Private equity (PE) funds are an increasingly significant participant in capital markets, serving as an institutional source of equity capital that is an alternative to the public equity markets. PE fund managers raise capital from institutional and high net worth individual investors, typically in the form of a limited partnership, with a goal of generating an internal rate of return that exceeds returns available in traditional public equity markets. PE fund managers search for opportunities to acquire businesses at an attractive valuation and execute an investment strategy to increase the value of the business. After a typical three-to-seven year investment hold period, private equity managers realize on investments via a sale to a strategic buyer (e.g. a competitor) or other private equity fund, or through a public equity offering.
This program, sponsored by Barings, is designed to help participants develop a basic understanding of how private equity managers evaluate investments. After an overview of how PE managers approach investing, program participants will be introduced to a case study consisting of a hypothetical mid-sized company being considered for acquisition. Teams will analyze and discuss the strengths, weaknesses, opportunities and threats that support an investment thesis. Based upon this strategic analysis, each working group will formulate a basic revenue and cash flow forecast. The forecast will serve as a foundation for determining an appropriate purchase price for the company that will result in a rate of return consistent with typical targets returns for private equity funds. Each group will present its analysis and recommendation and answer related questions.
This program is appropriate for any participants interested in learning more about private equity; finance coursework is not necessary. The case study teamwork will be facilitated by basic templates that will step through the analysis. And to add an element of fun, a recent graduate from Davidson who works for Barings in New York will be available to each team for a “lifeline” call for assistance!
Space is limited to 16 students – food and prizes will be provided! The session will be held both in person at the Hurt Hub@Davidson, Room 303, and on Zoom.
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