Financial Valuation Model made for a real estate fund case, but easily adapted to any other investment profile.
Works automatically and allows to calculate different business scenarios by entering new assumptions just changing data (blue figures in "Front page & Inputs" sheet)
Sheets included:
-Front Page & Inputs
-Capital
-Revenues
-Expenses
-Financing
-P&L
-Cash Flow
-Shareholder`s Cash Flow
-Balance Sheets
-Investments
-Depreciations
-V.A.T.
India Economic Survey Complete for the year of 2022 to 2023
Private Equity.Venture Capital Fund VALUATION MODEL & BUSINESS PLAN. A Real Estate Fund case
1. Fund AAA
Business Valuation
11/04/2011
The accompanying material (the “Material”) is being provided to certain persons (the “Recipients”) on the basis that such Material has been
prepared by THE FUND ("THE FUND") and is being provided to each of the Recipients for informational purposes only and THE FUND accepts no
duty of care to such persons with regard to the Material.
None of the Recipients is entitled to rely on such Material for any purpose, including without limitation, providing any professional advice to any
person or making any decision relating to or in connection with the transaction to which the Material relates and no responsibility, obligation or
liability (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by THE FUND or any of its affiliates or any of their respective
employees or agents (the “FUND Parties”) in relation thereto.
THE FUND and each of the FUND Parties expressly disclaim any and all liability which may arise from the Material having been provided to any of
the Recipients or for any consequence whatsoever should any such Recipient rely upon any Material. Each Recipient is deemed to have waived
any claim for liability against THE FUND or any of the FUND Parties that may otherwise arise out of or in connection with the provision of the
Material. The Material remains the full property of THE FUND and may not be released to any third party without the prior written permission of
THE FUND .
2. Project Title Fund AAA COST STRUCTURE FINANCIAL STRUCTURE BALANCE SHEET FIGURES
Fees Long Term Loan Año 2008 E Año 2009 E Año 2010 E
Suscription fee (on total committed capital.) 0,00% Leverage ratio objective 33,00% Formation expenses 25.000 25.000 25.000
BASIC ASSUMPTIONS
Management Fee (on real assets value) 1,80% Leverage ratio average (2008-2012) 25,83% Intangible fixed assets 0 0 0
Firs year considered 2008 Revaluation of fixed assets rate 1,00 x Max % covered with debt (in every single investment) 40,00% Tangible fixed assets 12.265.000 24.515.000 24.515.000
# years considered 6 years Success Fee ("Carried Interest") 15,00% Expiry date 5 years Depreciation -6.800 -13.600 -20.400
RPI 3,00% Apply succes fee on "return on investment by investment performance"
Current Assets 78.315 75.411 9.641
Personnel Social Security contribution ( Company cost) 28,00% Suscription Other Availability cash 307.155 1.673.984 7.581.767
Annual Increasing costs assumption 3,00% Hurdle Rate 15,00% fees & expenses 0,50% 0,00% 0,00% TOTAL ASSESTS 12.668.670 26.275.795 32.111.009
collections period 30 days Lowest multiple on Invested (objective) 1,52 x
current payments period 30 days Other expenses interest rate considered 5,20% Equity 12.668.003 25.050.108 28.656.112
Euros / year Euribor (Swap 6 años) 4,00% Current Liabilities 667 687 707
Fund Manager (Salary) 60.000 Spread 1,20% Long term Creditors 0 1.225.000 3.454.190
Basics of the Fund`s structure
Fund Manager (bonus) 30% TOTAL LIABILITIES 12.668.670 26.275.795 32.111.009
