Private Equity Initiative - Courses - Core Electives

CORE ELECTIVE COURSES

PRIVATE EQUITY
 Faculty
Elena Loutskina, Professor of Business Administration, Peter M. Grant II Bicentennial Foundation Chair in Business Administration and Academic Director of Richard A. Mayo Center for Asset Management
Course Description
The class covers a wide range of financial situations that arise during private equity transactions. The core objective of the class is to understand the financial engineering behind all aspects of the private (PE) equity investors’ dealmaking. We will focus on the financial decisions of three PE industry stakeholders: limited partners (LPs), private equity funds managed by general partners (GPs), and PE firms owned by GPs. We will examine the investment decisions, valuation, and structure of transactions. The focus of this class is on analytical tools and methods. We will evaluate the issues pertaining to company valuations in different settings and measurement of LPs return from investment in private equity funds. My goal in this class is to broaden your view on financial deal making and foster an appreciation of flexibility of financial contracting tools.
Course Objectives
• Explore the structure and the financial performance of the PE industry.
• Develop a framework to evaluate deals in the PE industry.
• Understand the incentive dynamic between PE industry stakeholder: limited partners, general partners, and portfolio companies.
• Evaluate how financial contracting can mitigate the conflicts of interest between different stakeholders.
• Build a toolkit of quantitative methods to evaluate fund and company performance.
• Foster appreciation of the financial engineering at different stakeholders.
• Understand the role of the PE industry in the U.S. and global economy.
What Students Say
"Darden’s PE course is legendary, and an absolute must take in our second year! The course highlights the intricacies of private markets and does an amazing job to introduce students to the core concepts and technical skills of PE finance. It was easily one of my favorite courses during my Darden experience and helped to grow my passion for this space." Kathleen Altice MBA Class of 2024
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"This course gave me a strong foundation for a career in private markets. The cases covered helped me understand a variety of situations that arise in private equity transactions, both conceptually and technically. I especially enjoyed the cases that led to discussions about the GP-LP relationship dynamics, the value of the platform, and the fund of funds model." Christie Carpenter MBA Class of 2024
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"The PE course was an eye-opening experience that exceeded all my expectations. Before taking this class, I had heard PE terms tossed around in financial discussions and seen them mentioned in articles like the Wall Street Journal. However, I never truly grasped the nuances of GP and LP roles or what went on behind the scenes. The professor and the course material provided invaluable insights, demystifying these concepts and giving me a comprehensive understanding of the dynamics between LP and GP relationships." Aanshi Jain MBA Class of 2024
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"The PE course was a great theoretical and technical introduction to the PE space. It is a “must take” for anyone interested in that ecosystem. The professor held us to a high standard of excellence, which ultimately brings out the best in students; my classmates and I were engaged, well-prepared, and eager to answer the call. Getting regular “reps” on financial modeling was also a huge value-add." Reid Spagna MBA Class of 2024
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"I can say with utmost confidence that this is one of the most insightful courses I took while at Darden. Prior to Darden, I had limited exposure to the intricacies of the private markets. Not only did the course deepen my passion for private investing, but it also bolstered my confidence in navigating the complexities of various strategies, funding requirements, contractual terms, and incentives commonly associated with private market investments." Joe Vance MBA Class of 2024
ENTREPRENEURSHIP THROUGH ACQUISITION
Faculty
Les Alexander, John Glynn Endowed Professor and Professor of Practice in Business Administration
Course Description
Entrepreneurship Through Acquisition (ETA) is a growing career path for MBA graduates and experienced individuals looking to become the CEO of their own company by purchasing an existing business using third-party capital. This course provides students with an introduction to the process of searching for a company, valuing a small business, structuring a deal, negotiating with a seller, completing due diligence, obtaining debt and equity financing, and closing the transaction to become the CEO of their own business. We will review the differences between a funded and a self-funded search, practice how to assess positive characteristics and risks of a company and learn how to utilize various forms of financing to purchase a small business. Through case and other readings, classroom discussions, and conversations with guest speakers who are current or former searchers, or are professionals engaged in the industry, students will explore the many aspects of searching for and acquiring a company. The final project will allow students to prepare a presentation for investors outlining the elements necessary to purchase of a business.
