Course Description
Private equity investing has become a major factor in the capital markets. We study the performance, compensation, and legal structure of the general partner and its underlying funds. This includes the motivations and decision process of the limited partners, typically large institutional investors, the source of private equity capital.
Additional Requirements for Graduate Students:
Graduate students will be asked to prepare an additional model/case study which they will then present/lead a discussion for the class.
Athena Title
Private Equity
Equivalent Courses
Not open to students with credit in FINA 4420E or FINA 6420E
Undergraduate Prerequisite
(FINA 3000 or FINA 3000E or FINA 3000H) and FINA 4200
Graduate Prerequisite
FINA 7010
Semester Course Offered
Offered every year.
Grading System
A - F (Traditional)
Course Objectives
This course examines the private equity marketplace. Private equity is a major source of capital for both new ventures and established firms. Private equity is the investment of capital in the equity of private companies to fund growth or in public companies to take them private. Since its origins after World War II, the size of the private equity market has grown substantially and has become institutionalized. It is a core part of the capital markets, raising over $250 billion in 2012. The objective of this course is to provide an overview of the private equity market from the differing perspectives of private equity investors (limited partners), private equity fund sponsors (general partners), and the managers of portfolio companies by focusing on the nature of the market and the strategies employed.
Topical Outline
1. Requirements of the sources of capital that invest in funds (sovereign funds, pension funds, endowments, insurance companies, family offices, fund of funds) 2. Requirements for being a successful fund 3. The role of gatekeepers and consultants 4. The measurement of success of a fund 5. Current portfolio deal structure 6. The diminishing role of the hedge funds in private equity investments 7. The merger of private equity, hedge, and venture capital funds 8. The drastic changes in the debt market and its impact on deals today 9. International fund investing 10. What it means to work for a top-quartile fund and how to do it
Syllabus