Terms Travel expenses 12.000 Average Debit Balance 2.665.588
Definitive closing 12 monts from the founding prospective investments and realizations (% on amount invested) 3,00% Ratio Analysis
Term of the fund 6 years Realizations deinvestments ( % on amount deinvested) 1,50% Line of credit Short term Leverage ratio 0,00% 4,66% 10,76%
Extension (if decided) 2 years Legal expenses 10.000 Year 1st. Disposal year WACC 13,05% 12,65% 12,12%
Investment period 4 years Annual Auditors 5.000 interest rate considered 2,90%
Investment period extension (if decided) 1 years Board remuneration 0 Euros / member / year 0 Euribor 2,50%
Building / land ratio
CAPITAL # members of the board 9 Spread 0,40%
Total Commited Capital 50.000.000 office expenses Suscriiption fee 0,20% 2009 2010 2011
Initial Drawndown 27,00% Cost office space 84.000 Total amount disposed 0 Building / land ratio 1/4 1/2 2/3
Initial Drawndown 13.500.000 Comucicatios 3.600
Partial Drawndowns ("Capital Call 1") year 2009 27,00% supllies 5.400
Fund `s RESULTS
Partial Drawndowns ("Capital Call 2") year 2010 25,00% Other Operat. expenses 7.200
FINANCIAL RATIOS
Partial Drawndowns ("Capital Call 3") year 2011 21,00% Insurance 1.500 Fund`s net IRR 38,95%
Partial Drawndowns ("Capital Call 4") year 2012 0,00% Office furniture 1.000 Lverage Ratio (average) (%) 25,83% Shareholder´s NPV 13,05% 21.465.517
Representatión 24.000 WACC (%) 11,18%
Total funds invested in new assets 49.000.000 Other 3.000 ROE (%) 221,64% Cash taken back 149.382.625
Supplementary financial needs 0 ROCE (%) 59,93% Gross Gains of the Fund 100.382.625
ROA (%) 74,20%
INVESTMENTS
Net Debt/Equity (times) -0,22
REVENUE ASSUMPTIONS WACC
Net Debt/EBITDA (times) -0,04
Amount per investment average 3,06% s/ commited capital 1.532.000 Formation expenses year 2008 year 2009 year 2010 Coste del Equity (Ke)
# investments / year. (Objective) 8,0 Legal expenses 25.000 Prime rate (German Bond 10 years ) 4,25%
Maximum # investments in portfolio (objective) 33 Patents Risk premiun (sector) 8,00%
OPERATIONAL RATIOS
IRR average per investment 45,00% Otros Beta of Sector 1,10
average period to deinvest ( 2-5 years) 3 years Intangible fixed assets EBITDA/Revenues 81,49% Equity Cost (Ke) 13,05%
multiple on invested capital (per investment) 3,05 x deferred expenses EBIT/Revenues 81,45%
Dividends (assets in portfolio) 0,00% Intercalarios Gross Margin (EBI/Revenues) 81,31% Debt Cost Pre-Tax 4,37%
interest rate for cash allocation 2,50% Tangible fixed assets Net Margin (EAI/Revenues) 52,85% Euribor 4,00%
lands&buildings, real state 3.000 Spread 1,20%
2010 2011 2012 HW & SW specific 12.000 Tax 16,00%
TAX INPUTS
Gains from Deinvestments 25.095.656 25.095.656 25.095.656 furniture & fittings 12.250.000 12.250.000 12.250.000 Lerage rate avarage (2008-2012) 25,83%
Dividends (assets in portfolio) - - - Input V.A.T. rate 19,00%
Other income - - - TOTAL 12.290.000 12.250.000 12.250.000 Output V.A.T. rate 19,00% WACC 10,81%
Total Income 25.095.656 25.095.656 25.095.656 Cumulative 12.290.000 24.540.000 36.790.000 Corporation Tax rate 16,00% WACC average 11,18%
Cash Flow
BUSINESS SUMMARY miles de euros
Internal Rate of Return IRR Net Wealth evolution
Eur 000 Fund AAA
year 2008 year 2010 year 2012
35.000 50,00%
60.000
30.000 40,00%
Debt Debt
50.000 25.000 30,00% Debt 6,10%
0,00% 14,26%
20.000 20,00% Net Assets
40.000 37,32%
15.000 10,00%
Net Assets
10.000 0,00% 43,30%
30.000
Net Assets
5.000 -10,00% Equity 49,23%
50,77%
20.000 0 -20,00% Equity
-5.000 1 2 3 4 5 6 7 -30,00% 50,60% Equity
