The 3-spoke IFIS (Industry-Firmographic-Investment Science) framework of the United States Private Equity Council spells out the knowledge requirements in 22 specific areas that are critical for private equity professionals, helping them in managing their learning and career-preparation process effectively.
Entering the challenging private equity industry and prospering in it as a professional at the highest level demands two key things - one, knowing how to measure, analyze and evaluate environments, scenarios, threats and opportunities; and two, the confidence that you can take optimal decisions and make profitable, risk-weighted judgements.
The powerfully simple 3-spoke IFIS™ knowledge framework guides professionals and aspirants in building their professional competence and readiness for the private equity industry. The USPEC IFIS™ enunciates 22 areas across which USPEC divides private equity knowledge as excellence-essential for professionals engaged in the practice of PE. Notably, USPEC is the world’s first and the only body that focuses entirely on the alternative investments industry enunciating standards of professional knowledge and a rigorous exam-based mechanism for validating knowledge and capabilities of individuals working in various private equity domains, or those inclined to joining them.
Globally, alternative investments, private equity and venture investing are rapidly growing into highly knowledge-intensive domains requiring a complex set of skills. Entering and prospering in them as a professional amidst the challenge and excitement demands demonstrating that you comprehend clearly the dynamics of the industry.
The IFIS framework guides professionals on the knowledge they need to develop and demonstrate about the private-equity industry and the micros of relationship among players, their awareness of the value chain of decisions and processes involved, and the understanding they require of the dynamics of business and organizational management of PE funds. A critical prong of the IFIS of course enunciates the areas in which skills of analysis, calculation, projection and reporting needed during identification of potential investees, valuation, designing and executing funding deals, and managing exits.
The award of the Chartered Private Equity Professional (CPEP™) qualification and designation is based on the CPEP™ exam, which is aligned to the IFIS framework. Candidates are tested for their knowledge, comprehension and their skills of analysis, synthesis and application in around two dozen essential knowledge prerequisites across three dimensions – the knowledge spokes - Industry knowledge; Firmographic knowledge and Investment Science knowledge, as they relate to private equity industry. The Private Equity handbook provided to CPEP™ candidates is aligned with the IFIS framework.
The CPEP™ exam typically tests candidates for their level of knowledge and understanding of the definitions, concepts, principles, frameworks, analysis-techniques, core-best practices and decision-contexts, and understanding of how to apply this knowledge in analysis and decision-making in frontline, documentation and leadership roles in the widest variety of work contexts in the alternative investments industry in general. The essential knowledge table summarizes the CPEP™ body of knowledge and knowledge level specifications in various areas. The table also provides a very clear indication of the nature of questions to be expected in the CPEP™ exam.
|DM#||Essential Knowledge Dimensions||Application in Analysis & Decision-Making||Frameworks & Techniques||Concepts and Principles|
|A||IFIS-PE-1.3/1: INDUSTRY, ECOSYSTEM & DYNAMICS|
|MA-1||Global Alternative Investments Industry||Expert Level||Expert Level||Expert Level|
|MA-2||Nature, Structure & Dynamics of Private Equity Industry||Expert Level||Expert Level||Expert Level|
|MA-3||Economic, Social and Entrepreneurial Impacts of Private Equity||Expert Level||Expert Level||Expert Level|
|MA-4||Regulation, Ethics and Standards in the Global PE Industry||Expert Level||Expert Level||Expert Level|
|B||IFIS-PE-1.3/2: THE BUSINESS & THE FIRM|
|MB-1||Firmographic Models of Private Equity Companies||Basic Understanding||Moderate/ Functional Level||Moderate/ Functional Level|
|MB-2||Establishing a Private Equity Firm & Business||Basic Understanding||Moderate/ Functional Level||Moderate/ Functional Level|
|MB-3||Business & Profitability Objectives for PE Firms||Basic Understanding||Moderate/ Functional Level||Moderate/ Functional Level|
|MB-4||Functional Management Framework for Private Equity Firms||Moderate/ Functional Level||Moderate/ Functional Level||Expert Level|
|MB-5||Technology & Infrastructure for Private Equity Firms||Moderate/ Functional Level||Moderate/ Functional Level||Expert Level|
|MB-6||Designing PE Portfolios for a PE Firm||Moderate/ Functional Level||Moderate/ Functional Level||Expert Level|
|MB-7||Organization & Team Structures in PE Firms||Moderate/ Functional Level||Moderate/ Functional Level||Expert Level|
|MB-8||Managing PE investment funds in PE Firms||Basic Understanding||Moderate/ Functional Level||Moderate/ Functional Level|
|MB-9||Business & People Leadership in PE Firms||Basic Understanding||Moderate/ Functional Level||Moderate/ Functional Level|
|C||IFIS-PE-1.3/3: INVESTMENT MANAGEMENT IN PE FIRMS|
|MC-1||Industry, Market & Business Research & Analytics||Expert Level||Expert Level||Expert Level|
|MC-2||PE Investment Fund Creation||Moderate/ Functional Level||Moderate/ Functional Level||Expert Level|
|MC-3||Investment Analytics for Identification of Potential Investees||Expert Level||Expert Level||Expert Level|
|MC-4||Prospecting and Targeting Potential Investees||Moderate/ Functional Level||Moderate/ Functional Level||Expert Level|
|MC-5||Valuation of Potential Investees||Expert Level||Expert Level||Expert Level|
|MC-6||Designing, Structuring & Negotiating PE Deals||Basic Understanding||Moderate/ Functional Level||Moderate/ Functional Level|
|MC-7||Managing the Investment Process & Establishing an Asset||Basic Understanding||Moderate/ Functional Level||Expert Level|
|MC-8||Monitoring Investee Firms & Managing Relationships||Basic Understanding||Moderate/ Functional Level||Expert Level|
|MC-9||Managing Divestment, Dilution and Exit from Investee firms||Basic Understanding||Moderate/ Functional Level||Expert Level|
USPEC suggests that private equity professionals must not only focus on developing their knowledge of concepts, trends and principles. They must also develop their abilities to comprehend, analyze and synthesize seemingly diverse and complex requirements, and also build a strong set of skills on tools and techniques of modeling, analysis, calculation and reporting. Indeed, as indicated in the specs-table, the requirement of these knowledge and skills vary across the 22 areas covered in the IFIS framework, and can be simply interpreted.
Basic level: Requiring knowledge of fundamental and critical concepts and principles, and ability to comprehend application needs at workplace to be able to make basic contributions in a team.
Moderate Level: Requiring knowledge of fundamental and critical concepts, principles and techniques; ability to comprehend application needs at workplace; and skills to analyze requirements of an assignment, and apply independently, the concepts, techniques and tools at workplace and also contribute measurably in a team assignment.
Expert level: Requiring knowledge of fundamental and critical concepts, principles, tools and techniques; ability to comprehend complex application needs at workplace; ability to synthesize and integrate varying requirements; skills to analyze requirements of an assignment, and apply techniques and tools at workplace independently, as well as guide team members in doing so.