Sixth Street Growth
Project Houston is a case study given out by Sixth Street Growth.
While most growth equity firms focus on equity investments, Sixth Street's strategy revolves around providing bespoke financing solutions that allow companies to limit dilution. These solutions include growth-oriented credit or hybrid equity/credit investments. Accordingly, this modeling exam is designed to assess your ability to accurately model out the returns of a minority equity investment and an accompanying credit facility.
A unique aspect of this case study is that Project Houston begins the projection period with negative EBITDA, which would leave it unable to service the significant amortization on the credit facility. However, the case provides details on the breakdown between fixed/variable expenses and how they should be projected over the period. If the case is done correctly, you'll realize the importance of margin expansion/operating leverage in growth investments, as its margins should expand over time (allowing it to service the credit facility).
Does not include solutions
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Growth & VC