Financial Modelling for Private Equity
- Start Date:
- 1. February 2021
- Finish date:
- 29. October 2020
- Code:
- PE230
- Price:
- 10794.00 GBP (VAT incl.)
- Location:
- In-House
Description
Financial Modelling for Private Equity
2-Day Executive Education Training Programme
This course is available on an in-house basis only - To have this delivered for your team, please contact us.
Pricing is from GBP8995 + VAT (where applicable) for a group of up to 8 attendees
For bigger groups or for training delivered outside London, please contact us for a quote
Programme Overview
Financial Modelling for Private Equity - This Financial Modelling & Structuring seminar will teach the mechanics of modelling and will attempt to equip participants with general framework and “cookie cutter” tools to help them perform various practical financial modelling & structuring tasks as done in most investment banks. The course is designed to make participants think about the detail of creating a financial model and learn about the different types of models used for different purposes. The course will provide a comprehensive picture on why modelling is hopeless without clear structuring and vice versa.
The programme format comprises of limited lecture material aimed at providing guidelines and useful tips, individual assignments and class discussions. Class sessions will be complemented by four individual assignments set around various modelling tasks in Excel (see outline below). Group work on assignments is neither encouraged nor discouraged – it is up to you to select the best learning method for yourself.
This programme is ideal for investment banking, Private Equity and corporate finance junior professionals, as well as those involved in financial advisory in general.
Course Director
Aleksander Grzeszczak has for the past 10 years been a senior advisor to Value Discovery Partners (VDP), a major private equity investment fund focused on emerging markets, particularly on South Eastern Europe. Alek has executed a number of acquisitions in the region and is currently responsible for restructuring of the operating companies, executing business plans, acquiring and selling assets. To read Alek's full profile, please click here.
This course is aimed at:
• Private equity professionals
• Corporate M&A teams
• Corporate managers
• Finance managers
• Bankers and corporate financiers
• Accountants
• Consultants
Key Learning Outcomes:
The course is intended to deliver a general and practical investment banking modeling skill-set that can be applied immediately in the workplace. Attendees of this 2-day course will gain an understanding of:
• How financial models are built in general
• How a fully revolving financial model is built from “scratch”
• How DCF Valuation, Leveraged Buyout (LBO) and M&A models are designed and built
Pre-Requisites: The course requires a reasonable knowledge of accounting, basics of corporate finance, and basics of excel.
Note – This programme requires you to bring your own laptop loaded with Excel spreadsheet software
Course Outline
Day 1 Topics
Introduction to financial modelling
- Establishing objectives
- Defining building blocks
- Good house keeping rules
Business Projections, Building Financial Statements, Tracing Cash Flows
- Business forecasting
- Pro forma statements
- Cash flow analysis
- Funding gap calculation
- Circularity equations:
I/S to B/S, I/S to C/F, B/S to C/F
Introduction to Operating Models
- Modelling framework
- Choices of operating models
- Examples of top – down and hybrid models
- Concluding remarks
Introduction to Financial Models
- Key principals
- Common pitfalls
- “Four boxes” of cashflow paradigm
- Comprehensive standalone financial model
- Circularity equations revisited
- Mapping cash and cashflow circularity
- Setting tasks for Individual Assignment #1
Individual Assignment #1
Financial Statements Model – “Does my balance sheet balance?”
Review of Individual Assignment #1
Discounted Cash Flow (DCF) Modelling (I)
- DCF Introduction
- Net present value & IRRs
- Inputs and computations
- Forecasting cashflows
- Calculating free cashflows
- Discount rate (WACC)
- Terminal value
- Outputs and clever tweaks
- Free cashflows to firm
- Free cashflows to equity
- A few words on Firm Value
- Pros & cons
- Setting tasks for Individual Assignment #2
Individual Assignment #2
DCF Model – “Getting mechanics right…”
Discounted Cash Flow (DCF) Modeling (II)
We review the common pitfalls related to modelling DCF.
We will go “backwards and forwards” through a fully working model.
We also discuss the issue of calculating pro formas in our modelling analysis.
DCF Pitfalls
- Levered & unlevered
- Mid-year convention
- Matching exit multiple to growth rate
- Dilution & options calculations
Review of Individual Assignment #2
Capital raising exercises
- Concept of financial pro forma-s
- Standard formats for presenting IPO and debt issuance transaction
Day 2 Topics
M&A - Structuring & Modelling Considerations for Mergers
- What are merger models for?
- Definitions of M&A
- M&A Considerations
- Generic vs. specific approach to modelling mergers
- Inputs and modelling tasks
- Merger analysis tools
- Contribution Analysis
- Sensitivity tools
- Setting tasks for Individual Assignment #3
Individual Assignment #3
Merger Model – “Do we have a deal?”
Review of Individual Assignment #3
Debt financing models
- Credit view of the world vs. equity story or “show me the money”
- What to look for when dealing with debt elements of a deal
LBO (Leveraged Buyouts) models
- Why LBOs?
- Buy out view of the world vs. public equity
- Basic inputs and modelling formats of an LBO model
- Debt capacity factors & structural issues (ex. Subordination)
- Structural enhancements (Derivative Structures; Senior Convertible; Seller Note)
- Relative value analysis
- Incorporating credit analysis into an LBO model
- Roll-over equity and a few other optical matters
- Setting tasks for Individual Assignment #4
Individual Assignment #4
LBO Model – “Half a turn cheaper and we do a deal… What?”
Review of Individual Assignment #4
Distress Models
- Framework for corporate work-out models
- Modelling examples in work-outs
Big and mighty final Q&A