10.000 48,42%
-10.000 -40,00%
0 -15.000 38,95% -50,00%
2008 2009 2010 2011 2012 2013 -20.000 -60,00%
Investments Deinvestments (cost) GAINS Shareholder´s Cash Flows IRR
4. Project Fund AAA -Revenues Private & Confidential
2008 2009 2010 2011 2012 2013
year 1 year 2 year 3 year 4 year 5 year 6
Income fron Capital Invested
Gains
Amount per investment average 1.532.000
# investments / year. (Objective) 8,00
Maximum # investments in portfolio (objective) 32
# investments / year 8,00 8,00 8,00 8,00 - -
Total investments. Cumulative 8 16 24 32 32 32
Invested Capital 12.250.000 12.250.000 12.250.000 12.250.000 - -
% on Commited Capital 24,50% 24,50% 24,50% 24,50% 0,00% 0,00%
Invested Capital. Cumulative 12.250.000 24.500.000 36.750.000 49.000.000 49.000.000 49.000.000
% on Commited Capital 24,50% 49,00% 73,50% 98,00% 98,00% 98,00%
IRR average per investment 45,00%
average period to deinvest ( 2-5 years) 3 years
multiple on invested capital (per investment) 3,05 x
# Deinvestments / year - - 8 8 8 8
Total Deinvestments. Cumulative - - 8 16 24 32
Total Investments IN PORTFOLIO 8 16 16 16 8 -
Deinvestments Cumul./Investments Cumul. 0,00% 0,00% 33,33% 50,00% 75,00% 100,00%
Deinvested Capital / year (cost) - - 12.250.000 12.250.000 12.250.000 12.250.000
Deinvested Capital . Cumulative (cost) - - 12.250.000 24.500.000 36.750.000 49.000.000
Invested Capìtal IN PORTFOLIO 12.250.000 24.500.000 24.500.000 24.500.000 12.250.000 -
Deinvested Capital ( Cost+Gains) - - 37.345.656 37.345.656 37.345.656 37.345.656
Deinvested Capital ( Cost+Gains). Cumulative - - 37.345.656 74.691.313 112.036.969 149.382.625
Gains / (loos) - - 25.095.656 25.095.656 25.095.656 25.095.656
Gains / (loos). Cumulative - - 25.095.656 50.191.313 75.286.969 100.382.625
Dividends (assets in portfolio)
% s/ invested capital 0,00%
Dividends reported - - - - - -
Total Income from capital invested - - 25.095.656 25.095.656 25.095.656 25.095.656
Financial Income
Cash return 2,50%
Financial revenues 3.839 24.764 115.697 215.706 224.787 160.291
5. Project Fund AAA -Expenses Private & Confidential
2008 2009 2010 2011 2012 2013
year 1 year 2 year 3 year 4 year 5 year 6
Estructura de Comisiones
Suscription fee
% on total committed capital 0,00% -
Management Fee
% on real assets value 1,80%
Total Assets value in books 12.668.670 26.275.795 32.111.009 34.205.492 20.582.964 4.533.205
Revaluation of fixed assets rate 1,00 x
Portfolio Assets market value 12.668.670 26.275.795 32.111.009 34.205.492 20.582.964 4.533.205
Total Management fee / year 228.036 472.964 577.998 615.699 370.493 81.598
Total Management fee. Cumulative 228.036 701.000 1.278.999 1.894.697 2.265.191 2.346.788
Total Management fee payments / year 228.036 472.964 577.998 615.699 370.493 81.598
Total Management fee payments. Cumulative 228.036 701.000 1.278.999 1.894.697 2.265.191 2.346.788
Success fee ("Carried Interest")
A) Succes fee on "return on global fund performance"
"Hurdle Rate") 15,00%
Lowest multiple on Invested (objective) 1,52 x
Gains to reach the hurdle rate - - 6.380.719 6.380.719 6.380.719 6.380.719
Gains to reach the hurdle rate. Cumulative - - 6.380.719 12.761.438 19.142.156 25.522.875
Total Gains to reach the hurdle rate 25.522.875
% success fee 15,00%
Total Success fee earning - - - - - 11.228.963
Total success fee. Cumulative - - - - - 11.228.963
Total success fee payments (can be anticipated under certain conditions) - - - 3.700.266 3.764.348 3.764.348
Total success fee payments Cumulative - - - 3.700.266 7.464.614 11.228.963
