The IFF School of Private Equity

Modern investment theory is moving steadily towards more balanced, diversified portfolios as pioneered by David Swensen and the Yale Model.  Private equity has an important role to play as one of the key asset classes to which every investor will require significant exposure.  This five-day residential course will dispel many of the prejudices and misconceptions to which this much misunderstood asset class is subject.  It will also present a balanced account of the objections currently being raised against private equity in the media.

Already the programme of choice for many organisations around the world. The IFF School of Private Equity raised the bar in private equity training. Focusing on the practical aspects of private equity, this really is the only course of its kind that is designed with practitioners in mind.

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Day 1

Private equity within a modern investment portfolio

• Multi-asset class investing
• Absolute returns
• Correlation
• Liquidity
• The Yale Model

Changing views of risk

• The risk premium
• Markowitz and CAPM
• Volatility
• Uncertainty
• Subjective risk
• Material risk
• Towards a new view of risk

What is private equity?

• Distinguished from quoted equities
• Buyout and venture
• Secondaries
• Mezzanine
• Infrastructure
• PIPEs

How does private equity work?

• Investors (LPs) and Managers (GPs)
• Limited partnerships
• Quoted vehicles
• VCTs
• Primary and secondary markets
• Fund economics: fees and carried interest

How do private equity returns work (1)?

• Difference between compound and vintage year returns
• Calculating an IRR
• Understanding the J-curve
• Cashflows
• The investment / divestment cycle

How does private equity stack up?

• Performance versus other asset classes
• Correlation
• Long-term versus short-term
   

Day 2

How do private equity returns work (2)?

• Distinguish between allocated, committed, drawn down and invested capital
• Refer back to fund economics to consider the implications of these differences
• Measurement techniques
• Money multiples and their uses
• Money weighted returns
• Time weighted returns
• Annual returns

What is buyout?

• Sub-classes
• Sector
• Development capital
• Debt
• Earnings
• Size
• Control

Buyout returns in theory (1)

• How buyouts create value
• Earnings and how to define them
• Earnings growth
• Multiple increase in a perfect market
• Multiple increase in an imperfect market
• Leverage

Buyout returns in theory (2)

• Recapitalisation
• Timing
• Modelling and analysis
• Deal sourcing
• Exclusivity status
• Lead investor
• Partner attribution
• Quoted comparables
• An ear to the ground

Buyout returns in practice

• US and European returns compared and analysed
• Impact of mega fund capital
• Structural change in the market
• Influence of quoted markets
• Expectations for the future
   

Day 3

Class discussion session

• How do we think buyout funds make money?
• What are the limitations on buyout returns?
• How might these play out in the future?
• What may the impact of mega-funds mean for patterns of equity ownership?
• Is the funding of the equity cycle infinitely renewable?

What is venture capital (1)?

• Applications, not inventions
• How has sector coverage changed?
• Life science
• IT
• Telecoms
• Stage

What is venture capital (2)?

• The US model
• Home run mentality
• Value add
• The traditional European approach
• The US model comes to Europe

Venture returns in theory

• Money multiples
• Valuations
• Cost and value
• IRRs and multiples
• Going in equity
• GIE as % of fund holding
• The impact of home runs
• Some thoughts on European returns

Venture returns in practice

• US out-performance versus Europe
• Just what happened in the mid-nineties?
• Multiples drive IRRs
• The Golden Circle
• Market conditions
• Europe – why the figures don’t tell the whole story
• Returns by fund size
• Returns by stage
• Expectations for future returns
   

Day 4

The partnership fundraising process

• The fund cycle
• The investment cycle
• The fund and portfolio models
• Pre-marketing
• The offering memorandum
• The presentation
• The offering meeting
• LP process
• Commitments

The LP process (1)

• Decision making in general
• Managing dealflow
• Managing expectations
• Need for process
• Preliminary review
• Dealing with serious candidates
• Due diligence
• Negotiating terms

Fund terms

• Duration
• Structure
• Management fees
• Start-up fees – what is included
• Carry – deal by deal, full payback, etc.
• Recycling
• Key man
• No fault divorce
• Limitations on transfer

The LP process (2)

• Planning a fund programme
• Geography
• Sector
• Time
• Legal / practical limitations
• Allocated capital
• Committed capital
• Drawndown capital
• Capital cycles and cashflow planning
• What to do with uninvested capital

The LP process (3)

• Monitoring
• Analysis
• Advisory boards
• Secondaries
• Co-investment
• Anticipating the next fundraising
   

Day 5

The venture funding process (1)

• Deciding on the preferred funding method
• Angels
• Professional venture capital firms: stage sector, value add
• What is the story?
• Being realistic about the capital structure
• What v/c firms will be looking for
• Covenants
• Liquidation preferences
• Negative control

The Other Alternative Assets – Real Estate, Commodities and Private equity

• The commodity indexes and enhanced indexing
• Direct investments - private equity and real estate
• Real estate investment funds and reits
• Hedged and active commodities exposure

The venture funding process (2)

• Being realistic about executive staffing
• The presentation
• The pitch
• Negotiating terms
• Working together
• The traditional venture model– can the v/c perform?
• Exit discussions
• What to do when it goes wrong

The secondary market

• How it works
• Size
• Reasons for use
• Return expectations

The private equity “debate” (1)

• What exactly are the issues?
• Socio-economic considerations
• Transparency
• Responsibility
• The future?
• Club deals and anti-competitive tendencies:
  (a) company level
  (b) fund level

The case for private equity (2)

• Regulation
• Publicity
• Short-term versus long-term considerations
• Creation of companies and jobs
• Venture capital’s economic impact
• Individual enrichment:
  (a) Practitioners
  (b) entrepreneurs
• Individual enrichment and responsibility: directors
• A force for free markets – breaking down old
• cultural attitudes

Why this event is unmissable:

• The only 5-day course of its kind that is dedicated to applications not just theory
• You will learn from Guy Fraser-Sampson, one of the world’s leading private equity experts
• The programme covers all aspects of private equity from both an LP/LG (fund level) and GP/entrepreneur (company level) perspective
• You will benefit from highly practical guidance on practical matters such as fundraising and planning an investment portfolio
• The use of extensive real-world practical examples and group case studies will provide you with state-of-the-art knowledge in the private equity sector
• You will gain a unique insight into how private equity fits into modern investment portfolios and its role in multiasset class investing
• You will receive a free signed copy of Guy Fraser-Sampson’s top selling book - Private Equity as an Asset Class