WACC or Weighted Average Cost of Capital, and finally, using a discount factor to discount those cash flows based on the present value of money;
How the Venture Capital asset type works, using a "spray-and-pray" model for startups focused on exponential growth (J-Curve growth or "hockey stick" growth), as well as the relationship between the board member (usually a fund GP) and the startup founding team, which is frequently demoted or replaced with growth;
How Growth Capital or Growth Equity works - investing in companies that are at the intersection of late-stage VC and early-stage "traditional" Private Equity, consisting of minority stake investments in companies that just need small cash injections - low-risk and low-reward;
How Leveraged Buy-Outs work, from determining the attractiveness of an investment (robust cash flow, large asset base, operational "fat that can be trimmed"), as well as how operations are run (restructurings and divestitures to achieve "full potential" within 4-5 years, with a set of 4-5 key initiatives, and talent incentives for performance, either with actual equity or "phantom equity", as well as the monthly focus on OPEX reduction to pay off debt interest);
How Special Situations investments work, both Distressed Debt and Turnaround Capital, focusing on helping ailing companies and profiting from their recovery, and why regulatory/legal issues prevent "mainstream" expansion of these investments;
The institutional fundraising process, from fund marketing, to information providing in data rooms, to due diligence and allocation;
The context of fund marketing, including myths such as that keeping funds hidden will not attract regulator attention or will make the fund manager have "mystique" and exclusiveness, to actual regulatory roadblocks to fund marketing;
The usual fund marketing channels and materials, from simplified versions of fund offering documents, interviews/features with the fund management team and CEOs, periodic updates and others;
How to actually sell a fund to an allocator using the PPP model (performance, processes and persuasion). Focusing on performance, on the sophistication of processes (ideally, institutional-quality), but also leveraging my unique persuasion tools to better convince investors;
What type of standard and bespoke provisions investors usually request, from changes in fees (management fees, performance fees, co-investment fees, many others), to complex clauses related to investment restrictions, secondaries sales, transparency requirements, fund financing restrictions, GP commit and devotion, GP removal rights, among others;
How to negotiate provisions with allocators, from strategic tactics such as reducing allocation size or breaking up syndicated groups of investors, to "in-the-room" tactics such as Implementation Intention or empathy to disarm the other side and make them more receptive;
The role of the key players in a fund, from associates, to VPs and principals, to GPs, as well as the tasks that each performs in a fund;
The tasks at different stages of a fund's lifetime, from sourcing opportunities (first round of vetting, meeting with intermediaries, initial risk/reward projections, indicative offers) to investing (complete due diligence, deal modeling and financing, deal consideration, negotiations), to post-investment monitoring (preparing exits, supporting companies as a board member) to fund-end activities (fund extensions, fund restructurings, rushed sales including possible sponsor-to-sponsor transactions, and more);
Stage-independent activities in a fund that are always necessary, including reporting (internal and external), or helping with possible LP secondaries sales;
If you think this course is a fit and can take your knowledge of PE to the next level... it would be a pleasure to have you as a student.
The fundamentals of private equity funds, investment process, activities and more.