Real Asset Finance
Course Number 1475
Professor Andre F. Perold
Winter, Q4, 1.5 credits
Enrollment: Limited to 60 students
Real Asset Finance is focused on investing in "real" assets such as timberland, farmland, shipping, oil and gas, metals, power, water, and various other commodities. The course seeks to understand the supply/demand forces related to real assets, and will examine the economic phenomena underlying these asset classes from an investments/capital markets/financial intermediation perspective. It will do so in the context of the global macroeconomic environment and developing market economies.
The course is primarily intended for students who plan to pursue a career in investing (most notably hedge funds, private equity, and wealth management), investment banking, corporate finance, and Finance and capital markets more broadly defined. The course also will be useful to students interested in the macro economy or with specific non-finance interests in the space of real assets (such as strategic issues facing energy firms).
The session sequence will be as follows:
1. The commodity forward markets: pricing, required returns, and implied market beliefs
2. Investing in the shares of publicly-traded real-asset related firms; financial intermediation in the commodities markets
3. Private investing in the energy space: oil & gas; electric power
4. Investing in shipping
5. Innovations in water and agriculture, and related investments
6. Investing in timberland
Each session will be in the spirit of a "mini module", and will involve developing an understanding of the big picture informed by a deep dive analysis of specific public or private, past and current deals and opportunities. The readings will comprise deal sheets or memos, newspaper clippings, and other miscellaneous readings, supplemented if needed with excerpted textbook chapters and other technical background material. Much of the preparation and classwork will involve rigorous quantitative analysis, and the course will assume mastery of the tools and frameworks developed in RC Finance. Protagonists and other class visitors will join in the discussions. The course grade will be based on class participation and a paper that is approximately 10 pages in length. Students will be encouraged to collaborate on the paper in groups.