Finance

Fall

• Capital Markets
  This course provides a detailed overview of the world’s debt, equity, and derivatives markets. We start with the fundamentals of how the markets function and then move on to more advanced topics such as the determinants of interest rates, the trade-off between risk and return, the behavior of stock prices, and the pricing and uses of futures and options contracts. We illustrate how and why capital markets are important to investors and managers using real-world problems.
• NLP, Machine Learning, and AI in Finance
  We will study finance applications of new big data textual methods including Natural Language Processing (NLP)/ Machine Learning (ML), and Textual Artificial Intelligence (AI). We will examine how this broad area has applications in finance with tools that include simple text processing to more advanced tools such as machine learning and predictive AI. Areas that we will study that are using NLP include merger prediction and performance, profitability prediction, stock return prediction, evaluation of venture capital business plans, innovation and patenting, banking and other finance topics. Our study materials will be academic articles in finance and economics, not computer science. Students will be responsible for reading and presenting the materials in these articles as well as doing a final research project that would involve analysis of textual data using some of the methods covered in this course. There will be active learning in this course as students will help lead the discussion of various topic areas and we will have some Python exercises that have been developed with accompanying videos. Knowledge of Python is not required as we will guide students through some basic exercises in textual analysis applied to financial documents including 10Ks, earnings calls, and patent text.
• Venture Capital & Private Equity
  In-depth study of venture capital and private equity for those with either investment banking (IB), consulting (including summer internship experience) or previous PE experience and those first year students who have placed out of the finance core fall class. The course will explore more advanced topic in the VC/PE landscape through the lens of general partners, limited partners, and portfolio companies. Specific topics will include portfolio management, deal origination, in-depth due diligence and financial modeling, transaction structuring and financing, value creation, and performance measurement. We will go over more detailed models used in private equity and have several more in depth cases. Guest speakers will be an integral part of the course when we have cases.
• Venture Capital & Private Equity Basics
  The course covers the entire private equity sector (including venture capital, growth equity, and buyouts as well as institutional investors in the sector) of the economy. The course will focus on the basics of venture capital and private equity industries for students with less experience in finance and/or investing. The course will study VC/PE industry participants and explore their various perspectives, models, strategies, objectives, and challenges. Through cases and quantitative exercises, we will introduce the basic analysis and quantitative and qualitative factors involved in venture capital investing, growth equity financing, leveraged buyout (LBO) transactions. Class will incorporate quantitative exercises, cases and models but there will be fewer cases than the regular session of VCPE and we will examine them in greater depth over multiple class periods. We will also have more in class exercises. Guest speakers will be an integral part of the course when we have cases.

