Minority investment IRR
Hi guys, assuming a PE fund will invest minority stake in a listed firm. How do I do the return/IRR analysis? appreciate any insight.
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What does it come in at and what does it go out at...
Gets a little harder with public companies because of market dynamics, but just control for those variables and look at it in the same way you would build a follow-on model driven by a comps analysis or DCF for a majority stake
Watch for items like dilution due to SBC and other convertible items, warrants, options, RSUs, PSUs etc. but its still just building an operating model and valuing the company then assuming you are able to sell % of x that you own (in its simple form)
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