Companion files

Capital Markets

What It Costs to Raise Money, and Who Decides the Number

Julian R. Sterling

These are the four Excel workbooks that go with the book. Every figure the book prints is reproduced in them by a live formula rather than a typed constant — change a secondary quotation, a target maturity, a discount reference or a share count, and every dependent number moves with it. Each one ends with a Checks sheet setting the printed figure beside the computed one: 259 controls in all, every one green. If a control ever reads FAIL, the workbook is wrong, not the book.

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The four workbooks

• Chapters 1 to 3

  Four defensible readings of one bond

  Three of the issuer’s own bonds trade. The new one is issued at seven years, where none of them sits, so the fair value has to be interpolated — and interpolation is a choice. Four conventions give 117.81, 117.84, 120.32 and 122.78 basis points over mid-swaps, and with them concessions of 4.19, 4.16, 1.68 and minus 0.78. On the last reading the issuer printed inside its own curve and paid nothing at all.

  Enter your own three quotations and your own target maturity, and the sheet returns all four at once with the spread between them priced in euros at your size. On Ardennes’ curve that spread was EUR 1,473,880, or 84 per cent of the underwriting commission. The point is to have the number before the mandate is signed.

  The_Interpolation_Workbook.xlsx · XLSX · 17 KB

• Chapters 6 to 8

  The cost that has no invoice, and the honest version of that claim

  The fee, the expenses and the concession discounted properly at the annuity factor. On this transaction the total is EUR 3,611,953, of which 34.38 per cent appears on no invoice — and the sheet says plainly what the book says: at 2026 spread levels the invoiced commission is the larger number. The concession is 0.71 times the fee, not more than it.

  Recompute under each convention and the uninvoiced share runs from 34.38 per cent down to minus 10.85, because under the softest reading the concession is a rebate. Two thresholds are computed live: the concession at which the uninvoiced cost equals the fee, and the one at which it equals the fee and the expenses together. Both fall inside the eight to twelve basis points that were normal in 2022 and 2023, which is why the same arithmetic on the same transaction gave the opposite answer three years ago.

  The_Cost_Workbook.xlsx · XLSX · 20 KB

• Chapters 12 to 14

  One placement, four discounts, and a counterfactual that is usually computed wrong

  Nine and a half million shares at EUR 40.55. The press release said 4.81 per cent. It could have said 2.99, or 5.96, or 6.67 — four references, all quoted in real transactions, 3.68 percentage points apart and worth EUR 15,675,000 on the size sold.

  The cost is split into commission, placement discount and the cost of the leak, and kept split, because they are different costs with different remedies. The leak counterfactual is computed at a constant discount and not at a constant share count: an accelerated placement is sized in proceeds and priced at a discount to a reference, so the right question is what price the same proceeds would have fetched. That is the difference between a defensible EUR 7,686,414 and a figure that assumes the company would have sold the same shares for more.

  The_Placement_Workbook.xlsx · XLSX · 19 KB

• Chapter 16

  The register: every choice, who made it, and what it was worth

  One row for each place in the two transactions where a convention, not a measurement, decides a published number. Who chose it, what the defensible alternative was, and the difference in euros. Across one company’s single year of fundraising the rows come to EUR 17,148,880, against EUR 5,987,475 of invoiced fees.

  Two rows deliberately carry no figure. The order book has no identifiable elasticity — it lost EUR 100,000,000 at an unchanged spread — and retention by investor type is not sourceable from any published study. The register marks them as an absence rather than a convention, and prices only the cost of pretending otherwise. Work down it against your own deal.

  The_Register.xlsx · XLSX · 29 KB

How they are built

Each file has one Inputs sheet, and it carries the only entered values: the secondary quotations, the target maturity, the execution levels, the fees, the share count and the four price references. Everything else is computed from them. Where two readings are defensible, both are shown and neither is chosen — which is the argument of the book rather than a hedge.

The workbooks were checked by moving the inputs and confirming that every dependent figure moved with them. Shifting the nine-year quotation by nine basis points moves all four fair values, all four concessions and every euro figure that depends on them. Switching the quoted reference in the placement sheet moves the discount, the leak counterfactual and the dilution together.

These files accompany Capital Markets. The book is on Amazon.

If this book helped — or didn’t — a few lines on Amazon are worth more than they look: they are what the next reader goes on. Write a review. The workbook stays free either way.

Articles on this book

• How much of an accelerated placement's cost never appears on an invoice?The commission on a EUR 385,225,000 placement was 13.50 per cent of what it cost. The other 86.50 per cent was uninvoiced.
• Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.

