Investing in Private Equity - London

2010 London, The City - Dates tba

Investing in Private Equity - 2 Day Programme

Day One

What is private equity?

• Private equity as an alternative asset class for investors, the key attributes of private equity as an investment class
• What are the aims of private equity firms?
• Who are the private equity firms and what deals have they done?
• Why has the private equity industry caused such controversy and been in the news so much?

Private equity transactions

• Basic principles of leverage transactions
• Different transaction types: Management Buyouts (MBOs); Management Buyins (MBIs); Public to Privates (P2Ps); Recapitalisations; Secondaries and Tertiaties.
• The differing objectives of business vendors, private equity firms, management and banks
• The concept of free cash flow for debt pay down
• Understanding the key drivers of the internal rate of return (IRR)

Case study: Performing a simple leveraged transaction analysis to see if a transaction would meet a target IRR.

Which businesses are suitable for leveraged transactions?

• The bank perspective: predictability and visibility of cash flows
• The private equity perspective: growth potential or an ‘angle’
• What is the life cycle of a typical leveraged transaction?
• Exit strategies

Fundamentals of credit analysis for assessing debt capacity of a leveraged transaction

• Assessing key qualitative business risks
• Country risk
• The external environment and industry-specific risk
• Company’s competitive position
• Internal company analysis
• Identifying and analysing the key cash flow drivers
• Profit, balance sheet and cash flow ratios
• Profitability, financial efficiency and credit ratios
• Using the ratios – trends, forecasts, peer comparisons

Day Two

Modelling a leveraged transaction

• Simple profit and loss and cash flow
• Debt modelling
• Rates, ratios, covenants
• Payback: amortisation vs. cash sweep
• Exit and returns analysis
• Sense check v non-financial knowledge
• Management Case, Bank Case and Sensitivities
• Modelling scenarios and the Payout case

Case study: Build a basic leveraged model from scratch

Structuring the debt package   

• Sources and Uses of funds
• Layering debt
• Senior debt tranching
• Second lien debt
• Mezzanine and other subordinated debt
• Pricing for risk
• Syndication
• Getting a leveraged transaction through a credit process

Case study: Typical loan document from an LBO deal.
 
Private equity in a private client portfolio

• Capital commitments, phased investment for private clients
• The J curve effect
• Current trends in the private client market

Latest trends in market place

• The effect of the credit crunch on private equity
• Syndication problems
• “Cov-lite” deals – a thing of the past?
• Changes to Capital Gains Tax
• Current trends in leverage multiples, pricing and structures

Mike Corless

The course director is a qualified chartered accountant who begun his career in Grant Thornton International and since 1986 worked in  Ernst & Young as a senior manager in the corporate advisory team, working on major acquisitions, disposals, IPOs and insolvency/restructuring transactions.

In 1989 he joined Threadneedle Asset Management as an analyst, becoming a fund manager specialising in income funds in 1991. In 1996 he joined Scottish Widows Investment Partnership as a director in the UK Equity team, again specialising in income funds. On becoming head of UK Equities in 1998, he introduced a new investment process incorporating cash flow based corporate valuation techniques. In 2000 he was appointed head of UK Equities when Scottish Widows was acquired by Lloyds Bank and he led the integration of the UK Equity teams.
 
In 2001 he joined HSBC Asset Management as European Head of Equity Research, managing a team of analysts in Paris and London tasked with developing a new research team and research process.In 2004 he was appointed Global Head of Equity Research, responsible for 60 global equity research analysts and 40 global credit analysts. He developed a global valuation and research process, training local analysts in Europe, the US and Asia in its use.
 
In 2006 he joined BG Consulting Group, a professional training company, as the head of investment banking and investment management managing a team of 12 trainers. His experience at BG included managing major graduate programmes for investment banking and investment management clients, training graduate to managing director level participants and advising clients on their training requirements for accountancy, corporate finance and valuation, investment management and private wealth training.
 
His clients have included HSBC, Morgan Stanley, Deutsche Bank, Citigroup, Allen & Overy, JP Morgan, Barclays Bank, Barclays Wealth, Morgan Stanley Investment Management and Schroders.

2010 London, The City

Contact us to find out about the next edition of this course

Early Bird - £1650 + VAT

Regular Price £1795 + 17.5% VAT

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DISCOUNTS

• 2 people - 5% discount, 3 people - 10% discount. Delegates have to be from the same company and register at the same time.
• If you book for 2 courses at the same time you will receive 10% off the cheaper course.

IN-HOUSE TRAINING

If you have a team of 4 or more this course can be customised and organised in-house at your convenience. Contact one of our advisors to find out more.

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