Understanding the key drivers of underwriting a fund interest is important if an organization intends to use the secondary market to its competitive advantage. This course will give participants the opportunity to review the key components and valuation drivers of an effective secondary model, learn best practices when working with a secondary model and complete a case study on how to underwrite a private equity fund interest. Participants will be exposed to a general framework and tools that will provide an understanding of secondary transactions and the ability to adapt the standard modeling approach to different scenarios whether as a potential buyer, a seller or an investor making an assessment on whether to buy, sell or hold in a GP led transaction. KEY LEARNING OBJECTIVES • Review the components necessary to have an effective secondary model. • Identify the essential data inputs needed to underwrite a fund interest. • Discuss the different variations in fund waterfalls. • Forecast the projected exit proceeds and exit timing of underlying portfolio investments for both public and private companies. • List the ways in which modeling techniques can be adjusted to account for various fund strategies. • Describe how to incorporate unfunded capital commitments into the model. • Integrate sensitivity tables into a functioning secondary model. • Determine the key drivers in a secondary model. • Explain how to evaluate and model idiosyncratic fund characteristics. • Describe the rationale for variances between a fundamental secondary valuation and current market pricing for secondary fund interest. MARKET OVERVIEW WHAT IS A SECONDARY MODEL? SECONDARY MODELING CONSIDERATIONS KEY INPUTS AND ASSUMPTIONS OUTPUTS AND EVALUATION ADDITIONAL CONSIDERATIONS AND SCENARIOS CASE STUDIES COURSE OVERVIEW COURSE OUTLINE 21