Also by Julian R. Sterling

The other books with companion files. The full list of titles is on the author page.

• Breaking Into European Defence ProcurementThe money and the instruments, the 35 per cent content test, and proposal economics.
• Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
• CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
• How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
• How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
• How to Read a Limited Partnership AgreementWhat the clawback actually collateralises, and why every dollar won on the tax clause lands in the uncollateralised column.
• How to Read a Private Funds Financial StatementsThe Harbourgate reporting pack, five worked cases, and rebuilding your own account.
• How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
• Insurance Capital for Asset ManagersWhy the same fund costs two insurers different amounts, and what opacity costs a manager in euros.
• Logistics and Industrial Real EstateNet effective rent, the ageing asset, and the development letting decision.
• Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
• Operational Due Diligence in Private EquityThe rating model built and then broken, and why refining a rubric weakens it.
• Personal Finance for BeginnersWhat a minimum payment really does, and what the snowball and the emergency fund actually cost.
• Private Equity Investor RelationsWhat a fund has returned, read six ways — and the eleven-point gap between them.
• Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
• Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
• Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
• Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
• Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
• Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
• Real Estate Joint VenturesThe JV waterfall and promote, the complete venture, and failure to fund.
• Real Estate Transaction Due DiligenceWhat the diligence cost, which workstreams paid for themselves, and the investigation the book skips, priced.
• REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
• Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
• Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
• Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
• Senior Living and Healthcare Real EstateThe resident engine of a seventy-bed home, the payor mix, and a rota costed at the employer's real hourly rate.
• Significant Risk TransferThe bank's ceiling and the investor's floor derived independently, and the narrow band of prices at which both can say yes.
• Stock Market Investing for BeginnersWhat compounding and fees actually cost, with figures — and a calculator for your own.
• Student Housing Real EstateRevenue per available bed against the rate card, the letting campaign week by week, and the cost base of a 520-bed scheme.
• The AIFMD II HandbookThe reverse stress test computed, and the facility term that moves it more than any asset.
• The Asset-Based Finance HandbookThe borrowing base off a live loan tape, the Meridian transaction, and trigger design.
• The CBAM Compliance HandbookWhat 2027 really costs, how big the buffer should be, and the term the surrender formula counts twice.
• The Co-Investment PractitionerWhat dilution really costs, what a pay-to-play clause is worth, and how much to hold back.
• The Continuation Fund HandbookThe Thalia transaction, the bid funnel, and the fees behind the roll decision.
• The Data Center Development HandbookThe underwrite computed: the levered return the chapter never builds, and what a twelve-month slip costs.
• The Distressed Debt InvestorWhere the fulcrum security actually breaks, and what an 80-cent recovery is worth once composition and time are priced.
• The ESG Manager in Private EquityThe exit in equity and IRR, the line the book drops, and the half-turn nobody controls.
• The EU AML HandbookThe back book sized, and the month beyond which no headcount recovers a one-year window.
• The Evergreen Fund HandbookWhat the sleeve costs, and the headline IRR at which a closed-ended fund merely ties.
• The Family Office ProfessionalWhat an office costs, and the level of wealth at which building one starts to pay.
• The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
• The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
• The Infrastructure Investment AnalystDebt sculpted to a coverage floor, and one asset valued twice to the last decimal.
• The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
• The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
• The Private Equity Operating PartnerThe value creation bridge built in full, and who actually made the return.
• The Private Equity Secondaries InvestorThe seller’s floor beside the buyer’s ceiling — and the zone that usually is not there.
• The Private Fund Compliance OfficerThe grey zone as basis points, a broken deal four ways, and how many items you must test.
• The Private Markets Limited PartnerWhat a co-investment programme really saves, and the loss rate that erases it.
• The Private Markets Valuation SpecialistThe book describes its illustrations without numbers on purpose. These files close the chain, with every step visible.
• The Private Wealth FundraiserThree peaks, years apart, and the signature that tells a forecast miss apart.
• The Real Estate Asset ManagerBusiness plans, leasing, and what deferring the work on a building actually costs.
• The Real Estate Debt InvestorThe margin against the return on capital, the floor priced, and what prepayment protection buys.
• The Real Estate Development ManagerThe residual appraisal, the worked scheme, land diligence and the risk register.
• The Real Estate Secondaries InvestorAn eighteen per cent discount to net asset value that is really 9.18 once the reported value is unsmoothed.
• The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
• Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
• Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
• Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
• Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
• Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
• Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
• Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
• Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
• Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
• Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
• DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
• Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
• Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
• Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
• Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.