Equity Capital Markets Simulation

In this Equity Capital Markets Simulation, participants manage the entire IPO lifecycle, from initial valuation and investor roadshows to final pricing and allocation, under intense market pressure.

Equity Capital Markets Simulation Overview

Participants are immersed in the fast-paced world of Equity Capital Markets, acting as bankers for either the issuing company or the underwriting syndicate. The simulation replicates the multi-stage, high-pressure environment of a real initial public offering or follow-on offering. Each decision round introduces new challenges, shifting investor sentiment, volatile market conditions, competitive deals, and evolving company fundamentals.

Teams must analyze financials, determine valuation ranges, structure the offering, craft the equity story, and negotiate critical terms. Success depends not just on securing a high price but on achieving a stable aftermarket performance and building a strong investor base.

This simulation is ideal for MBA programs, Masters in Finance courses, and corporate training for banks and financial institutions, providing an unparalleled practical understanding of how companies access public equity markets.

Equity Capital Markets Simulation Concepts

Participants work through realistic scenarios, which can be customized to emphasize or exclude specific topics depending on the learning goals. This modular structure allows the simulation to be tailored to any type of session. Key concepts include:

IPO process and timeline from kick-off to listing
Company valuation methodologies
Equity story development and investor messaging
Offering structuring (primary vs. secondary shares, greenshoe option)
Bookbuilding process and investor targeting
Pricing strategy and allocation philosophy
Syndicate dynamics and roles of lead managers
Due diligence and regulatory compliance
Market risk and timing considerations
Aftermarket stabilization and trading

Gameflow

What Participants Do

In the simulation, participants will:

Analyze a company’s financials and industry position to build an investment thesis.
Develop a valuation range and recommend an initial price target.
Create a compelling investor presentation and equity story.
Manage the bookbuilding process, gauging demand from institutional investors.
Make critical pricing decisions balancing issuer goals and market reality.
Negotiate fees and allocations with syndicate banks and the issuing company.
Respond to real-time market shocks and competitor deal flow.
Present final recommendations to the simulated company's board.

Learning Objectives

By the end of the simulation, participants will be able to:

Map out the end-to-end process of an equity capital markets transaction.
Apply core valuation techniques in a live deal context.
Understand the roles and incentives of different parties in a syndicate.
Design a strategy to market an equity offering to investors.
Make data-driven decisions on pricing and allocation under uncertainty.
Evaluate the trade-offs between offer price, aftermarket performance, and issuer relations.
Communicate complex financial recommendations clearly and persuasively.
Develop strategic judgment and resilience in a high-pressure transactional environment.

How the Equity Capital Markets Simulation Works

This simulation can be run individually or in teams in academic or corporate contexts. Each cycle represents a stage of getting through a pressing financial situation.

1. Deal Kick-off and Analysis Teams receive the company's confidential information memorandum and market data. They perform initial valuation and strategy analysis.

** 2. Strategy Formulation** Participants develop their offering structure, preliminary valuation range, and core equity story for the investor roadshow.

3. Investor Marketing and Bookbuilding Teams present to simulated investors, gauge demand, and manage an evolving order book. Market conditions may shift.

4. Pricing and Allocation Negotiation Based on demand, teams must finalize the offer price and negotiate the allocation of shares with the issuer and co-managers.

5. Deal Closing and Review The transaction concludes. Teams receive detailed feedback on their financial performance, pricing accuracy, and the stability of the stock in the simulated aftermarket.

Frequently Asked Questions

Who is the Equity Capital Markets simulation designed for? It is designed for students and professionals aspiring to careers in investment banking, corporate finance, or investor relations, as well as anyone seeking a deep, practical understanding of how companies go public.
Do I need prior IPO or banking experience? No prior experience is required. The simulation includes all necessary instructional content, guides, and baseline financial data for participants at various levels.
How long does the ECM simulation take to complete? The core simulation runs for 4-6 hours. It can be delivered in one intensive session or broken into modules across multiple classroom sessions for greater depth.
Is this an individual or team-based activity? It is designed for teams, reflecting the real-world collaborative nature of investment banking syndicates. Teams can compete against each other or against benchmark performance.
What types of equity offerings are covered? The simulation primarily focuses on the IPO process, but the core concepts apply to follow-on offerings and block trades. Scenarios can be customized.
Is the financial data realistic? Yes. Participants work with simulated company financials and market data modeled on real-world scenarios, providing a highly authentic experience.
Can the simulation be customized for our specific program? Absolutely. Instructors can tailor the industry sector, company profile, specific market events, and which stages of the ECM process to emphasize.
What career roles does this simulation prepare participants for? It provides foundational experience for roles in Equity Capital Markets, Investment Banking, Syndicate, Institutional Equity Sales, and Corporate Treasury.

Assessment

Assessment of participant performance can be tailored according to the host institution’s objectives (business school, corporate training, assessment centre). Typical assessment criteria include:

Accuracy of valuation, appropriateness of pricing strategy, and achieved valuation for the issuer.
Effectiveness of the bookbuilding process and quality of the final investor allocation.
Decisions made in response to market volatility and competitive dynamics.
Clarity and strength of the equity story presented to investors and the issuing company.
Ability to work within a team and negotiate terms with other parties.