Introduction to private equity wiley finance pdf

Useful links to our course syllabus, calendar, and further information about our faculty and continued professional development. The course leader made everyone feel relaxed and involved. I would highly recommend. Essential Skills for the Finance Team course delegate. Support team courses. Designed for professionals who work with deal teams or support the business in other areas. These courses provide delegates with industry knowledge and essential skills to overcome challenges and build stronger relationships with clients and deal teams.

Find out more about each course using the further information button on the tiles below. To view all of our upcoming training courses click the calendar button below. Introduction to PE Level 1. More information. Mezzanine financing: This refers to investing in the debt of an organisation.

If this debt is not cleared or paid back in time, the PE investors have the opportunity to convert this debt into equity interest. Mezzanine financing has a high rate of interest, making it a lucrative option for PE investors. Real estate: Real estate refers to equity investment that specialises in purchasing real estate properties. This investment is done using several strategies, such as: Core: In this case, the investments are made in properties that provide regular cash flow.

Core plus: Investments are made in properties that involve a modicum of risk, and where improvements have to be made to the properties. Value-add: Investments are made in properties that require good amount of improvements, hence these properties have high risk. What do private equity firms do? Private equity companies usually perform several tasks in order to earn money, such as: Raise money from Limited Partners LPs such as endowments, insurance firms, wealthy individuals, and retirement and pension funds; Conduct equity research, examine, approve and close deals to acquire firms; Improve operations, reduce costs and increase managerial efficiency in their portfolio companies; Sell their portfolio companies in order to earn profits.

Why should you choose a career in private equity? In addition, you should possess skills such as: Ability to create and assess financial statements and spreadsheets; Knowledge of specific industries; Financial modelling; Business insight; Market and competitor analysis.

What are mergers and acquisitions? Step 2- Search and examine candidates: This involves searching for quality companies for takeover purposes. Step 3- Investigate the candidates: Once the target company is chosen, an in-depth analysis of the company has to be conducted, along with assessing the company valuation.

This is also known as due diligence. Step 4- Acquire the company through negotiations: Once the due diligence is complete, negotiations for a merger or acquisition begin. Step 5- Post-integration: If the above steps fall into place, there is a formal announcement of the merger or acquisition.

There are several reasons why mergers and acquisitions take place, such as: Improving company performance and increasing growth; Diversification into new products and markets; Tax considerations; Diversification of risk; Increasing market share. What are the differences between mergers and acquisitions?

Take a look at some of the differences between mergers and acquisitions: In a merger, the two firms dissolve to form a new firm, while in an acquisition the two firms do not have to be dissolved and can stay in business. A merger usually occurs between two organisations of the same stature, whereas in an acquisition, a larger company purchases and takes control over a small company.

There are a minimum of three firms involved in a merger, while there are only two in an acquisition. A merger only takes place when both organisations voluntarily agree to it. On the other hand, an acquisition can be either voluntary or involuntary in nature. There are more legal formalities in a merger than in an acquisition. What are the pros and cons of mergers and acquisitions?

But "PE" is often associated with the funds trolling for mature, revenue generating companies in need of some revitalization -- maybe even some tough choices -- in order to become worth much more. While venture capital often goes into younger companies involved in unproven, cutting-edge technologies, funds described as private equity are more attracted to established businesses. Think manufacturing, service businesses and franchise companies. How it works: Sometimes a private equity firm will buy out a company outright.

Maybe the founder will stay on to run the business -- but maybe not. Other private equity strategies include buying out the founder, cashing out existing investors, providing expansion capital or providing recapitalization for a struggling business. Private equity is also associated with the leveraged buyout, in which the fund borrows additional money to enhance its buying power -- using the assets of the acquisition target as collateral.

Upside: Is the founder becoming too crotchety? Are the original investors begging for a payday? Private equity might be the way to go. The private equity fund will also likely come in with new ideas and perhaps even new managers who might give the business a second wind. Downside: Younger companies in the early stages don't fit well into the private equity investment strategy. Also remember that a private equity fund's ultimate goal is to make the company worth more than it was before in order to produce a return for investors.

Sentimentality, the workforce, the role of the founders in the business, even the business' long-term success -- they can all be secondary to this goal.