Corporate Finance for Sovereign Wealth Funds Training Course

Participants can assess how macroeconomic and fiscal conditions affect investment priorities and constraints.

• Fiscal dependency analysis linking fund inflows to commodity and tax revenues
• Currency exposure assessed against domestic liabilities and imported inflation pressures
• Scenario planning for oil-price shocks, recessions and capital-market dislocations
• Strategic asset allocation distinguished from bottom-up corporate investment selection
• Liquidity buckets defined for withdrawals, commitments, rebalancing and contingency funding
• Country-risk indicators incorporated into target-market screening assumptions

Participants can diagnose a target company’s profitability, cash generation and financial risks from its accounts.

• Income statement recast to separate recurring earnings from non-recurring items
• Balance-sheet analysis identifies debt capacity, pension obligations and hidden liabilities
• Cash flow statements reconciled with earnings, working capital and capital expenditure
• Ratio analysis tests margins, returns, liquidity, turnover and solvency
• IFRS accounting policies reviewed for revenue recognition and impairment judgments
• Related-party disclosures assessed for state ownership and transfer-pricing risks

Participants can identify the commercial drivers that determine a company’s sustainable value.

• Revenue drivers separated by volume, price, mix and customer retention
• Porter’s Five Forces used to assess industry profitability and bargaining power
• Value-chain mapping identifies critical suppliers, assets, channels and capabilities
• Management strategy tested against market growth, competition and execution capacity
• Operating key performance indicators linked to forecast revenue and margins
• Strategic rationale distinguished from financial return and national-development objectives

Participants can build integrated operating forecasts and derive free cash flow.

• Revenue forecast built from volumes, prices, contracts and market-share assumptions
• Margin bridge separates input costs, labour, scale effects and pricing
• Working-capital schedules model receivables, inventory, payables and seasonality
• Capital expenditure split between maintenance, replacement and growth investment
• Tax forecasts reflect loss carryforwards, incentives and effective tax rates
• Unlevered free cash flow calculated from EBIT, tax, investment and working capital

Participants can value a business using discounted cash flow analysis and defend its main assumptions.

• Enterprise value estimated using unlevered free cash flow projections
• Terminal value calculated through perpetuity-growth and exit-multiple approaches
• Forecast periods selected to reflect business maturity and investment cycles
• Mid-year convention applied where cash flows accrue throughout each year
• Sensitivity tables test discount rates, growth assumptions and operating margins
• DCF outputs reconciled with implied multiples and strategic investment rationale

Participants can estimate discount rates appropriate for corporate investments and sovereign fund decision making.

• CAPM estimates cost of equity from beta, risk-free rate and premium
• Country risk premium adjusted for market access, convertibility and sovereign exposure
• Comparable-company betas unlevered and relevered for target capital structures
• Cost of debt derived from credit spreads, maturity and tax treatment
• Weighted average cost of capital calculated using market-value capital weights
• Discount-rate adjustments distinguished from cash-flow adjustments for specific risks

Participants can derive valuation ranges using relevant comparable companies and transactions.

• Comparable-company universe screened by business model, geography and growth profile
• Enterprise-value multiples selected for profitability, capital intensity and sector economics
• Equity-value multiples adjusted for debt, minority interests and non-operating assets
• Precedent transactions analysed for control premiums and market-cycle effects
• Trading multiples normalised for accounting differences and exceptional items
• Valuation football fields compare DCF, trading comparables and transaction evidence

Participants can construct auditable financial models that support investment decisions.

• Model architecture separates inputs, calculations, outputs and audit checks
• Integrated statements link income statement, balance sheet and cash flow
• Assumption registers record sources, ownership, dates and confidence levels
• Circularity controlled through iterative settings, switches and debt schedules
• Error checks flag balance-sheet breaks, sign errors and broken formulas
• Version control records model changes before investment committee submission

Participants can assess whether a proposed investment fits the fund’s portfolio and mandate.

• Investment thesis states value creation, ownership rationale and required conditions
• Portfolio fit assessed through sector, geography, currency and liquidity exposures
• Concentration limits tested against committed capital and look-through holdings
• Correlation analysis considers commodity, equity-market and domestic fiscal sensitivities
• Strategic holdings assessed for public-policy objectives and financial opportunity costs
• Opportunity cost compared against public markets, funds and alternative direct investments

Participants can evaluate ownership structures and protections for sovereign fund investments.

