Publication number: ELQ-29742-1
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Private Equity Fund (PE) – Financial Model
Private Equity Fund (PE) – Financial Model in Excel.
Private Equity Fund (PE) – Financial Model.
More and more PE funds are created. Management Consultants participate in setting up and modeling the financial model of such firms. In this model, you can see how you can model PE funds.
We start by modeling, in the sheet Investments, the investments done by the PE Fund. We look at the period of 10 years. The assumption is that the investments are done till Year 5. After that, the funds only sell portfolio investments. In this sheet, you also model the size of the investment, to what extent it is financed via Debt. We model also the growth in EBTIDA of portfolio firms, based on assumptions on the growth in the sheet “Parameters”. Every cohort of investments (a group from the same year) are analyzed separately when it comes to EBITDA contribution. We model also Enterprise Value and the Equity Value
After that, we model the Head Office Costs in the sheet HQ. The calculations are driven mainly by the number of people we have and the salaries (from the sheet “Parameters”).
In the sheet “Acquisition”, we estimate the costs of checking and acquiring the firms,
In the sheet “Disinvestment”, we model the costs related to the sell-off of purchased firms.
In the sheet “Bonuses”, we model the costs related to the bonuses give to the employees and management of the PE fund.
Finally In the sheet “Operations”, we summarize all costs of the PE fund and we related them to different things like money invested, current equity value, etc.
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