PE Secondaries Case Study

For a PE Secondaries take-home case study, here’s a structured approach based on the most helpful WSO content:

1. Understand the CIM:

   • Dive deep into the CIM (Confidential Information Memorandum). Focus on key elements like topline revenue, costs, cash flow, and growth capex. Be as granular as possible in your analysis.
   • Pay attention to recurring revenue, customer concentration, cyclicality, and other business model specifics.

2. Build a Robust Model:

   • Create a detailed financial model that includes valuation at both entry and exit points. Ensure the valuation aligns with FCF yield perspectives.
   • Consider adding tabs for bolt-on M&A or other strategic initiatives if relevant.
   • Back up all assumptions with data from comps, broker reports, or earnings calls.

3. Focus on Key Metrics:

   • Highlight metrics like IRR, MOIC, and cash-on-cash returns. These are critical in secondaries investments.
   • Evaluate the growth capex return and its impact on the topline.

4. Craft a Compelling Story:

   • Your presentation should tell a clear story. Is this a cost-cutting opportunity, a turnaround, or a growth play? Use your model to support the narrative.
   • Include a SoTP (Sum of the Parts) analysis if applicable.

5. Prepare the PowerPoint:

   • Keep it concise and professional. Focus on the investment thesis, key financials, valuation, and risks.
   • Use visuals like charts and graphs to make your points clear and impactful.

6. Practice and Review:

   • Before submission, review your work for errors and ensure your assumptions are logical and well-supported.

If you’re looking for additional resources, consider reviewing: - "An Introduction to Private Equity Secondaries" by CAIS. - "A Liquidity Cushion in Troubled Times: The PE Secondaries Market" by INSEAD Knowledge. - Landmark Capital/Ares white papers on secondaries.

Good luck with your case study!

Sources: PE Case Study 48h, Private Equity: How to Analyze a CIM Effectively?, Learning recs for secondaries