Private equity fundamentals


Training objectives

  • Understand the different types of private equity players and the role of investment managers
  • Understand the concepts of leverage and cost of capital
  • Make the legal distinction between a management company and a fund
  • Understand the different investment phases
  • Understand the different types of due-diligence
  • Understand the different methods of valuing an unlisted company
  • Understand the main shareholder clauses and their role
  • Understand how a venture capital fund works, and the relationship between LPs (limited partners) and GPs (general partners).
  • Understand and know how to interpret the different ratios used to determine the performance of a venture capital fund.

Audience and prerequisites for this training

Fund Manager 

Junior Private Equity Investment Manager 

Portfolio Manager 

Wealth Manager 

Management Assistant 

Financial Analyst 

Bank Treasurer 

Corporate Treasurer 

Financial Engineer



 2 days

Training fees

  • 1950 euros HT for 1 single participant
  • 1550 euros excluding VAT per participant for a group of 2 or 3 participants *
  • 1250 euros excluding VAT per participant for a group of more than 3 participants *


*Intra only


I- Definition, Characteristics, and the Private Equity Ecosystem

- Definition and key features of private equity

- Private equity vs. stock market

- The role and expense of raising capital: equity cost vs. debt cost

- Leverage

- Minority vs. majority ownership

- Active vs. passive involvement (hands-on vs. hands-off)


II- The Private Equity Ecosystem

- Start-ups, growth companies, established companies

- Classification of participants

- Management firm vs. fund

- FCP (Joint Investment Fund) vs. SCR (Venture Capital Company)

- LP (Limited Partners) and GP (General Partners)

- Venture capital funds

- Growth capital funds

- LBO (Leveraged Buyout) funds

- A day in the life of an investment manager



CASE STUDY: "Analysis of a French venture capital fund prospectus."


III- The Private Equity Investment Process

1. The Pre-Investment Phase:

- Business plan analysis

- Meeting the management

- Operational review

- Financial audit

- Financial package proposal

- Valuation


2. Investment Phase:

- Valuation methods

  - The multiples approach

  - Conventional financial restatements

  - Discounted cash flow approach: IRR and the selection of a discount rate

- The financial package: equity, convertible bonds, obsa (bonds with equity warrants), absa (bonds redeemable in shares)

- Shareholder agreements and key clauses


3. The Post-Investment Phase:

- Monitoring the investment

  - Shareholder meetings

  - Board meetings

- Exits strategies

  - Handling "breaks" or probabilistic thinking

  - Different exit routes: trade sale, IPO



CASE STUDY: "Examination of real-world cases: hits and misses."


IV- Performance Measurement Indicators for Venture Capital Funds

1. The Life Cycle of a Venture Capital Fund:

- J-curve

- Capital calls

- Managing cash drag


2. LP and GP Relationships:

- "Clawback" clause

- Distribution patterns

- "No fault divorce" clause


3. Compensation Structures in a Venture Capital Fund:

- Carried interests

- Management fees

- Transaction charges

- Oversight fees

- Compensation adjustment mechanisms:

  - Ratchets

  - Hurdle rates



CASE STUDY: "Calculation of carried interest."


4. Key Performance Indicators for Private Equity Funds:

- Net asset value

  - Invested capital

  - Committed capital

  - PIC (Paid-In Capital) and its multiple: PIC/committed capital

- Return on invested capital metrics

  - DPI (Distributed to Paid-In)


Unrealized gains performance metric:

- RVPI (Residual Value to Paid-In)



CASE STUDY: "Analyzing the performance indicators of a private equity fund."