Private Capital Investing: The Handbook of Private Debt and Private Equity

ISBN-13: 9781119526162 / Angielski / Twarda / 2020 / 328 str.

Roberto Ippolito

Spis treści

About the Author xiAcknowledgements xiiiAbout the Companion Site xvIntroduction 1The Rise of Private Markets (Alternative Assets) in the Investors' Allocation 2The Rise of Private Markets as a Favoured Alternative Source of Company Financing 4Private Equity 6Private Debt 8Deal Phases and Book Organisation 10Chapter 1 Closed End Funds 13A Close Up on Private Equity and Private Debt Partnerships 13Cash Flows, J Curve, and Returns 16Financial Returns 19References and Further Reading 22Suggested Cases 22Chapter 2 Debt Products 23Introduction 23Definition and Some Useful Classifications 24Pure Debt Instruments 29High-yield Bonds 37Mezzanine 39Unitranche 43A Close Up on Syndicated Lending 50References and Further Reading 52Suggested Cases 52Chapter 3 Equity Products 53Introduction 53Ordinary Shares 54Preference Shares 55Convertibles 57Other Equity Instruments 64References and Further Reading 70Suggested Cases 70Chapter 4 Business Due Diligence 71Introduction 71Macro Factors 71Industry Risk Analysis 73Company Analysis 83Summary Steps for a Strategic Analysis of a Business Plan 90References and Further Reading 91Suggested Cases 91Chapter 5 Accounting Due Diligence 93Introduction 93Quality of Earnings 93Ratio Analysis 101Cash Flow Analysis 106Creative Accounting 115References and Further Reading 123Suggested Cases 123Chapter 6 Business Plan 125Introduction 125Pro-forma Financials 125Profit and Loss Projections 126Balance Sheet Projections 127Putting it all Together: Modelling Cash, Short-term Debt, Net Income, and Shareholders' Equity 128Sensitivity Analysis 128Consistency Checks 129References and Further Reading 133Suggested Cases 133Chapter 7 Valuation 135Introduction 135Fundamentals #1: Price and Value 135Fundamentals #2: Enterprise Value and Equity Value 136Fundamentals #3: Market Values vs. Book Values 140Discounted Cash Valuation Method 140Discounted Cash Valuation: WACC Approach 140Discounted Cash Flow Valuation: Adjuster Present Value Method 144Comparables Valuation Method 147References and Further Reading 156Suggested Cases 156Chapter 8 Growth Equity 157Introduction 157Differences between Venture Capital, Growth Equity, and LBO 157Instruments 159Fundamentals #1: Pre-money and Post-money Valuation 160Fundamentals #2: Capitalisation Table 165Fundamentals #3: Dilution and Equity Stake Calculation 165Fundamentals #4: Anti-dilution Provisions 167Fundamentals #5: Structuring for Exit (Ordinary Shares vs. Other Instruments) 169Fundamentals #6: Redemption 172Fundamentals #7: The Growth Capital Method (Adapted from the Venture Capital Method) 173Fundamentals #8: Calculation of the Price per Share 176Fundamentals #9: Put and Call Options 176References and Further Reading 184Suggested Cases 184Chapter 9 Leveraged Buyout 185Introduction 185LBO: Key Concepts 187LBO Analysis 199References and Further Reading 215Suggested Cases 215Chapter 10 Management of the Portfolio Companies and Exit 217Introduction 217Reporting 217Monitoring 218Value Creation 218Exit 220IPO 222Trade Sale 223Secondary/Tertiary Sale to Financial Buyers 223Other Exit Routes (Share Buyback, Options, Recap) 224References and Further Reading 225Suggested Cases 225Chapter 11 Private Debt 227Introduction 227Structuring a Credit Facility 227Sanity Checks 240Structuring a Loan Facility: A Modelling Example 246References and Further Reading 246Suggested Cases 246Chapter 12 Legal Documentation 247Introduction 247Private Debt Legal Documentation 249Private Equity Legal Documentation 256References and Further Reading 264Appendix 12.1: Example of an Equity Term Sheet 265Appendix 12.2: Example of a Debt Term Sheet 277Chapter 13 Distress Symptoms and Remedies 287Early Warning Signals 287Causes 288Restructuring Options 290Financing Solutions 291Legal Alternatives 294References and Further Reading 297Suggested Cases 298Index 299

O autorze

ROBERTO IPPOLITO is Managing Partner of a leading Italian Hybrid Capital (private equity and private debt) fund and Professor of Principal Investing at Università degli Studi Guglielmo Marconi. He has 20 years' private capital experience in sourcing, structuring and investing in all parts of the capital structure (senior debt, junior debt and private equity) of Italian SMEs across several industries and three years' management consulting experience (with a focus on business due diligence and performance improvement).Former Head of Leverage Finance at General Electric Capital Italy, Roberto has held managerial roles at European Bank for Reconstruction and Development, DAM Capital (Anschutz Group), Bain & Co. and junior positions at Goldman Sachs (Merchant and Investment Banking) and Istituto Mobiliare Italiano (Merchant Banking). He is a Fulbright scholar and a British Chevening scholar.Roberto received a MBA from the University of Chicago, a MSc in Economics from the University of Warwick and a Summa Cum Laude BSc in Business from LUISS University. He is a CFA and CPA in Italy and FSA registered in the UK.