• Course title: 3.PAT1.Introduction to Private Assets
• Number of ECTS: 6
• Course code: MScFE_PA-1
• Module(s): Module 3.PAT: Specialisation – Private Assets Track
• Language: EN
• Mandatory: Yes

• Course title: 3.PAT2. Buyouts & Venture Capital
• Number of ECTS: 6
• Course code: MScFE_PA-2
• Module(s): Module 3.PAT: Specialisation – Private Assets Track
• Language: EN
• Mandatory: Yes

On completion of the course unit successful students will be able to: 

• Understand Leveraged Buyouts: Gain a comprehensive understanding of the financing structures and strategies used in leveraged buyouts.


• Understand how to setting up buyout funds.


• Evaluate (buyout) fund performance.


• Adress corporate governance problems in leveraged buyouts.


• Develop financing structures for buyout funds. 


• Create Operational Value: Identify and implement techniques for cost reduction, efficiency improvements, and growth acceleration in acquired companies.


• Conduct Due Diligence: Perform thorough due diligence and manage post-acquisition integration effectively.


• Evaluate Early-Stage Investments: Source early-stage investment opportunities and apply startup valuation techniques.


• Structure Venture Capital Deals: Develop term sheets, equity splits, and governance frameworks for venture capital deals.


• Develop Growth Strategies: Formulate growth strategies for startups and monitor the performance of venture capital portfolios.


• Plan Exit Strategies: Understand and execute various exit strategies, including IPOs, mergers, and acquisitions.
  

Part 1: Buyouts
The first part will cover leveraged buyouts, focusing on the various financing structures and strategies used to acquire companies. In a first part, the role of leverage and its relation to betting against beta is laid out. Next, individual companies are analyzed and participants will learn about operational value creation, including techniques for cost reduction, efficiency improvements, and growth acceleration within acquired companies. Finally, the structure of buyout funds will be analyzed. The course will also delve into the due diligence process and the critical steps involved in post-acquisition integration to ensure successful buyouts.
Part 2: Venture Capital
The second part will explore early-stage investments, including how to source opportunities and the techniques used for startup valuation. Participants will learn how to structure venture capital deals, including the creation of term sheets, equity splits, and governance frameworks. The course will cover growth strategies for startups and how to monitor the performance of a venture capital portfolio. Finally, participants will examine various exit strategies, such as Initial Public Offerings (IPOs), mergers, and acquisitions.

60% written exam (2h, closed book)

30% presentation

10% active participation

Literature will be provided in class

• Course title: 3.PAT3. Infrastructure and Private Debt
• Number of ECTS: 3
• Course code: MScFE_PA-3
• Module(s): Module 3.PAT: Specialisation – Private Assets Track
• Language: EN
• Mandatory: Yes

On completion of the course unit successful students will be able to : 

• Understand Market Trends: Gain insights into current and emerging trends in the Infrastructure and Private Debt markets.


• Apply Valuation Techniques: Utilize various valuation techniques to assess the value of Infrastructure and Private Debt investments.


• Navigate Regulatory Requirements: Understand the regulatory requirements for Infrastructure and Private Debt investments in Luxembourg and the EU.


• Finance Infrastructure Projects: Learn about structures and strategies used to finance large-scale infrastructure projects as well as sustainability aspects related to Private Assets.Implement Risk-Sharing Mechanisms: Apply risk-sharing mechanisms between public and private entities in infrastructure projects.


• Incorporate ESG Considerations: Integrate ESG considerations into infrastructure development projects. Reporting requirements and operational execution relating to ESG compliance.


• Understand Private Debt Instruments: Gain a comprehensive understanding of direct lending, mezzanine financing, and syndicated loans.


• Assess Credit Risk: Learn how to assess credit risk and price illiquid debt instruments.


• Navigate Legal Frameworks: Understand the legal and regulatory frameworks governing private debt investments.

