Economics of the Private Equity Industry

This course covers the in depth the private equity (PE) industry, including venture funds, buyouts, funds of funds, and other investments vehicles investing in private assets. Our viewpoint is that of an investor, whether a general partner of a management firm partnership or the limited partner investing in these funds. We concentrate on the financial and economic aspects and will take a practical yet rigorous view. Examples of issues that we will cover: How to select fund managers? How are PE funds raised? Can we predict returns of PE asset class? Is there a persistence in returns? What are the most important provisions of a limited partnership agreement? How to negotiate fund terms? What is the lifetime income of general partners? What are optimal investment strategies for PE asset allocation? How to value PE assets and funds? The course is very applied, with a lot of real-life and live cases. The course features guest speakers: VC, buyout fund, fund of funds managers, limited partners. No prior knowledge of the PE industry is needed.