• Primary and secondary share purchases compared for proceeds and shareholder outcomes
• Minority protections cover board seats, information rights and reserved matters
• Share classes assessed for voting rights, dividends and conversion features
• Shareholder agreements allocate transfer restrictions, tag rights and drag rights
• Joint-venture structures tested for governance deadlock and funding obligations
• State ownership implications reviewed under competition, sanctions and disclosure rules

Participants can assess financing alternatives and their effects on equity returns and risk.

• Capital structure assessed using debt capacity, coverage ratios and refinancing profiles
• Acquisition financing compares cash, debt, equity and seller-financing alternatives
• Debt schedules model amortisation, interest expense, covenants and maturity walls
• Covenant headroom tested under earnings declines, rate shocks and delayed receipts
• Dividend capacity analysed after maintenance investment, debt service and reserves
• Financial returns measured through IRR, MOIC and cash-on-cash distributions

Participants can plan and evaluate due diligence required for a sovereign fund investment decision.

• Due diligence workstreams cover commercial, financial, legal, tax and technical evidence
• Quality-of-earnings reviews test revenue, margins, provisions and one-off items
• Management interviews test forecast ownership, incentives and reporting discipline
• Data-room requests prioritised by valuation sensitivity and transaction timetable
• Red-flag reports distinguish deal breakers, mitigants and post-close actions
• Findings translated into valuation adjustments, warranties and approval conditions

Participants can incorporate material ESG and reputational considerations into investment analysis.

• Materiality assessment identifies environmental, labour, governance and community risks
• Climate-transition scenarios test demand, carbon costs and asset-stranding exposures
• Governance reviews assess board independence, controls and shareholder treatment
• Human-rights screening identifies supply-chain, security and displacement concerns
• Reputational risk assessed through stakeholder mapping, media exposure and controversy history
• ESG findings converted into pricing adjustments, covenants and monitoring indicators

Participants can quantify key investment risks and specify practical downside protections.

• Risk registers assign probability, impact, owners, triggers and mitigations
• Scenario analysis tests macroeconomic, operational, financing and regulatory shocks
• Monte Carlo simulation estimates valuation distributions from uncertain key drivers
• Break-even analysis identifies minimum volumes, prices and margins required
• Downside cases model covenant breaches, dilution, liquidity needs and recovery options
• Risk-adjusted recommendations distinguish unacceptable exposure from priced risk

Participants can prepare concise committee materials that support informed approval decisions.

• Investment memoranda structure recommendation, thesis, valuation, risks and approvals
• Executive summaries state decision requested, ownership terms and capital commitment
• Assumption pages distinguish management estimates, diligence evidence and analyst judgments
• Committee papers present base, upside and downside valuation outcomes
• Approval conditions specify diligence closures, governance rights and funding milestones
• Decision logs record challenges, dissent, conditions and subsequent accountability

Participants can establish monitoring plans that track value creation, governance and emerging risks.

• Post-investment dashboards track financial performance, covenants, ESG and strategic milestones
• Board reporting packs compare actual results with approved investment-case assumptions
• Value-creation plans assign initiatives, owners, milestones and expected financial effects
• Early-warning indicators identify covenant pressure, customer loss and liquidity deterioration
• Follow-on funding assessed against original thesis, dilution and revised returns
• Impairment indicators reviewed using IAS 36 cash-flow and market evidence

Participants can evaluate exit routes and prepare for timely investment realisation decisions.

• Exit routes compare trade sales, IPOs, secondary sales and buybacks
• Holding-period assumptions linked to value-creation milestones and market readiness
• Liquidity discounts assessed for minority stakes, transfer restrictions and market depth
• Exit valuation tested against buyer universe, financing availability and regulatory approvals
• Distribution planning considers fund liquidity requirements and reinvestment priorities
• Realisation lessons captured for mandate review and future underwriting standards

Participants can build, review and present a complete sovereign wealth fund direct-investment case for committee decision.

• Mandate constraints translated into investment criteria and approval thresholds
• Target financial statements recast and operating forecast assumptions documented
• DCF, market multiples and scenario analysis produce an equity-value range
• Financing, ownership and shareholder protections assessed within proposed transaction terms
• Due diligence findings consolidated into a prioritised investment risk register
• Investment memorandum drafted with recommendation, conditions and monitoring plan
• Committee presentation delivered and defended against valuation and governance challenge