Objective

This is an intensified course in corporate finance, that in particular focuses on the latest developments in private equity and venture capital markets. The course is intended for students in their final year, who want to specialize in private equity and venture capital. Teams of 4 students work on assignments and write essays. During the course these teams will present the results of their essays. 

Important aspects of the course are:

• Corporate Assignment Projects
  Corporate projects and cases are an important component of the intensive course. Within a few broad guidelines, a broad range of final projects are encouraged. For instance traditional papers analyzing trends in private equity markets to case studies of recent developments in the Dutch markets. Group projects, or projects linked to those in other courses, will be encouraged.
   
• Guest speakers
  Lectures by corporate executives will be an integral part of the intensive course. The courses will be given in close cooperation with people and organizations that are active in the private equity market (e.g., acquisitions done by HAL Investments). Guest speakers and corporate visits of the students provide an opportunity to become better acquainted with the private equity market in Netherlands.

Content

The course Corporate Finance: Private Equity and Venture Capital is structured in three modules. In the first module we consider the investing process, in the second module we examine the financing of acquisitions, while the third module examines the exit process of the investment. 

A brief summary of the modules in the course is as follows:

The first module 'Investing' considers the interactions between private equity investors and the acquisitions that they finance. It considers the traditional valuation methods for targets and dynamic valuation models for firms (such as real option and game theory). We will illustrate these techniques with examples from a wide variety of industries, ranging from private equity acquisitions, to build-ups and valuation of high-tech target firms.

The second module 'Leverage' examines the capital structure of private equity acquisitions. The financial leverage has a profound effect on the behavior of both entrepreneurs and investors. We identify and analyze the critical factors that affect the financing decision (for instance, in going private transactions or leveraged buy-outs).

The third module 'Exit' examines the process through which private equity investors exit their investments, for instance, with an initial public offering (IPO) or in the case of a takeover. Successful exits are critical to insure attractive returns for investors and, in turn, to raise additional capital. This module will support the financial framework with empirical tests to measure the performance of both acquisitions and IPO’s.

Required Literature

To be announced

					29-1-2002