Winter

• Corporate Takeovers
  This course, which is highly relevant for anyone working with M&As, develops a deep understanding of the economic principles and large-sample evidence necessary to execute successful corporate control transactions. The central topics include the following: (1) How are firms sold (deal protection devices)? (2) What are common bidding strategies (toehold, offer premium, payment method) (3) How do takeover defenses work (poison pill, staggered board election)? (4) How do mergers affect industry competition (innovation, antitrust)? (5) What is merger arbitrage (strategies and expected returns)? In addition to the readings and lecture material, student groups contribute by bringing in for class discussion recent takeover transactions reported in the financial press.
• Corporate Finance and Shareholder Activism
  This course, which targets corporate consultants as well as members of the financial industry, develops critical thinking about corporate financial decisions and governance. The course starts with research and practice in the areas of corporate governance, shareholder activism and executive compensation. It then continues with investment banking and the capital acquisition process, and it ends with capital structure choice and the resolution of financial distress. The readings contain a mix of academic articles and cases. Working in groups, students are responsible for several class presentations and a final term project. Moreover, in addition to debating core topics, students run their own regressions to verify some of the large-sample results discussed in class. This course was formerly titled Advanced Corporate Finance and Governance (ACFG).
• FinTech
  The purpose of this course is to provide an overview of various technological advances that have emerged in the financial services industry. We discuss technologies aimed at creating new and better ways of saving, borrowing, investing, and transacting. The specific technologies we focus relate to crypto (including blockchain, cryptocurrencies, and tokens), household lending market, real estate market, and robo-advising. We also give an overview of some machine learning techniques and principles as they relate to, e.g., the lending market and investment industry.
• Investments
  The goal of this course is to help students develop a framework for thinking about investment problems. The course examines financial theory and empirical evidence that is useful when making both professional (e.g., mutual funds and hedge funds) and personal investment decisions. The topics covered include portfolio theory, performance evaluation, analysis of trading strategies, and the role of taxes in investment decisions.
• Entrepreneurial Finance
  This course is about the corporate finance of private companies, starting out with a focus on the financing issues and decisions that arise in an entrepreneurial context. We first cover the three fundamental topics in entrepreneurial finance: (1) start-up valuation, (2) deal terms and term sheets, and (3) staged investing, growth options, and potential scale of ventures. We then apply those tools to questions about how to structure an investment in a start-up and determine an appropriate valuation, how much capital to raise and from whom, the mechanics of term sheets and capitalization tables, economics of milestones, subsequent financing rounds and exits. Finally, as time permits, we may also cover more advanced topics in the corporate finance of private companies, such as exits through SPACs, regulatory issues, structure of levered buyouts, and the organization of venture capital, private equity, and private debt funds and firms. The course is taught through a combination of lectures and case studies.
• Quantitative Investing with Python
  The purpose of this course is to provide an introduction to quantitative investing using Python. Although no prior knowledge of Python is required, some familiarity (or comfort) with coding may be useful. We will work with Jupyter notebooks that you can run and edit. Even if you have never coded in Python, you can execute the code, see what happens, and modify the code to understand what the code does. The assignments are modifications and extensions of the code used in lectures, that is, they do not require you to code up from scratch anything you do not see in the classroom notebooks. Quantitative investing in the context of this course means making systematic investment decisions informed by data. That is, there is little or no room for subjective judgments. We will introduce the basic Python libraries (e.g., NumPy, Pandas, scikit-learn, and statsmodels) that we need for acquiring and analyzing data and for completing financial computations such as creating trading strategies and evaluating returns. We start from constructing academic factors (such as value and momentum) and briefly discuss the principles of machine learning and the use (and the associated caveats) of ML techniques for predicting returns. The objective of the course is to give an overview of the methods used in quantitative investing.
• Quantitative Private Equity
  The seminar covers recent academic studies of private equity investments, although the material applies broadly to other alternative assets organized in similar fund structures (e.g., venture capital, growth equity, mezzanine, infrastructure, private debt and real estate funds). The material is divided into two parts: The first part covers the relationship between private equity funds and their portfolio companies. This part covers topics such as the impact of private equity on corporate governance and operations as well as the consequences for employees and other stakeholders in the portfolio companies. The second part takes the perspective of the limited partners (LPs) that provide capital to private equity funds. Topics include the organization and economics of the private equity partnership, risk and return and performance evaluation of private equity funds, and portfolio considerations when allocating capital to private equity funds. The course is technical. The material consists primarily of recent research papers, with a focus on the empirical and statistical analysis in these papers. There will not be much discussion of private equity deal structures and specific transactions. The material is mostly presented in student led presentations, which require substantial preparation and insight into the technical aspects of the papers. A substantial part of the course is two empirical projects where the students will do a statistical analysis of actual private equity data and present their findings to the class. Some familiarity with statistical software, such as R or Stata, is recommended, although it is also possible to do the analysis in Excel.
• Real Estate
  This course provides an overview of the real estate industry and the basic analytic techniques used for investing in this $20 trillion asset class. Students will take a hands-on approach, building a practical knowledge of real estate through case studies, and class discussions. The study of multi-faceted real estate projects allows students to: 1) enhance their understanding of valuation, financing and portfolio management; and 2) analyze a broader set of management problems, such as how to recognize and describe value creation opportunities, how to evaluate and manage risk, how to structure partnerships and business contracts, and how to use real estate optimally within an operating business. A highlight of the course is the opportunity to interact with industry leaders and learn about the latest techniques and trends in the industry.
• Small Buyouts - Private Equity Practicum
  Small Buyouts Private Equity Practicum (“PEP”) is will engage Tuck students in a hands-on learning experience to apply what they have learned in other Tuck classes as well as from their pre-Tuck careers and internships developing their private markets investment fluency, pattern recognition and judgement applied in the real-world context of actual small and middle market buyout acquisitions and investment theses. The learning objective of the class is to enhance the students’ effectiveness in the private investment industry, whether that involvement comes through becoming an investor, becoming a manager of a private institutionally owned business, or as one of the many other participants (consultants, bankers, etc.) in the industry, through relevant, actionable, “real-world” experiential learning. The class is delivered through two curricular elements: a) Deal Review Lab: the review, preparation, presentation and group discussion/evaluation of a series of current and/or recent, real small market buyout opportunity “cases” led by students to simulate an investment committee setting and b) Investment Thesis development: individual student research into an industry sub-segment or other theme to develop and deliver a potentially actionable private equity investment targeting thesis.

