Course 2016-2017 a.y.

Go to class group/s: 31

CLMG (6 credits - II sem. - OP  |  SECS-P/11) - M (6 credits - II sem. - OP  |  SECS-P/11) - IM (6 credits - II sem. - OP  |  SECS-P/11) - MM (6 credits - II sem. - OP  |  SECS-P/11) - AFC (6 credits - II sem. - OP  |  SECS-P/11) - CLEFIN-FINANCE (6 credits - II sem. - OP  |  SECS-P/11) - CLELI (6 credits - II sem. - OP  |  SECS-P/11) - ACME (6 credits - II sem. - OP  |  SECS-P/11) - DES-ESS (6 credits - II sem. - OP  |  12 credits SECS-P/11) - EMIT (6 credits - II sem. - OP  |  SECS-P/11) - GIO (6 credits - II sem. - OP  |  SECS-P/11) - GIO (6 credits - II sem. - OP  |  SECS-P/11)

Course Director:
CLAUDIO ZARA

Course Objectives

Sustainable business models are increasing in importance within the economic system. Starting from their original field of application (green energy industry), business models which are “circular” are entering and developing in other key industries, such as automotive, food and ITC hardware. Students who attend the course are going to develop in-depth knowledge on business structure and financial analysis for deal typologies usually applied to financing investments in both product and capital structure regarding the sustainable economy.

• How do sustainable and circular business models work in terms of technologies, revenue models, sources and typologies of risk?

• Which are the projects’ financial needs and how does it solve them?

• How do different financial capital typologies (debt and equity capital) combine in green and sustainable businesses?

• Which are the deal typologies offered by financial investors?

• What do financial investors ask to enter the deals, how do they value them, which are the target returns and the contractual framework applied?

Course Content Summary

The course can be split in two parts. The first part is focused on the main sustainable business features and on the analysis of a couple of representative projects. The second part devotes attention to carrying out a comprehensive analysis of the two main ways to finance a sustainable business: project finance and private equity. The whole course is supported by examples and case studies from real experience and real investments.

• Green business and circular economy: what they are and businesses examples.

• Green business and circular business models: in what they differ from traditional business, investment opportunities for outside investors, industry focus, the role played by Government and local authorities.

• Strategy and business plan for the green business: how does an investor look at an investment opportunity and how does he analyse its business plan?

• Circular business model and its plan: how does it identify the competitive advantage in comparison with a traditional business, how does an investor look at an investment opportunity and how does she analyse its business plan?

• Project and business analysis: asset side and operational risk, liability side and risk of default.

• Project finance technique: definitions and examples, analysis of the risks and potential returns associated with the project, financial sustainability and how to measure it, risk for debt-holders (adequacy) and its measure.

• Participants involved in project financing deals – financing: banks and other financial institutions, regulatory issues, rating assignment, contractual covenant and credit enhancement.

• Private equity: definitions and examples, target financial leverage for shareholders, analysis of the risks and potential returns associated with the investment, equity risk and return measures.

• Participants involved in private equity deals – financing: outside investors typologies, regulatory issues, term sheet and investment agreement, performance and realized IRRs.

• The future of green business and circular economy: a perspective.

Detailed Description of Assessment Methods

For attending students
Final written exam.

For non-attending students
Final written exam.

Validity: both the programme and grades have validity for the current academic year.

Textbooks

A collection of lesson slides and other materials which are going to be distributed through the course e-learning web site.

 

Exam textbooks & Online Articles (check availability at the Library)

Prerequisites

This course is also a quantitative course but it does not focus on either mathematical derivations or complicated statistical analysis. It does require some basics in mathematics and statistics for finance. Financial Mathematics, Accounting, and Corporate Finance are advisable prerequisites for Bocconi students. For Exchange students, having attended similar courses is suggested. You must have reasonable knowledge of the basics in financial mathematics such as the time value of money, NPV and IRR; the basics in statistics such as variance/covariance and probability distributions; the basics in accounting and finance such as being able to read and analyse cash flow statements and to calculate cost of capital under the CAPM style.

Last change 22/06/2016 09:18