Instructor: Bülent Şenver
Office: 0212 296 7116
Class: Monday 10:00 – 14:00
Description: This course aims firstly to introduce, to the students, the history and structure of the investment banking industry. In general, it analyzes the services provided by securities firms, investment banks, and mutual funds, venture capital, and leveraged buyout funds. Specifically, spreadsheet skills focusing on pro-forma statement preparation of new issues and pro-forma statements of merged firms will be provided. Project analysis tools by the investment banking and venture capital firms will be detailed. Students will be introduced to the tax implications of mergers and the due diligence requirements in assessing new issues. The course also focuses on the role of investment banking in the exiting from investments by taking the portfolio firms public throughinitial public offerings.
Learning Outcomes: Upon successful completion of the course, students will be able to;
1. Have a thorough understanding of the history and structure of the investment banking and fund management industry.
2. Have strong command on the notion of “investment” and how to identify “investeable” companies.
3. Have a basic command of legal agreements that are involved in private equity transactions, namely: Share purchase agreement and shareholders agreement.
4. Understand how financial investors create value in companies they invest in.
5. Analyze the importance of the use of venture capital and private equity as funding strategies.
Prerequisites and Co-requisites:
Restriction : BUS 328
Special Condition : BKS 101 or BUS 105 or BUS 211 or BUS 213 or CUL 310 or HM 111 or LEC 241
1. The basics of the financial calculations.
2. A basic knowledge of accounting and financial reporting
1. Finance for Executives: Managing for Value Creation, 4th Edition (Gabriel Hawawini, Claude Viallet)
2. Frederic S. Mishkin and Stanley G. Eakins, 2012, Financial Markets and Institutions, 7th Edition, Prentice Hall, USA, Chapter 22 (Investment Banks, Security Brokers and Dealers, and Venture Capital Firms) (Chapter 22 is a must read)
-Student Class Presentation: 20%
-Mid-Term Exam : 30% of the grade
– Final Exam : 50% of the grade
1st Week – Introduction – Financial markets and financing mechanisms
2nd Week – Investment banking – how it works and what it serves. Venture capital and private equity –
where do they stand?
3rd Week – On the history of investment banking and venture capital
4th Week – Investment banking, venture capital – What’s common, what’s not?
5th Week – Methods and applications for valuing investments. Spreadsheet analysis
6th Week- Methods and applications for valuing investments. Spreadsheet analysis (Cont’d)
7th Week – Midterm
8th Week – Methods and applications for valuing investments. Spreadsheet analysis (Cont’d)
9th Week – Methods and applications for valuing investments. Spreadsheet analysis (Cont’d)
10th Week – The functions and the regulation of investment banking and the services
11th Week – Comparative analysis of the functions of the investment banking, the venture
capital and the private equity. (Issues on risk and return management,
control of the financed-firm, and profit maximization goals)
12th Week – Comparative analysis of the functions of the investment banking,
the venture capital and the private equity. (Issues on risk and return
management, control of the financed-firm, and profit maximization goals) (Cont’d)
13th Week – What the leverage means for venture capital and private equity? How leverage works?
14th Week – The value creating operations of the venture capital and private equity and exit strategies
15th Week – The discussion of the exit strategies available to the venture capital and the private equity
16th Week – Final exam term
17th Week – Final exam term