PE Lab: a new learning experience for the private equity industry

We developed an industry-specific training solution which is regularly updated to reflect all the changing trends in private equity we observe as a leading firm in this industry.

Laurent Capolaghi

EY Luxembourg Partner, Private Equity Leader

Private equity is quite unique when compared to other industries. Factors such as the business strategy, the existence of different private equity vehicles (each of them with dedicated legal and accounting framework) and the need to address investors’ specific reporting requirements are all contributing to a very complex environment. Another element to consider is the innate fast-paced nature of the industry which requires private equity experts' additional efforts to develop and maintain the professional competence required for their roles.

Our mission at PE Lab is to share our knowledge and experience in the private equity industry to support private equity houses, administrators and fund accountants in their activities. We developed an industry-specific training solution which is regularly updated to reflect all the changing trends in private equity we observe as a leading firm in this industry.

We incorporate in each of our training sessions case studies and learning methods that are immediately relevant to private equity professionals. This means that participants put their learning into practice straight away and make an immediate impact. All our trainers are experts in their respective subject matters. They have practical experience and undertake continuous training and evaluation to maintain the skills needed to deliver inspiring sessions.

We believe that high-quality training is a crucial element of innovative talent management, to improve performance and ensure your teams respond to today’s challenges. At PE Lab we'll be proud to guide you through this journey.

Laurent Capolaghi Valerio Bove

The subjects covered in our open courses are those, which in our experience, are requested the most by private equity firms and fund accountants.

At PE Lab we can, however, tailor our programs as necessary and provide solutions that go beyond the boundaries of the traditional topics covered in private equity trainings.

As one of the leaders in the financial industry, EY has the ability to bring multidisciplinary insights and utilize mixed teams which combine industry knowledge in tax, legal and advisory to adapt our in-house training, learning and development solutions to your specific needs.
Our training methodology has been developed having constantly in mind the risk of the audience becoming overwhelmed or lost in technicalities. All our courses are based on the latest research in adult learning and are constantly improved following the feedback we have received over the years by the participants. Each session is delivered by two high-caliber trainers with proven presentation skills.
At PE Lab, participants will also have the opportunity to meet each other and share insights. Our training courses have been designed with the objective to stimulate participant interest and participation by promoting discussion and connecting the content to participants’ work environments. Each training course will be followed by a lunch or drink allowing participants time to relax and socialize.
We generally organize on-site trainings in the client area of our premises at 35E Avenue John F. Kennedy in Luxembourg as we are convinced that a location different to the day-to-day one can contribute to a better learning experience for the participants and help them stay focused. We can also arrange on-site trainings at the client premises when, requested.

Due to the current impact of COVID-19 in Luxembourg, we are following government advice on fighting coronavirus. For this reason, we re-arranged all on-site trainings in order to avoid close contact and remain socially distant. Our training-dedicated premises ensure the presence of maximum 35 people and those who prefer can attend the training via webcast.

Despite the challenges imposed by the virus outbreak, our objective to help private equity professionals with their training needs remains the same. This is why we developed web-based solutions where participants are invited to attend the training session via internet. The content of the training is the same and participants still have the opportunity to raise questions and interact with the facilitators in the same way they used to do in the past during on-site trainings.

The health and safety of the participants is of utmost importance to us and specific measures will be taken to reduce direct contact between the participants - all without compromising the learning experience.
One of our main concerns at PE Lab is to understand the audience as we assume that participants attend the training because they do not master some of the topics as much as we do.

Our training material has been developed selecting straightforward examples that make clear points about the information we are presenting.

Each training session is specifically designed to include questions, exercises, discussions and case studies in order to give the opportunity for the participants to process the information they receive, and for us to determine how well they understand it.
There are limited places available, so early registration is strongly recommended. To ensure an effective training session, course attendees will be limited to a maximum of 35 people, meaning places will be distributed on a first come, first served basis. If the course is overbooked, you can attend the next session.

You have the possibility to register to each separate module by checking the modules section of thi page, which also gives an overview of the registration conditions and the fee applied to each module.

Module 1 : Introduction to the Private Equity

The objective is to provide the participants with an introductory overview to the private equity business. This introduction also includes a description of the private equity organizations and a market update.

