Private Equity - JEM336
Title: Private Equity
Czech title: Private Equity
Guaranteed by: Institute of Economic Studies (23-IES)
Faculty: Faculty of Social Sciences
Actual: from 2024
Semester: winter
E-Credits: 3
Examination process: winter s.:
Hours per week, examination: winter s.:1/1, C [HT]
Capacity: 97 / unknown (unknown)
Min. number of students: unlimited
4EU+: no
Virtual mobility / capacity: no
State of the course: taught
Language: English
Teaching methods: full-time
Note: course can be enrolled in outside the study plan
enabled for web enrollment
priority enrollment if the course is part of the study plan
Guarantor: Ing. Tomáš Fencl, MBA
Teacher(s): Ing. Tomáš Fencl, MBA
Attila Sarkany
Class: Courses for incoming students
Incompatibility : JEM161
Is incompatible with: JEM161
Examination dates   WS schedule   Noticeboard   
Annotation - Czech
The objective of the course is to provide both a conceptual framework of and practical insights into private equity investing. The course design follows the logic of a typical deal going from preparation to execution to exit, looking from both strategic and operational level. Each block comprises topical seminars complemented by guest talk by and discussion with experienced professionals in a given area of focus.

The timing: January 20 - 21, 2025. room 314, 9:30-12:30 + 14-15:30 h. Registration into this compact course will be open until the first day of the course.
Last update: Schnellerová Dagmar, Ing. (07.01.2025)
Aim of the course -

The course’s objective is to provide an introduction to the private equity investment process and its analytical framework. Theoretical concepts are explained using real-life examples and actual market data. Industry practitioners are invited to present guest lectures and participate in Q&A.

Last update: Schnellerová Dagmar, Ing. (21.03.2024)
Literature -

 

Mandatory literature:

  • GADIESH, O. Lessons from Private Equity Any Company Can Use, první vydání, Harvard Business School Press, 2008, ISBN: 1422124959.
  • WASSERSTEIN, B. Big Deal: Mergers and Acquisitions in the Digital Age, první vydání, Warner Business Books, 2000, ISBN: 0446675210.
  • PitchBook 2018.
  • SCHUMER, Ch. E. 2019.

Additional suggested literature:

  • BRUNER, R.F. Applied Mergers and Acquisitions, první vydání, Wiley, 2004, ISBN: 0471395056.

  • BURROUGH, B., HELYAR, J. Barbarians at the Gate: The Fall of RJR Nabisco, dotisk prvního vydání, Harper, 2008, ISBN: 0061655546.
  • CAREY, D., MORRIS, J.E. King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone, první vydání, Crown, 2010, ISBN: 0307452999.
  • CENDROWSKI, H., et al. Private Equity: History, Governance, and Operations druhé vydání, Wiley 2012, ISBN: 1118138503.
  • FINKEL, R., GREISING, D. The Masters of Private Equity and Venture Capital: Management Lessons from the Pioneers of Private Investing, první vydání, McGraw-Hill, 2009, ISBN: 0071624600.
  • FREUND, J.C. Anatomy of a Merger: Strategies and Techniques for Negotiating Corporate Acquisitions, první vydání, Law Journal Press, 1975, ISBN: 1588520005.
  • LERNER, J. Venture Capital & Private Equity, A Case book páte vydání, Wiley, 2012, ISBN: 0470650915.
  • LEWIS, A. The Churning Bed, The Wall Street Journal, September 29, 2012.
Last update: Schnellerová Dagmar, Ing. (21.03.2024)
Requirements to the exam -

Your presence at the panel discussion with distinguished guests is mandatory.

You should deliver a brief self-introduction before the course starts. You will be asked to attach a new slide to a presentation where all participants present themselves - more detailes will be provided later.

You can gain activity points during the sessions.

Once you actively participate in a discussion, claim the activity points to the Teaching Assistant.

GRADING:
Total = 100 points
Final Exam = 90 points
Panel Discussion Attendance (i. e., being logged in the confcall for the whole time) = MANDATORY (+10 points)
Timely delivery of self-introduction = MANDATORY
A = 91+, B = 81-90, C = 71-80, D = 61-70, E = 51-60, F = 0-50


FINAL EXAM:
- 90 minutes
- presentation-related questions = 50 points
- case study (incl. calculation) = 20 points
- reading comprehension (based on assigned papers) = 20 points

Last update: Geršl Adam, doc. PhDr., Ph.D. (09.10.2024)
Syllabus -

This compact course will be taught face to face during two days in Januar/February 2025 (precise timing and room will be announced soon). The final test will be organized in an online form after the course.  

Three use cases 

  1. Learn how investment professionals approach PE/VC investments, 

  2. You can apply the learnings to “entrepreneurship via acquisition”, and 

  3. The topics covered apply to broader corporate strategy

Lecture 1: What is Private Equity (and Venture Capital)?

  • Some historical perspective (or what do Crusades have to do with any of this?) 

  • How do PE/VC funds work

  • Lifecycle of a fund: Institutional fundraising / asset management 

  • VC vs. PE; What is a “Family Office”, a “Search Fund”   

Lecture 2: Investment strategies & opportunity screening 

  • How do PE firms make money?

  • How is VC different from PE?

  • PE Investment strategies and Investment criteria

  • Auctions vs. proprietary sourcing

Lecture 3: Role of Debt

  • Debt capacity (how much debt can you raise?) and leverage ratios 

  • Cost of debt (hint: not just the interest you pay)

  • Alternative sources of debt – an overview

  • Capitalization table & liquidation preference

Lecture 4: Valuation in PE/VC Context

  • Price vs. Value

  • Value to who? Stakeholders’ perspective 

  • Overview of basic valuation techniques: pro’s and con’s

  • Difference between PE and VC approach to valuation

 Lecture 5: Acquisition Process

  • From the first contact to a Deal

  • Key parties to the table

  • Difference between an auction and negotiated transaction

  • Due diligence

 Lecture 6: Acquisition Agreement

  • Transaction structure: What do you buy (assets or shares) and how do you pay (cash or shares) and how much (fixed price vs formulae)

  • Buying whole business vs control vs minority stake (PE vs VC)

  • Deal protection: Representation & Warranties and Remedies (Baskets, de minimis, caps)

  • Conditions precedent & Closing

 Lecture 7: Monitoring & Exiting investments

  • Monitoring: Management vs. Board roles

  • Monitoring: The Good, the Bad and the Ugly

  • Timing the exit: determinants 

  • Ways to exit: Trade sale, secondary LBO, IPO, Recap 

Panel with Industry Practitioners 

  • Speakers to be announced

Last update: Geršl Adam, doc. PhDr., Ph.D. (09.10.2024)