Part 1: Infrastructure
This part will focus on financing large-scale infrastructure projects, discussing both debt and equity structures used to fund these projects. Participants will learn about risk-sharing mechanisms between publicthe types and private entities, which are crucial for the successful executioncharacteristics of infrastructure assets as well as the structures and strategies to finance infrastructure projects. This part will also cover Environmental, Social, and Governance (ESG) and sustainability considerations in infrastructure development, highlighting the importance of sustainable and responsible investment practices. The part will conclude with an overview of sustainable finance and impact investing in Private Assets.
Part 2: Private Debt
This part will explore various forms of private debt, including direct lending, mezzanine financing, and syndicated loans, providing a comprehensive understanding of these financing options. It will put these financing tools in context to bank loans and the requirements to finance corporates in growth and restructuring situations. Participants will learn how to assess credit risk and price illiquid debt instruments, which are essential skills for managing private debt investments. The role of private debt funds in alternative financing markets will be discussed, highlighting their importance in providing capital to businesses that may not have access to traditional financing. This part will also cover the legal and regulatory frameworks governing private debt investments, ensuring participants are aware of the compliance requirements in this sector.
Based on the general understanding of Private Debt as a financing instrument, participants will access the stages of initiation of a debtor-lender relation, monitoring during the investment period and exit of the investment.

40% Written exam (1h, closed book)

40% Case study

20% Active participation

Literature will be provided during the first lecture

• Course title: 3.E2.Household Finance and Real Estate
• Number of ECTS: 5
• Course code: MScFE_BK-7
• Module(s): Module 3.PAT: Specialisation – Private Assets Track
• Language: EN
• Mandatory: No

On completion of the course unit successful students will be able to :Carry out their original empirical work, do the critical reading of pertinent articles related to the question and know how to handle complex survey data.

• Carry out their original empirical work, critically read  pertinent articles related to the research question and know how to handle real estate and complex survey data. 


• Critically assess the individual and social benefits of important financial products accessible to consumers.


• Approach consumer financial markets with more empathy towards potential customers and design better functioning products and markets.


• Familiarise themselves with real-world experience of household acquiring their own residence, financial savings, debt and investments, up to current developments.

The objective of the course is to understand how households use financial instruments to attain their objectives, with an emphasis on real estate investment. First, we review the empirical facts on household wealth and inequality, as well as the rational and behavioural aspects underlying consumer financial decision-making. We then study current household financial products and the competitive landscape in credit, investment, and advisory markets. A particular emphasis is placed on residential real estate as both a key asset and a source of debt for households, highlighting its role in wealth accumulation, risk exposure, and financial vulnerability. We also cover innovations in consumer financial products and the regulation of household finance, and provide an overview of recent research on residential real estate markets, including price dynamics, housing affordability, and the impact of macroeconomic and regulatory shocks.
The course includes a group project in which students apply the concepts covered in class and deliver a presentation. We introduce two key data sources: one on household finance and one on residential real estate. These datasets are discussed in class and Stata tutorials guide students on how to prepare their dataset for their own project and how to apply basic estimation techniques on household surveys or on real-estate data collected from online advertisements.

• Oral exam (45%)


• Presentation (45%)


• Active participation (10%)

A comprehensive reading list of recent academic publications and working papers is available from the instructors.

• Course title: 3.PAT4. Valuation, risk, liquidity and taxation
• Number of ECTS: 5
• Course code: MScFE_PA-4
• Module(s): Module 3.PAT: Specialisation – Private Assets Track
• Language: EN
• Mandatory: Yes

• Course title: 3.E1.Behavioural Finance
• Number of ECTS: 5
• Course code: MScFE_BK-6
• Module(s): Module 3.E: Special Topics in Finance & Economics – Electives II
• Language: EN
• Mandatory: No

On completion of the course unit successful students will be able to :

• Know anomalies in finance and economics and understand theoretical explanations


• Know the foundations of behavioural finance and behavioural economics


• Understand human behaviour

 The course:

• introduces to the literature on the anomalies in financial markets and the theories of behavioral economics and finance. Departing from the standard paradigm in financial economics, expected utility and the capital asset pricing model, we pinpoint anomalies that show up in the data from the real world and the laboratory.
• includes models of prospect theory, noise trader risks, psychological game theory, bounded rationality that help to understand the divergence between observed behavior and the standard paradigm of financial economics.

