7 Term Project Specification
The term project is 50% of your course grade and the integrative deliverable of the course. It replaces a traditional final exam. Every student completes the project; track determines orientation, not requirement.
7.1 Project Statement
Apply the full GE-LAV® framework to a real private market asset of your choosing, producing a complete liquidity-adjusted valuation that you would defend to an investment committee (Track 1) or to a thesis defense (Track 2).
The project must include:
- Asset selection and motivation — Why this asset? What’s the valuation question?
- Data acquisition and OU calibration — Secondary market data, fund cash flows, or public proxies
- Standard valuation baseline — DCF, IRR, PME using current industry practice
- GE-LAV valuation — Full pipeline through the GE-LAV® platform
- Comparison and economic interpretation — Where does the valuation gap come from? Jensen bias? Externality? Crisis amplification?
- Sensitivity / robustness analysis — How do conclusions change under stress scenarios?
- Recommendation — Buy/sell/hold (T1) or research extension (T2) with justification
7.2 Deliverables and Weighting
| Milestone | Due | Weight | Format |
|---|---|---|---|
| Proposal | Session 14 | 5% | 2-page PDF + 1-page data plan |
| Draft paper | Session 30 | 15% | 15-page PDF + supporting code/spreadsheets |
| Final presentation | Session 32 | 25% | 20-minute presentation + 5-minute Q&A |
| Final paper | Session 32 | 5% | 20-page PDF + supporting materials |
| Total | 50% |
7.3 Proposal (Session 14, 5%)
What to submit (2 pages + 1-page data plan):
- Asset description (1 paragraph): Name the specific fund / asset / deal. Provide vintage year, asset class, geography, AUM if known.
- Valuation question (1 paragraph): What specifically are you trying to value? A specific LP interest? A potential secondary purchase? A regulatory exposure? Be precise.
- Why GE-LAV is the right tool (1 paragraph): What makes this asset’s valuation particularly sensitive to liquidity premium dynamics? Why would DCF be wrong here?
- Methodology outline (1 page): Which GE-LAV results will you use (Jensen bias, exit boundary, Pigouvian tax, etc.)? How will you calibrate? What data?
- Data plan (1 page): What data do you need? Where are you getting it? What are the gaps? How will you address them? Cite specific sources (Preqin, PitchBook, Capital IQ, Bloomberg, Burgiss, Cliffwater, Pevara, secondary market data providers).
- Track: State explicitly which track you are on and how the project reflects that orientation.
Grading (5%):
| Criterion | Weight |
|---|---|
| Asset is specific and accessible (not “PE in general”) | 1% |
| Valuation question is precise and answerable | 1% |
| Methodology choice is appropriate | 1% |
| Data plan is realistic | 1% |
| Track orientation is clear | 1% |
7.4 Draft Paper (Session 30, 15%)
What to submit (15-page PDF + appendices + supporting materials):
A draft of the full project paper. This is a working draft, not a polished final — but it must contain real preliminary results.
Required sections:
- Introduction (1–2 pages) — Asset, question, why GE-LAV
- Data and calibration (2–3 pages) — Sources, processing, OU parameters
- DCF baseline (1–2 pages) — Standard valuation with documented assumptions
- GE-LAV implementation (3–4 pages) — Full pipeline, parameters, intermediate results
- Results and comparison (2–3 pages) — Where DCF and GE-LAV differ, by how much, decomposition
- Preliminary robustness (1 page) — At least 2 sensitivity analyses
- Open questions and next steps (1 page) — What needs work before final
- References (1 page)
Required supporting materials:
- Spreadsheets or notebooks (Excel, Python, or R) showing all calculations
- GE-LAV® platform outputs (CSV exports or screenshots)
- Data sources documented (file or URL)
Grading (15%):
| Criterion | Weight |
|---|---|
| All required sections present with real content | 2% |
| Data and calibration are sound | 3% |
| GE-LAV implementation is correct | 4% |
| Comparison is well-decomposed (which channel matters?) | 3% |
| Writing is clear and quantitative | 2% |
| Supporting materials are complete and reproducible | 1% |
Peer feedback: Drafts are exchanged with one other student in Session 30 (workshop session). Each student provides a 1-page peer review of their partner’s draft. Peer review quality factors into the final paper grade.
7.5 Final Presentation (Session 32, 25%)
Format: 20 minutes presentation + 5 minutes Q&A. Slides required. Live or pre-recorded with live Q&A both acceptable.
Required slide content:
- Slide 1: Title, your name, track, asset
- Slides 2–3: Motivation — why this asset, why GE-LAV
- Slides 4–5: Data and calibration
- Slide 6: DCF baseline
- Slides 7–10: GE-LAV results
- Slide 11: Comparison and decomposition
- Slide 12: Sensitivity / robustness
- Slide 13: Recommendation
- Slide 14: Limitations and next steps
- Slide 15: Q&A
Q&A is graded. Questions will probe whether you understand your own work. If you cannot answer a basic question about your own calibration, your own results, or your own conclusions, that is a significant penalty.
