Course dates
Private Equity Masterclass (5 Day)
Course Summary
Alternative assets (AA) have attracted in recent years a considerable amount of attention and enthusiasm for their performance, diversification effects, and growth of assets under management (AUM). Among various alternative asset classes, traditional leveraged private equity and mezzanine finance share numerous characteristics – illiquidity, longterm horizons, and potential for high levels of returns. Infrastructure private equity and real asset investment add diversification plus inflation protection. All these areas can utilise leverage in acquiring the underlying assets.
M1: Traditional Private Equity: Leveraged Transactions 24 - 25 June 2013, Singapore
M2: Real Assets Infrastructure Private Equity 26 June 2013, Singapore
M3: Mezzanine Private Equity and Growth Equity 27 - 28 June 2013, Singapore
View our 60 Second Interview with the Course Director - Andrew Regan
We took the opportunity to ask our expert Course Director a few questions on the current market challenges and how he became involved in this exciting industry. This is what he had to say.
Who Should Attend?
- Private equity professionals
- Venture capitalists
- Institutional and family office investors
- Investment bankers
- Private wealth and other investment managers
- Corporate strategic planning and development staff
- Corporate financiers
- Corporate M&A teams
- Placement specialists
- Accountants
- Lawyers
This masterclass provides delegates with a comprehensive understanding of these “illiquid” alternative asset classes, it will:
- Examine the role of traditional PE, real assets and infrastructure PE, private mezzanine financing (PMF), and growth equity
- Analyse representative transactions and assess the attractiveness of potential transactions in different transaction contexts
- Illustrate common types and identify classic sources of traditional PE, real assets, infrastructure, PMF and growth equity transactions
- Examine valuation methodologies, including forecasting and modelling
- Demonstrate how to structure and fund deals
- Demonstrate how to generate returns through opportunistic entry, improved fundamental performance, use of leverage and performance incentives, and timely exit
- Profile sources of financing for transactions of different asset classes
- Examine funds flows and asset ownership changes associated with different products
- Highlight key issues in transaction execution
Attendees will see private equity from the standpoint of both:
- The buy-side, i.e. investors with capital looking to commit it to uncorrelated, historically higher-return, but illiquid investments
- The sell-side, i.e. intermediaries assisting in the structuring and financing of private equity transactions
Methodology
The course will include the analysis of several private equity deals and leveraged buyouts, including a series of Asian transactions.
A Socratic approach, with active participation and exercises, will be used.
All Modules can be booked separately. Group discounts are available.
To register on the full 5 Day Private Equity Masterclass, please select 'Register' and follow the registration process. If you would like to register on an individual Module, please select your desired module below and follow the registration process on this product page.
Please note we cannot process multiple module registrations online. If you wish to attend more than one Module but not the whole 5-day Masterclass, then please download a PDF and either fax this back to us on +852 2866 7340 or email a scanned copy to training@euromoneyasia.com. You can also email us your registration details and one of our account managers will register your place for you.
Supporting partner:
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Supporting publications:
Day 1 - Module 1 & 2 - Traditional Private Equity: Leveraged Transactions - 10-11 December 2012
Deal sourcing and return generation
Fundamental analysis in private equity contexts and valuation
Transaction types: LBOs, MBOs, growth equity
Target screening
- Key industry
- Sector-level characteristics
- Key firm-level characteristics
Business strategy assessment
- Business mix, growth goals
- Margin targets
- Capital investment
- Agency problems
- Operating risk management
Financial performance assessment
Financial strategy assessment
- Cash generation and capital use
- Historical, target and current capital structures
- Funding modes and sources
- Financial risk management
- Does the financial strategy support the business strategy or vice-versa?