B) Succes fee on "return on investment by investment performance" 3.068.436
Gains to reach the hurdle rate per investment operation - - 797.980 797.980 797.980 797.980
Gains to reach the hurdle rate. Cumulative - - 797.980 1.595.961 2.393.942 3.191.922
6. Project Fund AAA -Expenses Private & Confidential
2008 2009 2010 2011 2012 2013
year 1 year 2 year 3 year 4 year 5 year 6
Unit gains per deinvestment - - 3.068.436 3.068.436 3.068.436 3.068.436
Total success fee earnings and payments - - 2.723.213 2.723.213 2.723.213 2.723.213
Total success fee earnings and payments. Cumulative - - 2.723.213 5.446.426 8.169.639 10.892.852
7. Project Fund AAA -Expenses Private & Confidential
2008 2009 2010 2011 2012 2013
year 1 year 2 year 3 year 4 year 5 year 6
Other expenses
Personal
Fund Manager
Salary 60.000 60.000 61.800 63.654 65.564 67.531 69.556
Bonus 30,00% 18.000 18.540 19.096 19.669 20.259
Travel expenses 12.000 12.000 12.360 12.731 13.113 13.506 13.911
Social security contribution 28,00% 16.800 22.344 23.014 23.705 24.416 25.148
Total Fund Manager 88.800 114.504 117.939 121.477 125.122 128.875
Office expenses
Cost office space 84.000 84.000 86.520 89.116 91.789 94.543 97.379
Comunicatios 3.600 3.600 3.708 3.819 3.934 4.052 4.173
supllies 5.400 5.400 5.562 5.729 5.901 6.078 6.260
Other Operat. expenses 7.200 7.200 7.416 7.638 7.868 8.104 8.347
Insurance 1.500 1.500 1.545 1.591 1.639 1.688 1.739
Office furniture 1.000 1.000 1.030 1.061 1.093 1.126 1.159
Representatión 24.000 24.000 24.720 25.462 26.225 27.012 27.823
Total Office expenses 126.700 130.501 134.416 138.449 142.602 146.880
Realization Investments/Deinvestments
% on amount invested 3,00%
prospective investments and realizations 367.500 367.500 367.500 367.500 - -
% on amount deinvested 1,50%
Expenses associated with realizations deinvestments - - 560.185 560.185 560.185 560.185
Total transactions expenses 367.500 367.500 927.685 927.685 560.185 560.185
Formation expenses
Total amount 25.000 25.000
Other operating expenses
Legal expenses 10.000 10.000 10.300 10.609 10.927 11.255 11.593
Annual Auditors 5.000 5.000 5.150 5.305 5.464 5.628 5.796
8. Project Fund AAA -Expenses Private & Confidential
2008 2009 2010 2011 2012 2013
year 1 year 2 year 3 year 4 year 5 year 6
Board remuneration 0 - - - - - -
Other 3.000 3.000 3.090 3.183 3.278 3.377 3.478
Total Other operating expenses 18.000 18.540 19.096 19.669 20.259 20.867
9. Project Fund AAA - Financing Private & Confidential
2008 2009 2010 2011 2012 2013
year 1 year 2 year 3 year 4 year 5 year 6
Leverage Assumptions
Fondos Propios
Share Capital 13.500.000 27.000.000 27.250.000 25.500.000 13.250.000 1.000.000
Share premium
Legal Reserves - - 1.406.112 2.739.487 2.650.000 200.000
Voluntary Reserves - (831.997) (1.949.892) - - -
Retained earnings (831.997) (1.117.895) 1.949.892 - - -
Total Equity 12.668.003 25.050.108 28.656.112 28.239.487 15.900.000 1.200.000
Leverage ratio objective 33,00%
Financiación de Operaciones
Investments in real state 12.250.000 12.250.000 12.250.000 12.250.000 - -
% de buildings (no land) 0,00% 25,00% 50,00% 65,00% 0,00% 0,00%
Investments covered with debt - 3.062.500 6.125.000 7.962.500 - -
Resort to bank debt 40% - 1.225.000 2.450.000 3.185.000 - -
Payments Chart
Loan year 1 - - - - -
Loan year 2 (220.810) (232.292) (244.372) (257.079)
Loan year 3 (441.620) (464.585) (488.743)
loan year 4 (574.107) (603.960)
Bank debt debit Balance - 1.225.000 3.454.190 5.965.277 4.682.214 3.332.432
Leverage 0,00% 4,66% 10,76% 17,44% 22,75% 73,52%
Financial expenses - 31.850 121.659 244.906 276.835 208.381