Written exam (2 hours)

Literature:

 

• Barberis and Thaler 2003. “A survey of behavioral finance.” Handbook of the Economics of Finance, 1, 1053-1128


• Dhami, Sanjit, 2016, Foundations of behavioral economic analysis. Oxford University Press


• Gigerenzer and Selten (Eds.) 2002. Bounded rationality: The adaptive toolbox. MIT press


• Hens, Thorsten and Kremena Bachmann, 2009, Behavioral Finance for Private Banking, Wiley


• Kahneman and Tversky 1979 “Prospect Theory: An Analysis of Decision under Risk” Econometrica


• Shleifer Andrei, 2001, Inefficient markets – An introduction to behavioral finance. Calderon Lectures in Economics


• Thaler 1985 “Mental accounting and consumer choice”. Marketing science, 4(3), 199-214


• Thaler 1999 “Mental accounting matters”. Journal of Behavioral decision making, 12(3), 183-206


• Thaler and Johnson 1990 “Gambling with the house money and trying to break even”. Management science 36, 643-660


• Tversky and Kahneman 1992 “Advances in prospect theory”. Journal of Risk and uncertainty, 5(4), 297-323

Further readings will be communicated during the lectures.

• Course title: 3.E3.Financial Engineering
• Number of ECTS: 5
• Course code: MScFE_BK-8
• Module(s): Module 3.E: Special Topics in Finance & Economics – Electives II
• Language: EN
• Mandatory: No

On completion of the course unit successful students will be able to :

• Show proficiency in probability and statistics, calculus, programming and use these tools to model markets and drive decision making


• Understand risk and analyze financial data


• Design and implement complex financial models that allow financial firms to price and trade securities


• Understand the current academic and practitioner literature on financial engineering


• Get exposed to some of the most applicable machine learning techniques in finance considering that machine learning and Artificial Intelligence (AI) play a significant role in the creation of models

Understanding risk and analysing data to drive policy and decision making is the name of the game in institutions like i.e. banks, insurance companies, hedge funds, and governments.Financial Engineering is the study of applying math, statistics, computer science, economic theory, and other quantitative methods to analysing and modelling financial markets. Financial engineers work at the intersection between data science and finance. The first financial engineers were Fischer Black, Robert Merton, and Myron Scholes, infamous for their options pricing model known as the Black-Scholes Model. This model won the Nobel prize in economics and is the foundation for the explosion in derivative markets. 

The final grade of the course will be derived from the grade for participation (25%), the presentation (25%) and the grade for the research paper (50%).

Literature:

 
“Statistics and Data Analysis for Financial Engineering”, 2nd edition by David Ruppert and David
S. Matteson, Springer, ISBN 978-1-4939-2614-5 (eBook)
 
Research papers

• Course title: 3.E4.Professional seminars
• Number of ECTS: 5
• Course code: MScFE_BK-9
• Module(s): Module 3.E: Special Topics in Finance & Economics – Electives II
• Language: EN
• Mandatory: No

Fund Channel SA (professor: Olivier MARCY): In full autonomy, be able to select the reliable information sources, to analyze the information accuracy. Get the right information at the right moment, it is key and critical in finance.

Alternative liquid investments (professor: Edoardo ANCORA): At the end of the course the students will have a complete overview of the valuation techniques applied in Luxembourg for private equity, real estate and private debt. The students will be able to become familiar with the practical aspects to perform and assess a valuation of an alternative and illiquid investment.

Let’s set up an asset management business (professor: Nicolas DELDIME): Understand the strategic concerns of entrepreneurs who move to Luxembourg to do asset management. Have a holistic understanding of a regulated organizational model.