Post-closure sources of value-added
- Cost economies
- Improved working capital management
- Discipline in capital expenditure and similar outlays
- Monetisation of non-core assets and under utilised assets
Forecasts: debt capacity and future cashflows
- “Topline” revenue growth rate projections
- Forecasting margins
- Forecasting capital expenditures and other capital outlays
- Forecasting debt service burdens
- Levered equity cashflows
Return requirements and discount rates
- Target IRRs
- Other return measures
Exit strategies: “harvesting” returns
- Strategic buyers
- Financial buyers
- Public market exit
Private equity in Europe and Asia
- Strategic corporate investors
- Public market funding for highlyleveraged companies
- Private equity operations of diversified public firms
- Growth equity
Sources of value in private equity
Target valuation
- Valuation methodologies
- "Entry” pricing vs. expected “exit” value
- Net asset value (NAV)
- Price / Book value
- Enterprise value / replacement cost
- Comparable transactions
- Operational metrics
- Discounted cashflow approaches
- Debt capacity and debt / EBITDA ratios
Case studies: A potential LBO: Marks & Spencer PLC Weiqiao Textile: LBO and sumof- the-parts analysis Harbin Electric: Going private via LBO MBK Partners roll-up of Taiwanese Banks and Korean Cable TV
Day 2
Transaction structure
Debt funding
- Bank and other senior debt
- Bridge funding
- Subordinated and other long-term debt finance
- Securitisation and structured finance
Credit analysis and credit ratings
Equity-linked debt
- Mezzanine funding
- Convertible securities
Equity funding
- Private equity, LBO and venture capital managers
- Private market
Use of funds: capital structure and returns
- Debt / equity mix
- Equity-linked securities and dilution impacts: warrants with-debt, convertibles, pay-in-kind securities
Transaction process
- Due diligence, deal documentation and structuring
Exit strategies: “harvesting” returns
- Strategic buyers
- Financial buyers
- Public market exit
Risk management in private equity
Liability management
Case studies:
- Progress Power: An electricity generation roll-up
- Morgan Stanley buy-out of Chinese packager HCP Holdings
- Morgan Stanley LBO of Korean restaurant Franchiser Nolboo
- Recapitalisation of US supermarket operator Roundys
Day 3 - Module 2 - Real Assets and Infrastructure Private Equity - 12 December 2012
Introduction
Infrastructure and real asset investing vs. traditional project finance
- Established, “stabilized” assets and cashflows vs. “greenfield” projects
Infrastructure and real assets vs. traditional real estate investing
- Infrastructure as an alternative to premier Class A properties
Role of real assets and infrastructure private equity in a portfolio:
- Current returns, diversification, inflation hedge
Transaction types:
- All-equity acquisition of existing infrastructure or real assets
- Leveraged acquisition of existing infrastructure or real assets
Target screening: infrastructure assets
- Barriers to entry: “irreplaceability”
- Geographic location
- Tariff structure: freedom, predictability, enforceability in pricing of the use of asset
- Technical characteristics: physical condition, maintenance burdens, operational complexity
- Types: transportation, communication, power generation, social infrastructure
Target screening: real assets
- Supply and demand
- Geographic location
- Tariff structure: freedom, predictability, enforceability in pricing of the exploitation of the resource
- Technical characteristics: ease of extraction and transport, maintenance burdens, operational complexity, cost predictability
- Market condition
- Types: fossil fuels, metals, timberlands, agricultural land
A target investment problem: finding quality assets
- A shortage of established assets in developed economies
- Developing economies: governments as willing sellers in environments of excessive uncertainty
- The unsuitability of “greenfield” assets for infrastructure / real asset private equity
- Infrastructure: politically sensitive sectors – water, electricity, social infrastructure
- Real assets: the sensitivity of “selling the family silver”
Financial performance assessment
- Cashflow consistency: noncyclicality, tariff stability and visibility, limited technological change
Financial strategy assessment
- Incremental capital investment needs
- Cash generation and capital use
- Historical, target and current capital structures
- Funding modes and sources
Forecasts: debt capacity and future cashflows
- “Topline” revenue growth rate projections
- Forecasting margins
- Forecasting capital expenditures and other capital outlays
- Forecasting debt service burdens
- Levered equity cashflows
Return requirements and discount rates
- Target IRRs
- Other return measures
The capital structure decision: role in the portfolio
- Conservative capitalization: seeking inflation-adjusted current returns
- More aggressive capitalisation: some bias toward capital gains
Exit strategies: “harvesting” returns
- Strategic buyers: a shortage of them in infrastructure assets
- Financial buyers: other infrastructure / real asset investors, direct investment by pension funds
- Public market exit: the Macquarie Model
- Leveraged recapitalisation: episodic capital gains, with some current return
- No exit: “buy-and-hold” for longterm inflation-protected current returns
Review of target valuation in real assets and infrastructure assets
Transaction structure and funding
Debt funding
- Bank and other senior debt
- Bridge funding
- Bonded debt financing
- Subordinated and other long-term debt finance
- Securitisation and structured finance
Credit analysis and credit ratings
Equity-linked debt
Equity funding
- Publicly-traded open-end and closed-end infrastructure funds: the Macquarie Model
- Private infrastructure / real asset funds
- Direct investment by pension funds, sovereign wealth funds, and endowments
- “Strategic partner” investment by suppliers, vendors to the specific type of project / sector
Use of funds: capital structure and returns
- Debt capacity
- Leveraged vs. unleveraged structures
- Equity-linked securities and dilution impacts: warrants with-debt, convertibles, pay-in-kind securities
Transaction process
- Due diligence, deal documentation and structuring highlight for real assets and infrastructure assets
Sources of returns / manager valueadded in real assets / infrastructure private equity
