Private equity is a relevant source of capital for companies. This course explores the “private equity cycle”: (i) fundraising and structure, (ii) investing and (iii) exit. As valuation plays a crucial role in this cycle, the course starts with valuation techniques: from traditional methods as DCF to more recent methodologies as real options. Strong emphasis is given to practical applications: a DCF model for a "target" company will be developed in-class and a real world case of Private Equity transaction will be exposed.
The aim of this module is that when completed students have: (1) Autonomy and critical sense in the use of studied valuation techniques. A special emphasis will be given for the use of those techniques in the Private Equity investment process; (2) Clear understanding of the theoretical and conceptual tools used in private equity deals namely in its valuation dimension, term sheets creation, the process of deal structuring, harvesting value through IPO, M&A, MBO and other exit strategies. Overall, it is expected that students understand well the private equity investment cycle and, especially, the valuation exercise contribute throughout that cycle.