TAMARA SAKOVSKA
Copyright © 2022 by Tamara Sakovska. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data is Available:
ISBN 9781119697107(hardback)
ISBN 9781119697121(ePDF)
ISBN 9781119697114(ePub)
Cover Design: Wiley
Cover Image: © Hare Krishna/Shutterstock
To my family
Preface
The Private Equity Toolkit aims to be a book like no other in its field. It is the industry's first practical reference guide to cover all critical aspects of private equity deal execution, from sourcing to exit. As an experienced deal practitioner, I focus on the technical fundamentals and practical judgment skills required by investment professionals throughout the entire lifecycle of a private equity transaction.
This book will introduce you to a number of my proprietary frameworks, checklists and cheat sheets that will enable you to develop your own personalized blueprint for originating, evaluating, executing and monetizing private equity investments. With The Private Equity Toolkit by your side, you will be able to dive straight into actionable advice to address your most pressing needs, including:
1 Building a solid deal origination capability through thematic and opportunistic deal sourcing (Chapters 1, 2 and 3);
2 Identifying the best deal opportunities for your investment mandate and saving time by eliminating the rest (Chapters 4 and 5);
3 Evaluating the quality of the top management team you are seeking to back in your private equity investment (Chapter 6);
4 Analyzing the business plan of an investment target, identifying the main drivers of value creation and developing your own investment base case (Chapter 7);
5 Performing company valuation and robust deal structuring, for both majority and minority investments (Chapters 8 and 9);
6 Pursuing best-in-class deal execution through rigorous due diligence and thoughtful negotiation of the main transaction agreements (Chapters 10 and 11);
7 Adding value to your portfolio business by establishing effective governance processes and implementing an ambitious yet realistic Value Creation Plan (Chapter 12); and
8 Monetizing your investments through conventional routes, or alternative exit strategies (Chapter 13).
Private equity is one of the most fascinating fields in contemporary finance. Private equity professionals get to explore promising investment themes, meet accomplished entrepreneurs, walk the factory floors of real businesses, determine the value of illiquid assets and engineer the main transaction terms, with heated deal negotiations often extending into the late hours of the night. Since private equity is an interdisciplinary field, successful investors need to master a wide range of skills. Thorough technical knowledge of accounting and finance does not suffice on its own and needs to be combined with solid commercial judgment and exceptional relationship-building skills. Those private equity professionals who want to succeed are expected to originate attractive investment opportunities, generate differentiated deal insights, form productive working relationships with management teams, add value on portfolio company boards and achieve profitable investment exits.
How do they acquire these skills at present? Mostly, on the job. Apart from the book that you are about to read, there appears to be no universal reference guide that one can turn to in order to get a systematic overview of the practical aspects of private equity deal execution, from sourcing to exit. When investment professionals start their careers at a private equity fund, they learn how to do their job from senior colleagues by following a “master—apprentice” training model. However, senior private equity professionals generally have little time to dedicate to coaching new hires because they themselves are spread very thinly, often consumed by live deals or portfolio company crises that always take priority. Another obstacle