- Timely entry
- Financial: aggressive substitution of debt for equity, with careful cashflow management, especially disciplined in cost control and capital expenditure
- Operational: post-closure performance improvement due to enhanced managerial resources, more highly-motivated management and workers
- Strategic: well-situated, “irreplaceable” assets with tariff autonomy in infrastructure, and scarce resources with consistent, price-insensitive demand in real assets
- Timely exit
Public infrastructure / real asset managers: the Macquarie Model
Private real asset / infrastructure managers: organisational structures and associated funds flows
- General vs. limited partners
- Legal: specified life, withdrawal prohibitions, transfer restrictions, liability
- Capital flows: “takedown” schedules, capital calls, distributions
- Manager fees and compensation, reporting and accounting policies
Case studies:
- Morgan Stanley infrastructure partners
- Macquarie international infrastructure fund
- Australia’s Transurban spurns $4.4bn buy-out bid for Tollroad Assets
- Ontario Teachers Pension Plan buys marine container port assets
- GE / Credit Suisse infrastructure fund acquisition of London City Airport and Gatwick Airport
- Edinburgh Airport Buyout
- Ferrovial SpA
- Potential LBO of HK Telecom via PCCW
- LBO of Australian Hospitals with State Contracts
Day 4 - Module 3 - Mezzanine Private Equity and Growth Equity - 13-14 December 2012
Role in the portfolio, deal sourcing
Role of private mezzanine finance (PMF) and growth equity
PMF strategy types
- LBOs and MBOs
- Roll-ups
- Disposals, divestitures, and equity “carve-outs”
- PIK, equity-linked, and coupon instruments
Growth equity as distinguished from traditional leveraged private equity and venture capital
Growth equity strategy types
- Growth equity: minority stakes in private / public companies with some “problem”
- “Strategic” Investors: minority stakes in private / public companies which can benefit from strategic guidance
- Pre-IPO and “cornerstone” investors
- Turnaround situations: minority stakes in private / public firms
Fundamental analysis in growth equity
- Topline growth
- Profitability
- Cash use / generation
Projected sources of post-closure value-added
- Improved fundamental performance
- Improved management incentives and governance
PMF sources of returns / manager value added
- Timely entry
- Financial: modest use of leverage - really an equity solution
- Operational: post-closure performance improvement
- Strategic: transformative strategic, operational, managerial, and financial input by a very sophisticated investor
- Timely exit
Growth equity sources of returns / manager value-added
- Timely entry
- Financial: disciplined capital investment and cashflow management, but without compromising the exploitation of exciting growth prospects to the fullest, and without additional leverage
- Operational: post-closure performance improvement
- Strategic: exploitation of organic growth and growth to critical mass in a consolidating sector
- Timely exit
Case studies:
- GOME: strategic partnership with Warburg Pincus
- DLJ Merchant Banking Partners Stake in Hard Rock Hotels
Day 5
Transaction structure and funding
Transaction structure
- Sources and uses of funds
- Capital structure
- Projected method and timing of exit
- Projected IRR
Valuation in PMF
- Entry: comparable firm multiples and control premiums
- Exit valuations: comparable firm multiples
- Application of traditional convertible options-based approaches
Valuation in growth equity
- Entry: DCF analysis, comparable transactions, peer firm multiples adjusted to reflect control premiums
- Exit Valuations: comparable transaction and peer firm multiples
Due diligence
- Commercial due diligence
- Management due diligence
- Operational due diligence
- Financial / accounting due diligence
- Legal due diligence
- IT due diligence
Sources of financing
- Private convertible preferred stock and bonds
- PMF / growth equity managers: organisational structures and associated funds flows
- General vs. limited partners
- Legal: specified life, withdrawal prohibitions, transfer restrictions, liability
- Capital flows: “takedown” schedules, capital calls, “cashflow waterfalls” and distributions
- Manager fees and compensation: management fees, “transaction” fees, and carried interest
Case studies:
- Growth private equity: TPG Texas Pacific, General Atlantic Partners, and Newbridge Capital Investment in Lenovo
- MBK Partners: Turnaround investment in Japanese jeweler Takeshi Shinju
- Goldman Sachs Stakes in Korean financial institutions
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The Course Director, CFA served as an investment banker at Merrill Lynch and as a securities analyst at Donaldson, Lufkin, and Jenrette, where he counselled large institutional investors on their retail sector holdings.
In addition to these conventional sell-side duties, he was centrally engaged while at DLJ in a number of banking transactions involving retailers, including LBOs, IPOs, primary and secondary equity offerings, and private placements. He also assisted in the successful recapitalisation of a major real estate portfolio in the Silicon Valley area of California.
As an experienced training consultant, he provides pedagogical support to organisations in the theory and practice of corporate finance and asset markets In his teaching work, he develops overall curricular strategies, prepares case and other instructional materials, delivers programs in the classroom, and offers follow-up evaluation.
He has delivered programs for clients throughout North America as well as Europe, Latin America, Asia, Africa, and the Middle East.
He received his A.B. magna cum laude in Modern European History from Harvard College, his M.Sc., with Distinction, in West European Politics from the London School of Economics, and his M.B.A., with High Honors, from Harvard Business School, where he was a George F. Baker Scholar, Charles M. Williams Fellow, and Dean's Doctoral Award Winner. He holds the CFA Charter.
Courses run by this instructor
4-5 Star Hotel in Hong Kong, Hong Kong,
All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.
Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
4-5 Star Hotel in Singapore, Singapore,
All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.
Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
Course dates