After completing this course, students will understand valuation methods and deal structures for both VC and LBO investments.
Valuation methods in PE differ substantially from traditional methods used in Corporate Finance as they have to deal with higher uncertainty and risk. Hence the first part of the course will focus on this aspect. Another difference to other areas of corporate finance is that contracts between financiers and firms/entrepreneurs play a much larger role and are relevant for firm valuation. Students learn to analyse these contracts both qualitatively and quantitatively. The course also focuses on developing the student's formal modelling skills, in particular financial statement modelling.
Students will also learn about performance measurement and performance evaluation of VC and PC funds in order to make sensible investment decisions. The specific nature of Private Equity makes performance measure much more difficult than in cases of Public Equity and force students to rethink their approach to performance management. We also cover specific issues in fund raising and performance measurement and students will be exposed to the current research frontier during the course.
The course will also provide students with a first understanding of how IPOs and IPO markets work.
The course is formally structured into four modules:
- Introduction to Private Equity
- Section - Valuation, Deal Structures and Exits in Venture Capital and Buyouts
- Section - IPOs
- Section - Fund Management and Fund Performance Evaluation