This course will equip students with a detailed understanding of the legal structures and issues arising in international private equity and venture capital. It is founded on deep academic analysis of pertinent theoretical and legal issues. It will have a pan-EU focus, but with comparative global perspectives.
Session 1: Introduction to private equity and venture capital.
This introductory session will include a critical discussion of the academic research suggesting that private equity outperforms other asset classes.
Session 2: Fund structures: the limited partnership and other international structures.
This session looks at the structures adopted, and the reasons why, with particular emphasis on the legal, tax and regulatory characteristics of limited partnerships.
Session 3: Management vehicles and the UK LLP
This session will look at the objectives in structuring the management entity for the fund, with a particular emphasis on the legal and tax characteristics of LLPs, including the UK LLP Act and recent case law.
Session 4: Private equity fund (and manager) regulation
This session looks at UK and EU regulatory initiatives, and critically evaluates the provisions of the Alternative Investment Fund Managers Directive which affect private equity funds.
Session 5: Venture capital investments
Starting from a theoretical perspective, we will analyse the terms of a typical venture capital investment into a portfolio company by reference to example documents. We will also examine various aspects of contract and company law which have particular relevance to VC structures.
Session 6: The VC deal
In this sessionthe students will discuss the key points arising from a venture capital investment case study.We will focus on key points which have a legal as well as a commercial aspect, and connect these to the theoretical discussions in Session 5.
Session 7: The leveraged buyout: corporate governance issues
This session will examine the structure of a buyout and how it differs from a VC investment. We will focus on pertinent company law rules and academic corporate governance theory.
Session 8: Financing
This session will look at the leveraged finance model, advantages of leverage, the LMA Leveraged Loan Agreement, High Yield Bonds, the Inter-creditor Agreement and 'covenant-lite' and incurrance covenants.
Session 9: Distress
Discussions on the implications of distress for the PE firm, valuation, the new money decision, the role of the inter-creditor agreement and the PE firm as the loan-to-own investor.
In this session we will analyse a suite of leveraged loan deal documentation for a typical private equity buyout. Students will be provided with a fact pattern and asked to apply the theory that they have studied in sessions 8 and 9 to the deal documentation.
Lecturer: Ms Sarah Paterson / Dr Simon Witney
Module Code: LL4CQE