Browse CFA Level 1

Chapter 3: Investments in Private Capital (Equity and Debt)

Chapter 3: Investments in Private Capital (Equity and Debt) (CFA Level 1): Key concepts explained with clear definitions, formulas, and exam-focused examples.

In this section

  • Private Equity (Venture Capital, Buyouts, Distressed)
    Private Equity (Venture Capital, Buyouts, Distressed) (CFA Level 1): Private Equity Essentials, Venture Capital, and Key Venture Capital Characteristics. Key definitions, formulas, and exam tips.
  • Private Debt and Direct Lending
    Private Debt and Direct Lending (CFA Level 1): Rise of Private Debt, Key Concepts in Private Debt, and Visualizing the Capital Structure. Key definitions, formulas, and exam tips.
  • Due Diligence and Selection Criteria
    Due Diligence and Selection Criteria (CFA Level 1): Understanding the Purpose of Due Diligence, Comprehensive Due Diligence Framework, and Key Areas of Analysis. Key definitions, formulas, and exam tips.
  • Valuation Approaches, Exit Strategies, and Liquidity
    Valuation Approaches, Exit Strategies, and Liquidity (CFA Level 1): Valuation Approaches for Private Companies, Discounted Cash Flow (DCF) Analysis, and Comparable Company Analysis. Key definitions, formulas, and exam tips.
  • Growth Equity and Minority Investments
    Growth Equity and Minority Investments (CFA Level 1): Key Characteristics of Growth Equity, Minority Investments: Empowering Without Overpowering, and Typical Deal Structures. Key definitions, formulas, and exam tips.
  • Leveraged Buyout Financial Modeling
    Leveraged Buyout Financial Modeling (CFA Level 1): Foundations of an LBO, Key Components of an LBO Model, and Sources and Uses of Funds. Key definitions, formulas, and exam tips.
  • Management Team Evaluation and Governance
    Management Team Evaluation and Governance (CFA Level 1): Importance of Management Team Evaluation, Corporate Governance: The Pillar of Sound Oversight, and Board Composition and Independence. Key definitions, formulas, and exam tips.
  • Investor Protections and Term Sheet Analysis
    Investor Protections and Term Sheet Analysis (CFA Level 1): Defining the Term Sheet, Key Elements of Investor Protections, and Protective Covenants. Key definitions, formulas, and exam tips.
  • Structured Private Capital Solutions
    Structured Private Capital Solutions (CFA Level 1): Key Characteristics of Structured Private Capital, Instruments in Structured Private Capital Solutions, and Mezzanine Debt. Key definitions, formulas, and exam tips.
  • Mezzanine Financing and Convertible Instruments
    Mezzanine Financing and Convertible Instruments (CFA Level 1): Ranking in the Capital Structure, When and Why It’s Used, and Key Features and Terms. Key definitions, formulas, and exam tips.
  • Turnaround Expertise and Advisory Platforms
    Turnaround Expertise and Advisory Platforms (CFA Level 1): Key Aspects of Turnaround Expertise, Bringing Operational Expertise, and Restructuring Strategy and 100-Day Plan. Key definitions, formulas, and exam tips.
  • Tax-Efficient Holding Company Structures
    Tax-Efficient Holding Company Structures (CFA Level 1): Why Tax-Efficient Holding Company Structures Matter, Common Domiciles for Holding Companies, and Special Purpose Vehicles and Asset Protection. Key definitions, formulas, and exam tips.
  • Post-Investment Value Creation Methods
    Post-Investment Value Creation Methods (CFA Level 1): Value Creation Framework, Focusing on Growth, Efficiency, and Strategy, and Operating Partners and Specialized Expertise. Key definitions, formulas, and exam tips.
  • Fund Restructuring and Extension Strategies
    Fund Restructuring and Extension Strategies (CFA Level 1): Typical Fund Lifecycle, Rationale for Restructuring and Extensions, and Governance and Transparency. Key definitions, formulas, and exam tips.
  • Secondary Transactions in Private Equity and Debt
    Secondary Transactions in Private Equity and Debt (CFA Level 1): Motivations for Buyers and Sellers, Growth of the Secondary Market, and Key Players and Transaction Flow. Key definitions, formulas, and exam tips.
  • Trends in ESG and Impact-Focused Capital
    Trends in ESG and Impact-Focused Capital (CFA Level 1): Why ESG and Impact-Focused Capital Matter in Private, Implementation Approaches to ESG, and Setting ESG Goals. Key definitions, formulas, and exam tips.

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