Portfolio Management and Asset Allocation in PE and VC 2024

Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

Portfolio Management and Asset Allocation in PE and VC

January 2024

MAIN INDIVIDUAL ASSESSMENT:

The students are required to prepare the main body of a PE investment strategy. They will select 5 companies on the London Stock Exchange they wish to take private via a Public to Private offering. They will explain why they selected these companies and how they fit together in their fund. They will then explain how they value these companies and why they think they can do better with them. They will show the risk management strategy chosen for this combination of companies. They will take one company and describe how they will add value over the next 5 years of ownership. They will then explain the most likely exit strategy for this company and how they approach this.

- Executive Summary;

-     Fund outline: Please detail here how large the fund is, what structure it takes and how much money you will invest, keep in reserve for further development.

- Investment Thesis: Explain what the thesis is behind the portfolio. Here you go into the details of sector, size, geography considerations. You explain why this sector or size of company makes sense and how you think you can be a better owner of these companies than the public markets.

- The five selected companies: Here you set out the five public companies you have selected and why these are your choice. You describe their historic returns, risk and Beta and how their risk profile looks.

- Risk management approach and Portfolio structuring strategy; You explain based on the previous section how you ensure your portfolio is structured with respect to the risk factors of the companies you have selected. How do you make sure the portfolio as a whole does not run into trouble as all companies have the same risk exposure. It is important that you go into the details here of the capital structure applied to the companies you acquire. You have used the equity of the fund and will use debt of the credit markets to come to a total investment into these companies. Make sure your leverage ratios are explained and how they do not breach in the event of rough trading times. One of the things you should consider are downside scenarious. How much in terms of volume and price drops can your companies sustain before they run into financial issues.

- Adding  value  to  the  preferred  company;  One  company you  should select and analyse more deeply to find out what you can do to increase its value. Please use your knowledge of the company and the sector and come up with strategies to make them more valuable.

- Exit chosen for the company; At the end of the life of the fund you need to sell the companies. Who is the natural buyer, how does the sale process run, what do you need to do.

Submission Format: The Submission Format is a slide presentation in PDF clearly stating the name of the student. If additional information is required, students are allowed to add appendix slides to the slide deck and provide further context to the presentation materials.

Submission Deadline: The submission deadline is 3rd May 2024

Marks: 60% of the marks are awarded to this assignment which are split equally between  quality of the presented content (30%), completeness of the presented content with respect  to the required sections as detailed above (20%); formatting, structure and presentation (10%).