UNC Kenan-Flagler Private Equity Fund

Students Manage Million Dollar Private Equity Fund

It's hard to find a silver lining in the tough economy right now, but for students at the University of North Carolina Business School, it is a learning opportunity. UNC Business School students have the unique opportunity to operate a private equity fund seeking to generate real returns to limited partners.

The UNC Kenan-Flagler Private Equity Fund is operated by a 12-member student management team. And this isn't a small responsibility, holding more than $1.3 million of committed capital under management, students have to manage all aspects of the fund. Students raise capital, source deals, perform due diligence, make investment decisions, and then present their decisions to a faculty/advisory investment committee and a board of directors. The students rely, in part, on the UNC alumni network to help source deals and already have partnered with other private equity firms across the country. The average deal size for each transaction is between $20 million to $125 million in enterprise value and the fund can invest between $100,000 to $150,000 of equity capital per investment transaction.

The students are working in an adverse environment but they have been able to capitalize on lower valuations. In fact, they have already successfully completed several investments in companies in the medical and technology fields that they hope are more recession resistant and will bring higher growth than other sectors.

“We are grappling with complex decisions amid a widened scope of risks and considerations. We have broadened our scope of due diligence and are benefiting from lower valuations and a 5-6 year investment horizon to our LPs,” said Michael Kopeikin (MBA Class of 2010), fund director. “We are committed to returning the best return given realistic values, co-investing with top quartile fund managers on leading transactions and thinking about how traditional exit strategies are changing. We are leveraging each members’ expertise and the expertise of our LPs to get our investments right.”

Kate Kitsopoulos (MBA Class of 2009), fund managing director explains the learning experience, “Lower valuations are benefiting deal variety to the fund as we capitalize on the business support from firms with UNC ties and alumni through increased information and access to companies to make the right deals. The ability to understand how to deploy our capital effectively has become even more important in the current economic climate. We continue to see solid opportunities and will take full advantage of investing through the down cycle.”

Fund I will be fully committed by the third quarter of 2009 and students will begin to raise Fund II next fall that will be open to qualified investors that are friends and family of the UNC community. To learn more about the students' fund you can visit their website.


Tags: Private Equity UNC, UNC Kenan Flagler Business School, Private Equity Students, Private Equity Funds, Private Equity Education, Private Equity Economy

Link to This Resource: UNC Kenan Flagler Private Equity Fund

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