Spring

• Investing in Early Stage Social Ventures
  Please note: While 1.5 credits are earned in the spring term, this practicum spans the full academic year. Enrollment is selected based on an application process; students may apply in the spring of their first year. This practicum provides students with technical and applied knowledge to assess the potential of early-stage ventures with social impact. More specifically, this practicum helps students: • Understand the complexities and tradeoffs faced by ventures that pursue a ‘double bottom-line’: economic profits and social impact. • Understand the complexity of defining and measuring intentional social impact. • Understand the motives of different stakeholders around social ventures, such as investors and entrepreneurs. • Manage complex relationships and communication demands with such stakeholders.
• Early Stage Venture Capital Workshop Practicum
  The goal of the Early Stage Venture Capital Workshop Practicum is to engage students in an in-depth, hands-on, team-oriented exploration of real-world early stage venture capital (VC) deal making, first by giving students an intensive grounding in the core elements of early stage venture capital—venture capital fund portfolio construction, deal sourcing, deal screening and selection, due diligence, valuation of early stage companies, convertible notes, capitalization tables, term sheets, the elements of an investment memorandum and negotiations with entrepreneurs—then by engaging students in a series of “deal workshops” whereby students will work on analyzing and conducting “due diligence” on nine “live” venture capital deals, three at a time, meeting with the founders or CEOs of companies that are then active in the marketplace raising Seed, Series A and Series B rounds of venture capital to hear their pitches and ask due diligence questions, and selecting three of those deals (one per set of three) to recommend to their “partnership”, consisting of practicing venture capitalists from around the US, by writing a full investment memorandum for each of the three deals and presenting and defending the investment thesis for the deal in a meeting with the venture capital partners. Unlike interns or associates in venture capital firms, who support the partners in their work, in this workshop, students will take on the role of the partners in a venture capital firm who are leading deals for their firms. In the final week, the deals phase of the workshop concludes with mock negotiation sessions where the teams will negotiate an investment term sheet with three of the nine entrepreneurs, one per team.
• Corporate Valuation
  The goal of this course is to enable you to answer the question, "what is a real asset worth"? You will define, derive, and estimate cash flows, cost of capital, and continuing values to establish intrinsic values for projects, divisions, and firms domestically and across borders using well-known and widely-used valuation methods. In addition to discounted cash flow (DCF) analysis, you will examine alternative approaches such as real options valuation and relative valuation. The course will explore valuation approaches in such career-relevant settings as mature cash flow businesses, IPOs of rapidly-growing businesses, subscription revenue-based business models, LBOs, mergers & acquisitions (M&A), and project financing. We will also explore the links between corporate valuation and corporate financial decisions regarding capital structure, corporate performance evaluation, exchange rates, and country risk. The course will use a mixture of lectures, cases, projects, and guest speakers.
• Housing
  Households allocate nearly one-quarter of their assets to owner-occupied housing and spend more on housing services than on any other expenditure category. Over the last decade, housing transactions have been the focus of many innovative firms that use technology to transform old ways of doing business. This course examines the housing market from occupants’, investors’, entrepreneurs’ and policymakers’ perspectives. The course is divided into four modules. The first module explores the economics of owning vs. renting, asset valuation and supply-demand dynamics. The second module focuses on the housing search process, with a particular emphasis on fintech innovations that disintermediate real estate brokerage. The third module delves into home financing decisions. The fourth and final module studies investments in rental housing, including vacation and other short-term rentals facilitated by person-to-person rental platforms.
• Structuring Mergers and Acquisitions
  This is a minicourse on corporate mergers and acquisitions (M&A). Students will develop the skills necessary to structure a deal or form an opinion about a proposed transaction. Topics include value creation in mergers; choice of payment method; valuation of contingent payments; deal protection devices; incentive effects of deal financing; merger arbitrage; bidding strategies; hostile takeovers; and defensive tactics. We also touch on key elements of the legal and regulatory framework for takeovers, such as filing requirements, fiduciary duties of the target board of directors, and antitrust regulation. The course relies primarily on case analysis, providing ample opportunity to perform merger analysis and practice various corporate valuation techniques.