Overview of Investment Funds in Africa and Other Emerging Markets
In this module, we will focus on the growth path of a typical privately-owned company and describe the different sources of funding a company might acquire as it grows and prospers. The benefits of private capital funds and other types of funds are also covered. Emerging markets is defined and the latest trends in private equity in Africa and other emerging markets are explored by visualising the latest data.
The Impact of Private Capital on Economic Development and SDGs
In this module, we will focus on private capital as a powerful force for development. We will explore private capital’s role in delivering the Sustainable Development Goals (SDGs) and discover how the SDGs can be implemented in a private capital fund.
The value of digital innovations in transformation will be discussed along with the development impact of venture capital investments.
Business Model of Private Capital Funds
In this module, we examine the business model of private capital funds. We start by looking at what investing in private capital in emerging markets looks like.
We then clarify the role of the fund manager and examine key characteristics of the private capital fund model. We explore venture capital ecosystems and conclude by contrasting the benefits and constraints of private capital.
Private Capital Funds Structures
This module investigates common fund structures and the constitutive bodies that govern the terms of a fund. The limited partnership structure is detailed to demonstrate the roles of the general partner and the limited partner. Common fund terms are covered and their provisions to provide insight into how funds may be structured based on stakeholder agreements
Components of Successful Funds
In this module, we will be examining the components of successful funds. We will discover what investors look for in a fund design and explore the Coherence Triangle.
We will then learn about the defining factors and key success factors for private capital funds. Returns strategy options will be explored along with the key drivers and sources of returns.
We will conclude by analysing investor red flags when considering an investment in a fund.
Fund Manager Compensation: Alignment and Incentives
In this module, we will explore alignment and incentives in private equity funds. We will start by discussing the need for alignment and incentives, including its role in principal-agent relationships. We will then analyse the key pillars of alignment and incentives – personal and team motivation, GP commitment, carried interest, management fees and remuneration.
We will describe additional considerations that help build alignment and end by discussing how GP commitment, carried interest and management fees could evolve.
Due Diligence of Funds
In this module we will learn about the due diligence of funds, starting with explaining the need for due diligence. We will then explore the key elements and processes involved in performing due diligence.
We will highlight some red flags to look out for when doing due diligence on funds and conclude by providing useful due diligence tools.
Operational Due Diligence
In this module, we will focus on the operational due diligence process of private capital investment funds.
We will begin by exploring the basic structure and relevant parties associated with investment funds. Then, we will explore the governance of the general partner who is responsible for the management of the fund. We will discuss best practice in terms of the compliance function of a private equity fund. We will address operational aspects such as finance, auditing, and reporting.
Finally, we will consider important administrative functions and controls that ensure the fund’s compliance.
Fund Governance
In this module, we will focus on the governing bodies who oversee the governance of a fund. We will investigate the relationships between each of these governing bodies and study their respective roles and responsibilities.
We will investigate a case study to apply our decision-making based on good fund governance practice.
Asset Allocation (Investors Perspective)
This module will provide an overview for global limited partners to understand portfolio construction and asset allocation. We will engage in content pertaining to diversification and private capital, including the ways to invest in private capital.
Lastly, we will discuss how to establish a portfolio construction strategy.
Human Capital Development: Team Dynamics
When investing in companies, we need to first invest in human capital. In other words, we need to invest in the skills, knowledge, and experience possessed by an individual and a team. This course explores how to navigate this and assure you have invested well in your team. Guided by your facilitator, Hany Assaad, you will gain both practical and theoretical insights into all areas of human capital development including fund management, fund management teams, being a value manager, and being a risk manager.
Fund Manager and Team Selection
In this module, we will be exploring how to choose a successful fund management firm and team.
We will start by discussing the expectations that investors have of fund managers and define characteristics of successful fund managers. We will then examine characteristics of a winning fund management team, including factors to look out for in a team’s
track record.
We will conclude the module by analysing an example of the Africa MidCap team and see how we could apply lessons from this example in real life.
Sourcing and Investment Process
In this module we will discuss how to source, filter, and select good investment deals by understanding the investment pipeline funnel. We will learn to identify different seller motivations to improve our selection capabilities and detail the investment process to prospective investors.
Structuring Private Capital Transactions
In this module, we will be exploring how to screen, structure a deal and discuss the various exit options. Risk and return profiles as well as common investment instruments will be covered.
Due Diligence of Companies
In this module we will explore the purpose of company due diligence and discuss due diligence of companies in detail. Key considerations of valuations and due diligence risk mitigation will be covered.
Value Creation and Portfolio Company Exits
In this module, we will be exploring how the fund management team adds value to the companies in which they invest and grow profitable and sustainable companies. Portfolio company exits, including Gross-Net Gaps, planning, exit options and failed investments will be covered.
Environmental and Social Management and Sustainability
In this module, we will focus on setting clear guidelines for the implementation of sound environmental and social management (ESM) practices.
We will first understand the context of why ESM has become critical for funds and portfolio investors to implement in their investment evaluations. We will then explore some case studies to understand how to apply an ESM lens to different environmental
and social challenges.
Valuations
This module explores the importance of valuation and details the steps of how to value assets accurately. The valuation process and procedures are described, focusing on three different valuation approaches which include the market approach, the income
approach and the cost approach. The valuation standards and principles which inform the valuation process are also discussed.
Portfolio Monitoring and Reporting
This module examines the ideal portfolio management approach designed to ensure the highest possible performance of portfolio companies. Monitoring and risk management is described, and different exit strategies are analysed. You will also learn how to
interpret performance measurements and report to investors.
Corporate Governance
This module focuses on corporate governance and explains how it relates to the fund management process. We will define corporate governance and describe the value of good governance for business.
We will discuss the structure, parameters and types of corporate governance.
We conclude by analysing examples of governance risks.