Grading (25%):
| Criterion | Weight |
|---|---|
| Clarity of motivation and question | 3% |
| Quality of empirical work and calibration | 5% |
| Correct application of GE-LAV framework | 6% |
| Quality of comparison and economic interpretation | 4% |
| Quality of recommendation/conclusion | 3% |
| Q&A defense | 4% |
7.6 Final Paper (Session 32, 5%)
What to submit: A polished 20-page paper (excluding references and appendices), submitted by the end of Session 32.
This is the draft paper, revised based on:
- Peer feedback from Session 30
- Instructor feedback on the draft
- Your own further work between Session 30 and Session 32
Grading (5%):
| Criterion | Weight |
|---|---|
| Improvement over draft | 2% |
| Writing quality and polish | 2% |
| Final results are correct | 1% |
7.7 Track-Specific Project Orientation
7.7.1 Track 1 (Practitioner) Projects
Track 1 projects emphasize empirical realism, investment decision relevance, and communication to non-technical audiences. Strong Track 1 projects:
- Pick a specific, real asset (a named PE fund, a specific infrastructure asset, a specific private credit deal)
- Use real or realistic data from industry sources (Preqin, PitchBook, Burgiss, etc.)
- Frame the question as one an investment committee or LP allocator would ask
- Compare DCF vs. GE-LAV with clear dollar magnitudes
- End with a defensible recommendation an actual professional could act on
- Make the Q&A defense feel like an investment committee meeting
Examples of strong Track 1 project questions:
- “Should CalPERS commit $200M to Blackstone Capital Partners VIII in 2027? Standard DCF says yes; what does GE-LAV say?”
- “Is the secondary market quote of −18% on an Apollo IX LP interest fair value, distress, or opportunity?”
- “Solvency II requires Insurer X to hold capital against its €500M private debt portfolio. Standard methodology gives a Y% charge; what does GE-LAV-adjusted methodology give?”
7.7.2 Track 2 (Researcher) Projects
Track 2 projects emphasize theoretical depth, mathematical rigor, or novel methodological contribution. Strong Track 2 projects:
- Extend, generalize, or critique a specific GE-LAV result
- Add genuine mathematical content (a proof, a derivation, a numerical method)
- Could plausibly become a working paper or thesis chapter
- May calibrate to less-standard data (cryptocurrency, climate-exposed infrastructure, NFTs, art)
- Make the Q&A defense feel like a thesis defense
Examples of strong Track 2 project questions:
- “Extend GE-LAV with jump-diffusion dynamics. Does the Jensen bias formula remain affine? What changes?”
- “Calibrate the McKean-Vlasov mean-field game equilibrium to the 2023 venture capital secondaries data. Does the GE-LAV stability condition hold? What does it imply?”
- “Derive the Pigouvian tax under heterogeneous beta. Does optimal tax design require investor-specific rates?”
7.8 Asset Selection Guidance
Acceptable asset categories:
- Private equity buyout funds (mega, mid-cap, growth)
- Venture capital funds and individual VC secondaries
- Infrastructure funds and specific infrastructure assets
- Private credit / direct lending funds
- Real estate funds (open-end and closed-end)
- Private market fund-of-funds
- LP interests in any of the above
- GP commitment / co-investment vehicles
- Insurance company private market portfolios (for regulatory framing)
- Pension fund private market allocations
- Family office private market allocations
Unacceptable assets (because GE-LAV machinery is not the right tool):
- Public equities or fixed income — these are not illiquid in the GE-LAV sense
- Bank deposits or money market funds
- Crypto spot tokens (acceptable in modified form — derivative positions or token venture funds, yes; spot BTC, no — see Track 2 examples)
If unsure whether your asset is acceptable, discuss with the instructor before submitting the proposal.
7.9 Use of the GE-LAV® Platform
The GE-LAV® platform at liquidityillusion.com is the canonical tool for this project. All students will receive access credentials during Session 17.
The platform provides:
- OU calibration interface
- Jensen bias calculator
- Exit boundary computation
- Pigouvian tax calculator
- Portfolio liquidity-adjusted weights
- Stress scenario library
Track 1 students: Use the platform heavily — it’s designed for your use case.
Track 2 students: Use the platform for baseline, but may also implement extensions or alternative numerics in Python / R / Julia. Disclose any deviation from the platform in your methodology section.
7.10 Honor Code and AI Use
Re: AI use — see the syllabus AI policy. For the project specifically:
- AI may be used as a research and writing aid
- AI may not generate your core analytical work — calibration, results, or interpretation
- Every word, equation, and result in your submission must be something you can defend orally
- The Q&A in Session 32 is designed to test this
Re: collaboration — the project is individual work only. You may discuss your project with classmates informally, but no shared analysis, no shared code, no shared writing. If you and a classmate happen to pick the same asset, your work must still be independent.
7.11 Office Hours and Project Support
- Drop-in office hours: Standard course office hours; bring project questions
- Project-specific 1:1s: Schedule a 30-minute slot via the course calendar in Sessions 14–30; designed for substantive project discussion
- Peer workshop: Session 30 is dedicated to peer review of drafts
- GE-LAV® platform support: Technical issues — email Regent Financial; methodological issues — bring to office hours
7.12 Examples of Past Projects (For Future Iterations)
This section will be populated after the first delivery of the course.