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đź’° Partners Group Raises $12B Secondaries Fund

Valuing an unprofitable company...

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Happy Wednesday, future bankers!

Hope everyone is doing well! Today we’re covering how to value a company that isn’t profitable, a time you had a miscommunication, and Partners Group’s new $12 billion secondaries fund.

🚀 Let’s get into it.

🔢 Technical Question

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How would you value a company that is not profitable?

Valuing a company that is not profitable can be challenging, but there are several methods that investment bankers often use:

  1. Price-to-Sales Ratio and Revenue Growth Rate: This method involves a combination of a company’s price-to-sales ratio and its revenue growth rate. It’s based on the idea that even if a company is not currently profitable, it may still have strong sales or revenue growth that could lead to future profits.

  2. Discounted Cash Flows (DCF): DCF analysis estimates the value of a company based on the money, or cash flows, it’s expected to generate in the future. This method can be used even for companies that are currently unprofitable, as long as they are expected to generate positive cash flows in the future.

  3. Book Value: This method involves calculating a company’s book value using information from its balance sheet. However, this method might not provide the full picture of a company’s value, especially if it’s not profitable.

  4. Liquidation Value: This method estimates the net amount that could be realized if the business is terminated and the assets are sold off.

  5. Relative Valuation: This method involves comparing the company to similar companies or assets. Even if the company is not profitable, it might still be valuable compared to similar companies.

  6. Market and Industry Trends: Assessing the market and industry trends is another crucial factor to consider when valuing a company that is not profitable. The company might be operating in a growing market or industry, which could make it valuable despite its lack of profitability.

Remember, the key to valuing a company that’s not profitable is to focus on its potential and long-term vision.

đź—Ł Behavioral Question

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Tell me about a time that you had a miscommunication with someone. How did you resolve it?

When responding to this question, it’s important to follow these principles:

  1. Situation: Start by describing the situation where the miscommunication occurred. Be specific about the context and the people involved.

  2. Task: Explain the task you were trying to accomplish that was affected by the miscommunication.

  3. Action: Detail the actions you took to resolve the miscommunication. This could include clarifying misunderstandings, seeking feedback, or implementing new communication strategies.

  4. Result: Discuss the outcome of your actions and how the situation was resolved. Highlight any lessons learned or skills developed through the experience.

  5. Reflection: Reflect on what you learned from the situation and how it has influenced your communication style or strategies moving forward.

Remember, the key is to be concise and clear in your response. Avoid irrelevant tangents and focus on the main points. Show that you have the ability to recognize when a miscommunication has occurred, take steps to resolve it, and learn from the experience. This will demonstrate your communication skills, problem-solving abilities, and adaptability.

đź—ž Industry News

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đź’° Partners Group Raises $12B Secondaries Fund

Swiss investment company, Partners Group, is making waves with the launch of its eighth private equity secondary strategy fund, a hefty $10-$12 billion venture. This move is a bet on the growing popularity of the secondaries market, a space that allows investors to make early exits and free up capital.

Partners Group, with a portfolio of $147 billion in assets under management, has seen a significant portion of its private markets funds deployed to secondaries transactions. The rising cost of capital and slower realization in private equity have led more investors to explore alternatives like secondaries markets for exits.

Read more about this story below.

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-The Finterview Team