BCEE (professors: Yves BODSON, Philippe HENNES, Yves DOMINICY)

Risk Management: The first part of the lecture is an introduction to risk management answering the questions what risk is and what is risk management. The different types of risk in a bank will be introduced, as well as the Banking Union and the three lines of defense. In the second part of the lecture, we will concentrate on the credit risk, and we will be talking about credit scoring models.

Asset Classes and securitization: Presentation of the primary financial asset classes (key legal and economical definitions, interaction between economic and financial cycles, valuation criteria applicable to fixed income instruments and to equities, risk categories and key measurement tools) and of the securitization market (key concepts with references to the primary financial asset classes and evolving legal and economic landscape)

Corporate Banking: The presentation will address the management of the bank’s commercial relationship with corporate/professional clients, with the main theme of business financing.

Fund Channel SA (professor: Olivier MARCY)

Information Hierarchy (Duality between, media objectives and public targeted, versus, financial resources)

Part I:

Brief history of the messages and the information channels and approach of the Media theories

News-papers – Information hierarchy

Part II:

Impact of the digitalization

Web platforms and social media – information hierarchy

Social Media information hierarchy – (student presentations – 2/4 per groups)

 

Alternative liquid investments (professor: Edoardo ANCORA)

In a time of low-interest, low inflation and high turbulence in Stock Exchanges, investment managers are engaged in the hunt of higher yields like never before, starting to explore the alternative and illiquid investment space.

In this context, a key skill required is the capability to properly value alternative and illiquid assets. During the course we will explore the main alternative investments (private equity, real estate, and private debt) and the typical valuation techniques applied by investment managers in Luxembourg.

 

Let’s set up an asset management business (professor: Nicolas DELDIME)

1. Asset management is a regulated profession. What does it mean to practice a regulated profession?

2. Build an organizational model (governance, staffing, insourcing / outsourcing, different stakeholders)

3. Build a business plan

4. Review of a practical case

BCEE (professors: Yves BODSON, Philippe HENNES, Yves DOMINICY): 3 hours written exam

Fund Channel SA (professor: Olivier MARCY): 20mn presentation during course period

Alternative liquid investments (professor: Edoardo ANCORA) :1 hour written exam

Let’s set up an asset management business (professor: Nicolas DELDIME): 1 hour written exam

The final grade is the aggregation of the 4 exams’ grade (weighted / Teaching Units)

Literature

Information Hierarchy – Fund Channel SA (professor: Olivier MARCY):
Digital Platforms :
Fundchannel.com
Bloomberg.com
Morningstar.com
Fundinfo.com
Fundsquare.net
SwissFundData.ch
six-group.com
Books :
Media et Société (Francis Balle – Montchrestien – 7ème Edition – 2019)
Culture Numérique (Dominque Cardon – Les presses de Sciences Po, Coll. « Les petites humanités » 2019)
Histoire des Médias (Jacques Attali Fayard – 2021)
Deux Mille Mots pour dire le Monde ( Henriette Walter – Bouquins – 2021)
Histoire politique de la roue (Raphaël Meltz – Librairie Vuibert – 2020)
Histoire de la Rue de l’Antiquité à nos Jours ( Danielle Tartakowsky – Tallandier 2022)
Les Algorithmes font la loi (Aurélie Jean – Livre de poche – 2023)
Histoire Mondiale des Impôts de l’Antiquité à nos jours (Eric Anceau, Jean-Luc Bordon Passés / Composés – 2023)
No Crypto ( Nastasia Hadjadji – 2023)
Technopolitique (Asma Mhalla – Seuil – 2024)
Newspapers MultiMedia Platforms :
Financial Times (UK World Wide)
The New Yorker
BBC
The Economist
South China Morning Post
Jeune Afrique
Les Echos (FR)
L’Echo De Tijd (BE)
Handelsblatt  (DE)
Beaux Arts Magazine (FR)
Le courrier International

Let’s set up an asset management business (professor: Nicolas DELDIME):Circular Commission de Surveillance du Secteur Financier 18/698