100+ Private Equity Value Creation Templates

Value bridges measure how private equity returns are driven by underlying changes in portfolio company capital structures, balance sheets, income statements, and broader market forces. The site’s models work for investments that are levered or unlevered, buyout or growth, majority or minority, 10x or 0.1x, and they run on numbers that are usually already available in fund reporting and marketing materials.

Measure value driven by:

Company Performance

• EBITDA, gross profit, revenue
• Margins, operating expenses

Capital Structures

• Leverage effect, gearing
• Equity dilution
• Valuation

Broader Market Forces

• Market valuation multiples
• Addressable market changes
• Sector leverage levels
• Foreign exchange rates

Financing Activities

• Equity inflows and outflows
• Debt financing
• Add-on acquisitions
• Dividend recapitalizations

Example: Market vs. Manager-driven Returns

This value bridge from Module 19 quantifies the impact of foreign exchange rates, addressable market growth, and market valuation multiples on a GP’s equity return.

The analysis demonstrates that $72.2 million of equity value creation is achieved against unfavorable USD strengthening and the contraction of broader market multiples. Since the total impact of market headwinds on the deal is -$10.0 million, the Manager-driven Return is actually $82.2 million.

ValueBridge.net content is organized into 40 Modules that can be searched or filtered by categories and value creation metrics. This helps subscribers identify which of the 100+ value creation templates are best suited for specific applications. Modules provide clear and concise instructions for using value creation templates, with step-by-step examples and resources that enable analysts to check their own spreadsheets for errors. Each Module includes:

Watch a 3-minute platform demonstration.

100% of available ValueBridge.net content, including video instruction, value creation templates, online calculators, module notes, references, case studies, community forums, and support.

Over 70% of content for the first 40 ValueBridge.net Modules is already complete. Nearly all the value creation templates are available and written instruction, with step-by-step examples, has been provided for more than 90% of Modules. Video instruction is available for all the major value drivers related to investment performance, capital structures, and broader market forces. Additional content is being added every week, and most of the remaining material should be completed in Q1 2024.

Module Component Availability

Jumpstart your analysis of value creation in private equity deals, Funds, GPs, and investment programs with ValueBridge.net Excel Templates. The demo includes:

• Finding the best Module to use as your starting point
• Starting on the right tab (EBITDA or revenue-base valuation)
• Only changing the value creation inputs (independent variables)
• Two value creation models (Derivative vs. Logarithmic)
• Five value creation measurments
• Modifying the value bridge charts

Watch a 5-minute demonstration of the Excel templates.

Online calculators are an important part of the ValueBridge.net toolkit. They perform the same math as the Excel templates, but they cannot be altered (broken) through human error.

Consider using the Online Calculators to occasionally spot-check your Excel models. Certainly do so before significant events, like including results in a Private Placement Memorandum or an Investment Committee Memo.

Watch a 5-minute demonstration of the online calculators.

ValueBridge.net intends to give analysts everything they need to solve a particular problem, but we may not get that right every time.

Subscribers can ask questions in the Forum or in the comments section of Case Studies. For problems and applications that are not yet covered by the site’s modules or Excel templates, subscribers can use the site’s Support features to contact us by email, telephone, Zoom, Meet, etc.

GPs often “feel” like certain aspects of their strategy or positioning are true, but struggle to illustrate or prove it with portfolio company data. These are our favorite projects, and we are always happy to discuss them. By helping you solve real-world problems, we develop ideas for future modules and case studies.

Note that ValueBridge.net support is not limitless and does not include us building models for you. For that, you may need to hire us. Several private equity GPs have done so over the last 15 years, so reach out if you are thinking about relevant and interesting projects that require significant number crunching and creativity.

Case Studies highlight interesting applications of ValueBridge.net mathematics, as well as other platform features. Some content has already been created, but this section will become more active in the first half of 2024.

Non-subscribers can view some of the Case Study content, but active subscriptions are required to comment or download related value creation templates.

The Forum section currently highlights updates that are being made to the site. Subscribers can access all forum content, create topics ask questions, and post replies, so this section may become more interesting as subscribers join the site.

Private equity practitioners, who need robust and reliable value creation models, today!

AUXILIA Mathematica was started as a private equity math blog in 2019. The articles, value creation templates, and online calculators initially posted there led to a rigorous mathematical framework that formed the basis of the book Private Equity Value Creation Analysis, published at the end of 2020.

Since 2021, AUXILIA Mathematica has been exploring and explaining the mathematics of private equity through video, on the site and AUXILIA Mathematica’s YouTube page. These videos describe the math in the book and additional applications, with a focus on proofs, derivations, and direct comparisons with other models used in academic and industry research.

ValueBridge.net is application-focused and subscription-based. Each of the 40 ValueBridge.net modules includes downloadable value creation templates, short video demonstrations, step-by-step examples, and online value creation calculators that test models for errors.

AUXILIA Mathematica is theory-focused and free with registration. Content often includes detailed proofs, derivations, and direct comparisons with other models used in academic and industry research. Excel templates and online value creation calculators are available for some (not all) topics on the site.

ValueBridge.net is designed for private equity analysts who want immediate results and generally lack the time or inclination to read a 240-page math book or spend five hours watching video on the AUXILIA Mathematica YouTube page.

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