JEM161 - Private Equity

Credit: 4
Status: CFS - elective
EEI and EP - elective
ET - elective
F,FM and B - elective
Masters - all
MEF - elective
Semester - summer
Course supervisors: Ing. Tomáš Fencl CFA, MBA
Course homepage: JEM161
Description: This is the syllabus for the condense version of the course, taught in two days – the scope of the lectures however is the same as the original 13-week class (excl. team presentations).

My Mission:
The topic of private equity (and venture capital) is not only interesting, but I believe highly relevant to IES graduates. I hope you find the course useful in one (or more) of these three use cases – you learn how:
investment professionals approach PE/VC investments,
you can apply the learning to “entrepreneurship via acquisition”, and
the topics covered apply to broader corporate strategy

DAY 1:
Lecture 1: What is Private Equity (and Venture Capital)?
Some historical perspective (or what do Crusades have to do with any of this?)
How do PE/VC funds work
Lifecycle of a fund: Institutional fund raising / asset management
VC vs. PE; What is a “Family Office”, a “Search Fund”

Lecture 2: Investment strategies & opportunity screening
How do PE firms make money?
How is VC different from PE?
PE Investment strategies and Investment criteria
Auctions vs. proprietary sourcing

Lecture 3: Role of Debt
Debt capacity (how much debt can you raise?) and leverage ratios
Cost of debt (hint: not just the interest you pay)
Alternative sources of debt – an overview
Capitalization table & liquidation preference

Lecture 4: Valuation in PE/VC Context
Price vs. Value
Value to who? Stakeholders’ perspective
Overview of basic valuation techniques: pro’s and con’s
Difference between PE and VC approach to valuation

DAY 2:
Lecture 5: Acquisition Process
From the first contact to a Deal
Key parties to the table
Difference between an auction and negotiated transaction
Due diligence

Lecture 6: Acquisition Agreement
Transaction structure: What you buy (assets or shares) and how you pay (cash or shares) and how much (fixed price vs formulae)
Buying whole business vs control vs minority stake (PE vs VC)
Deal protection: Representation & Warranties and Remedies (Baskets, de minimis, caps)
Conditions precedent & Closing

Lecture 7: Monitoring & Exiting investments
Monitoring: Management vs. Board roles
Monitoring: The Good, the Bad and the Ugly
Timing the exit: determinants
Ways to exit: Trade sale, secondary LBO, IPO, Recap

DAY 3:
Panel with Industry Practitioners
Speakers to be announced
July 2020




Patria Finance