Private Equity Portfolio Companies Valuation: The Alter Domus Case

Abstract

This thesis explores the valuation of Alter Domus, a company which pertains to the private equity environment providing corporate and fund services for private equity firms and also being a target of PE investment. The study is organized into three chapters. The first chapter provides an introduction to private equity, offering a comprehensive examination of the entire process, from fundraising to the exit phase, and highlights the key characteristics and strategies applied in each step. The second chapter delves into an analysis of target companies and the private equity market over the past two decades, exploring market trends and approaches to valuation. This chapter also introduces the main valuation methods used in evaluating companies in a private equity context. The third and final chapter presents a detailed case study of Alter Domus, evaluates its position within the market, and applies the valuation methods discussed in previous chapters to estimate the company's value. By combining a theoretical understanding of private equity processes with an empirical valuation of Alter Domus, this thesis aims to introduce the main approaches when dealing with a potential investment target which is not listed and provide valuable insights on assessing and addressing the unique challenges and opportunities associated with valuation and investment in privately-held companies.