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Laurent Capolaghi, EY Luxembourg Partner, Private Equity Leader

A team brainstorming and preparing for the day during a meeting at the office together.

1.1 Nature and purpose of private equity

1.1.1 The private equity business model and its economic impact

1.1.2 Differences between private equity, venture capital and hedge fund

1.1.3 The PE business life cycle and the J curve

1.1.4 Form of debt financing

1.1.5 Organization of a PE fund

1.2 The private equity market

1.2.1 The global context and the fund raising

1.2.2 Europe

1.2.3 Luxembourg

Module 2 : Carried interest and waterfall model

The objective is to explain, with relevant examples, the concept of carried interest, the different type of carried interest models and the accounting treatment under Lux GAAP and IFRS. The session also covers the most common mistakes involving the calculation of carried interest and its impact over the financial statements

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

woman writing private equity related topics on a white board

2.1 Carried Interest

2.1.1 The concept of carried interest

2.1.2 The different types of carried interest

2.1.3 The key terms used in carried interest

2.1.4 Waterfall and clawback provisions

2.1.5 Recognition and measurement of carried interest (Under IFRS and Lux GAAP)

2.1.6 Case study

Module 3 :Investor reporting in Private Equity

The scope of this session is to describe the process through which the performance of the fund is assessed with a focus on the metrics commonly used in the sector.

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Clément Julien, Assurance Partner

Mature Businesswoman during meeting listening to colleagues on a table.

3.1 Performance Reporting of private equity funds

3.1.1 Why performance reporting is important

3.1.2 Most commonly performance metrics used in PE (TVPI, DPI, RVPI and PIC)

3.1.3 IRR (gross vs net)

3.1.4 Industry best practice reporting standards - Invest Europe Reporting Guidelines Reporting Guidelines

3.1.5 The role of the financial statements and the management report

Module 4 : Luxembourg statutory reporting in Private Equity

The objective of this session is to present the Luxembourg legal requirements relevant to the preparation of the annual accounts and other regulatory reporting including CSSF and BCL. The session also includes an overview of the most common pitfalls and the fines and penalties raised by the Luxembourg authorities in the event of non-compliance

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Clément Julien, Assurance Partner

young woman with a laptop wearing yellow jumper

4.1 Luxembourg statutory reporting in private equity

4.1.1 Legal framework for private equity vehicles

4.1.2 Overview of the relevant accouting framework (Lux GAAP, IFRS, US GAAP etc.)

4.1.3 The Luxembourg standard chart of accounts

4.1.4 Consolidation exemption

4.1.5 Special consideration for SIF, SICAR, RAIF and limited partnerships

4.1.6 CSSF Reporting

4.1.7 Transparency law

4.1.8 Lodging procedures with the Luxembourg trade registrar

4.1.9 Fines and penalties raised in the event of non-compliance

Module 5 : Applying IFRS in Private Equity

The scope of this session is to analyse and apply, with relevant examples and case studies, the IFRS standards applicable to the private equity industry. The session focuses on those transactions, events and circumstances that we consider to be most common in private equity (i.e. carried interest, equity versus financial liabilities, derivative financial instruments etc.).

The session also includes an overview of the most common pitfalls.

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

5.1 Applying IFRS in private equity

5.1.1 The concept of investment entity and the consolidation exception

5.1.2 The recognition and measurment of financial instruments:

equity instruments
debt instruments
investment in associate
investment in joint venture

5.1.3 Financial liabilities and equity

5.1.4 Convertible debts

5.1.5 Derivative financial instruments

5.1.6 An overview of the hedge accounting

5.1.7 Related party disclosure

5.1.8 Carried interest

5.1.9 Improving disclosure effectiveness

5.1.10 Most common reporting pitfalls

Module 6 : Comparison between LUX GAAP and IFRS in Private Equity

The scope of this session is to help the participants gain a deep understanding of the main differences between LUX GAAP and IFRS relevant to the private equity industry

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Caroline Nicoletti, Director, EY Luxembourg IFRS & Luxgaap desk

Concentrated young couple sit on couch busy managing finances paying bills on computer online, focused anxious millennial husband and wife calculate household expenses or taxes use internet banking

