Project Finance (In-House)

Introduction

• Segmentation and definition

  • private equity strategies

  • venture capital

  • growth equity

  • leverage buy out

• Market

  • size

  • growth

• Market participants

  • investors

  • funds

Fundamentals

• Closed end funds

  • partnership structures (general partner, limited partners)

  • economics (management fee, hurdle rate, carried interest)

  • cash flows and J curve

  • financial returns

• Equity products

  • ordinary shares

  • preferred shares

  • convertibles

  • other equity instruments (warrants, shareholder loans, etc)

Due Diligence

• Business due diligence

  • macro factors

  • industry analysis

    • Porter’s 5 Forces Model

    • structure of a sector

    • cyclicity and seasonality

  • company analysis

    • company positioning and strategy

    • competitor’s analysis

  • strategic analysis of a business plan

• Accounting due diligence

  • quality of earnings

  • ratio analysis

  • cash flow analysis

  • creative accounting

Business Plan

• Profit & loss

• Balance sheet

• Cash flow

Valuation

• Discounted cash flow

• Adjusted present value

• Multiples

• Modelling example

PRACTICAL WORKSHOP

Practical Session

• Modelling examples and case study

Private Equity

• Growth equity

  • differences between venture capital, growth equity and leverage buy out

  • instruments

  • key concepts

    • pre money vs post money valuation

    • capitalisation table

    • dilution and equity stake calculation

    • antidilution provisions

    • structuring for exit

    • redemption

    • the growth capital method

    • put and call options

• Leverage Buy Out

  • key concepts

    • typical LBO candidate

    • step by step construction of a LBO

    • a typical capital structure of an LBO

    • differences between LBO and recapitalisation

    • value creation in LBOs

• LBO analysis

  • back of the envelope LBO analysis

  • LBO model in a nutshell

  • returns

• Monitoring, value creation and exit overview

  • monitoring

  • value creation

  • exit

    • IPO

    • trade sale

    • secondary/tertiary sale to financial buyers

PRACTICAL WORKSHOP

Practical Session

• Modelling examples and growth equity case study

Legal Documentation

• Confidentiality agreement (or non-disclosure agreement)

• Letter of intent

• Term sheet

• Private equity legal documentation

  • constitutional documents

  • memorandum (or deed) of incorporation

  • articles of associations or by-laws

  • share purchase & investment agreement

  • investment agreement

  • the shareholders’ agreement