Private equity (PE) plays an important role as an intermediary between investors and firms. Private equity funds are also an important investment alternative for institutional investors such as pension funds and sovereign wealth funds. The purpose of this class is to introduce students to private equity and provide them with practical tools that will help them understand, value and structure typical transactions in this sector.
The course will have two central themes. The first theme will introduce students to the spectrum of different types of private equity firms from institutional investors to dedicated specialist firms. The focus will be on developing a familiarity with the types of transactions considered by private equity funds, how to structure them and measure the value added to the portfolio firm. This part will take students through the stages of PE investments from finding a target, to due diligence, deal pricing and structuring, ownership, preparation for exit and exit. The second theme will address the unique challenges currently facing these funds, including measuring private equity fund performance, and how private equity funds realize their returns through distributions and exit.
The course will be applied in nature and focus on specific cases. Cases will be the main teaching tool, with lectures and guest speakers to provide economic fundamentals and institutional context. Approximately 50% of the cases will be developed internally with Smith Alumni at a large Private Equity firm who will provide funding for course development and detailed data on specific transactions in their portfolio. The Private Equity firm will also provide access to the individuals who worked on the transactions for supporting material in the form of video interviews of the main participants.