Course Objectives
• Articulate what a search fund is and the entrepreneurship through acquisition model.
• Describe the differences between a funded search and a self-funded search.
• Explain the steps in the process for acquiring a small private business.
• Understand the importance of developing an investment thesis and search criteria used to evaluate target opportunities and communicate with investors and brokers.
• Appreciate what makes an attractive acquisition opportunity and what does not.
• Comprehend the importance of conducting due diligence and identifying risk.
• Gain insight into deal structuring
• Learn about valuing a small private business and how to develop an acquisition model.
• Explore how to structure the purchase of a small business using SBA debt, bank debt, seller debt, preferred equity, common equity, and rollover equity.
• Develop a presentation for potential equity investors to be used to raise capital for an acquisition.
ACQUISITION OF CLOSELY HELD ENTERPRISES
Faculty
Hunter Reichert, Adjunct Lecturer
Course Description
This course focuses on the process of acquisition of a business entity. Students will be shown the tools they need and the process to follow to successfully acquire a business of their own. Among the major topics covered will be the search process, assessing and valuing the business, financing consideration, negotiating, and closing the deal. The course may be of interest to those MBA students who are interested in leveraged buyouts, investment banking, venture capital, and other related careers.
Course Objectives
• Guide students through the process that leads to successful acquisition of a business
• Provide students with the skills and information they need to search, value, and acquire their own business
APPLIED SECURITY ANALYSIS
Faculty
Joe Andrasko, Professor of Practice
Course Description
This course focuses on framing and evaluating investment decisions, assessing the quality and long-term earnings power of businesses, and valuing companies using current, real-world data. The course is broadly divided into three modules: 1) an introduction to the investment decision process and mental models; 2) a deep dive into our "Compounders" investment framework; and 3) an exploration of behavioral elements of the investment decision process (biases, subjective judgment, and evaluating management). The course integrates key ideas from First Year finance, decision analysis, and strategy and should appeal to students seeking to gain practical experience for future careers in private equity, venture capital, public equity investing, and financial services as well as general managers who expect to participate in the capital allocation process.
Throughout the quarter, we will be joined by senior investment professionals from leading hedge funds, private equity funds, and venture capital firms who will share practical insights from their own investment experience. The course is co-instructed by a hedge fund executive and Daden alumn.
Course Objectives
• Develop a catalogue of mental models to improve investment decision making
• Gain experience assessing, articulating, and challenging investment merits
• Apply the investor toolkit in a practical / experiential setting
TACTICAL TOPICS FOR ENTREPRENEURSHIP THROUGH ACQUISITION
Faculty
Randolph (Randy) Seibert, Adjunct Lecturer
Course Description
This course provides students with exposure to practical matters faced by operators of smaller enterprises. Whether starting or acquiring a small enterprise, entrepreneurs will be better prepared having been introduced to real-world topics such as relationships with key service vendors (banking, legal, accounting), commercial leasing terms, employee benefit programs, state and local public policy, government procurement, commercial insurance, commercial security interests, credit policies, and financial and operational control systems– from the vantage of the smaller enterprise where choices are often limited as compared to the options available to larger enterprises.
Course Objectives
Expose the students to concepts relevant to the small and closely-held business context. Concepts include:
• Personal entrepreneurial assessment
• Entrepreneurship through acquisition
• Linkage between business goals and those of owner-managers
• Small-enterprise regulatory and government affairs
• Awareness and compliance of labor laws and regulations
• Evaluating an acquisition turnaround opportunity
• Financing challenges
• Competing with large enterprises
• Business partners
• Real estate leases
• Family business topics
• Working with an attorney
• Franchising terms
• Hands-on work, often difficult
• Contributing to the community, B-Corps
• Vendor selection