6.1 Differences between LUX GAAP and IFRS in private equity

6.1.1 The legal framework

6.1.2 Presentation of financial statements

6.1.3 Consolidation requirements and procedures

6.1.4 Fair value measurement

6.1.5 Financial instruments

6.1.6 Income Tax

6.1.7 Foreign exchange

6.1.8 Business combination

6.1.9 Related party disclosure

Module 7 : Consolidated financial statements

The scope of this session is to help the participants gain a deep understanding of the main differences between LUX GAAP and IFRS relevant to the private equity industry

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Caroline Nicoletti, Director, EY Luxembourg IFRS & Luxgaap desk

a group meeting behind glasses with blue frames

7.1 Consolidated financial statements (scope)

7.1.1 Consolidation scope

7.1.2 Understand and apply the accounting requirements for the preparation of consolidated financial statements

7.1.3 Define the principle of control, joint control and significance influence

7.1.4 Apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee

7.1.5 Determination of whether the fund manager is acting as principal or agent

7.1.6 Identity the types of joint arrangement

7.1.7 Apply joint arrangement accounting and equity method of accounting

7.2 Consolidated financial statements (business combination)

7.2.1 Recognize the main requirements of IFRS 3 including scope and accounting treatment

7.2.2 Apply the acquisition method to business combinations that are within the scope of IFRS 3

7.2.3 Demonstrate how to account for adjustments to provisional accounting

7.2.4 Goodwill recognition (allocated and unallocated part) and test to obtain with the unallocated part. Gain from a bargain purchase

7.2.5 Demonstrate how to account for acquisitions outside the scope of IFRS 3 – Business combinations under common control

7.3 Consolidated financial statements (complex consolidation issues)

7.3.1 Business combinations achieved in stages

7.3.2 Full disposal of a subsidiary

7.3.3 Partial disposal of a subsidiary when control is lost

7.3.4 Partial disposal of a subsidiary when control is retained

Module 8 : Foreign Exchange

The scope of this session is to help fund accountants and controllers gain a deep understanding of the IFRS requirements relevant to the translation of transactions in foreign currency. Through the presentation of relevant examples and case studies, we also discuss the most common mistakes generally made when reporting transactions in foreign currencies.

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Caroline Nicoletti, Director, EY Luxembourg IFRS & Luxgaap desk

a female leader giving a speech to a group of people

8.1 Foreign exchange

8.1.1 The determination of an entity's functional currency

8.1.2 Reporting foreign currency transactions

monetary items
non-monetary items

8.1.3 Exchange differences on intragroup balances

8.1.4 Most common pitfalls

8.1.5 Case study

Module 9 : Introduction to AIFMD

The scope of this session is to highlight the key concepts of the Luxembourg Law of 12 July 2013 on alternative investment fund managers and the responsibilities assigned to fund managers, transfer agents, valuers and custodian banks.

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Norman Finster, Consulting Partner

a group of employees having a discussion

Module 10 : Valuation in Private Equity and private debt

Presenters:

Valerio Bove, Accounting, Compliance and Reporting Partner

Laurent Capolaghi, EY Luxembourg Partner, Private Equity Leader

Rear view shot of single man standing on bow of yacht, Lombok, Indonesia

10.1 The International Private Equity Venture Capital Valuation Guidelines

10.1.1 Key principles of the valuation guidelines

10.1.2 The strengths of the IPEV Guidelines and the challenges in their practical application.

10.1.3 The Market and Income approach

10.1.4 Valuation of private debt instruments

The team

Laurent Capolaghi

EY Luxembourg Partner, Private Equity Leader

Entrepreneur, passionate and keen to assist our clients navigating the changing landscape of Private Equity.

Luxembourg, LUX

Valerio Bove

EY Luxembourg Accounting, Compliance and Reporting Partner

Private Equity expert with audit background. Passionate about kayaking and squash.

Luxembourg, LUX

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

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PE Lab: a new learning experience for the private equity industry

Module 1 : Introduction to the Private Equity

Module 2 : Carried interest and waterfall model

Module 3 :Investor reporting in Private Equity

Module 4 : Luxembourg statutory reporting in Private Equity

Module 5 : Applying IFRS in Private Equity

Module 6 : Comparison between LUX GAAP and IFRS in Private Equity