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Ms Sarah Paterson New Academic Building 6.06 and Dr Simon Witney

Simon Witney teaches weeks 1-5, and 7-9. Sarah Paterson teaches weeks 10 and 11.

This course is available on the LLM (extended part-time), LLM (full-time) and University of Pennsylvania Law School LLM Visiting Students. This course is available with permission as an outside option to students on other programmes where regulations permit.

Students should note that private equity is a specialist asset class,and the basics of debt and equity are not covered in LL4CQ. The course is, therefore, recommended for students who are taking other, relevant corporate law and financial law courses, or who have relevant experience.

This course will equip students with a detailed understanding of the legal structures and issues arising in international private equity and venture capital.  It is founded on deep academic analysis of pertinent theoretical and legal issues complemented by insights from relevant practitioners.  It will have a UK focus but will include relevant apsects of European Union law with comparative global perspectives. 

Class 1: Introduction to private equity and venture capital and some basic theory

This introductory session will include a critical discussion of the academic research suggesting that private equity outperforms other asset classes and will introduce some of the theoretical frameworks that will underpin the course.

Class 2: Fund structures and terms: the limited partnership and other international structures 

This class looks at the structures adopted, and the reasons why, with particular emphasis on the legal, tax and regulatory characteristics of limited partnerships. We also examine some key fund terms.

Class 3: Fund terms and structures (continued)

This class continues our analysis of fund terms and structures, including the fund management vehicle.

Class 4: Private equity fund (and manager) regulation 

This session looks at UK and EU regulatory initiatives, and critically evaluates the provisions of the Alternative Investment Fund Managers Directive which affect private equity funds.

Class 5: Venture capital investments 

Starting from a theoretical perspective, we will analyse the terms of a typical venture capital investment into a portfolio company by reference to example documents.  We will also examine various aspects of contract and company law which have particular relevance to VC structures.

Class 6: The VC deal: feedback from a practitioner 

This week the students will discuss the key points arising from a venture capital investment case study with a leading VC lawyer.  We will focus on key points which have a legal as well as a commercial aspect, and connect these to the theoretical discussions in Class 5.

Class 7: The buyout: structure and terms

This class will examine the structure of a buyout and how it differs from a VC investment.  We will focus on pertinent company law rule and the main commercial terms.

Class 8: The buyout: corporate governance issues

This class will examine recent developments in corporate governance of large, private companies and their relevance for and application to portfolio companies in buyouts.

Class 9: Financing

This class will look at the leveraged finance model, advantages of leverage, the LMA Leveraged Loan Agreement, High Yield Bonds, the Inter-creditor Agreement and 'covenant-lite' and incurrance covenants.

Class 10: This week we will analyse a suite of leveraged loan deal documentation for a typical private equity buyout.  Students will be provided with a fact pattern and asked to apply the theory that they have studied in week 9 to the deal documentation.

This course is delivered through a combination of classes and lectures totalling a minimum of 20 hours in Lent Term. Students will usually have two additional hours in the Summer Term. This year teaching will be delivered through recorded online lectures and a mix of both in-person and online classes to accommodate students who are unable to physically be on campus. This course includes a reading week in Week 6 of Lent Term.

A formative essay will be due in Week 7 and detailed feedback will be provided shortly after.  The essay will have a word limit of 1,500 and will provide invaluable preparation for the summative assessment.

Example core readings:

Blake J., and Robinson, L., “Private equity fund structures – the limited partnership”, in Hale, C. (ed.), Private Equity: A Transactional Analysis, 3rd edition (Globe Law and Business, 2015)

Cooke, D.J., Private Equity: Law and Practice, 5th edition (Sweet & Maxwell, 2015), selected chapters

Gullifer, L. and Payne J., Corporate Finance Law: Principles and Policy (Hart Publishing, 2015), 768-790

Jensen, M.C. & Meckling, W.H., “Theory of the firm: Managerial behavior, agency costs and ownership structure”, 1976, Journal of Financial Economics, 3(4), pp.305–360.

Talmor, E. & Vasvari, F., International Private Equity (John Wiley & Sons, 2011), selected chapters

Witney, S., Private Equity Finance and Buyouts, in Dunne, P., (ed). Company Acquisitions Handbook (Tottel Publishing Ltd, 2007), p. 651.

Witne, S., The Corporate Governance of Private Equity-Backed Companies, 2017, PhD thesis ()

Additional weekly readings will be provided to the students at the beginning of the course.

Take-home assessment (100%) in the ST.

Students will be given a period of time in which to complete and return a take home exam, with penalties for late submission.  Students will be asked to complete 2 questions from a possible 6 (with a requirement to choose one question from Part 1 and one question from Part 2) and each answer will be limited to 1,500 words, with penalties for exceeding the word limits. The length of time set for this assessment already takes into account that students may also have one or more other exams during this period.

For more information regarding penalties, please refer to the LLM Handbook.