Vietnam Investment Nurturing Hub’s Post

Capital allocation strategies for new investors This is a principle that the most successful CEOs, from Warren Buffett to Jeff Bezos, have mastered... Dramatically impacting their companies' long-term investment returns. Here’s how these apply directly to you: Capital allocation within a property investment portfolio is not just about spending money but investing it wisely to ensure sustainable growth and profitability. This involves a range of strategies from joint ventures and organic growth to prudent debt management and deciding against paying dividends for reinvestment purposes. Effective Strategies You Should Consider: 1️⃣ Joint Ventures (Mergers and Acquisitions): Think of joint ventures as your path to rapid expansion. By partnering with other investors, you can share risks and pool resources for larger projects. This approach is especially effective in property development and can significantly accelerate growth. 2️⃣ Investing in Organic Growth: The most successful property investors focus on decentralized operations, leveraging professional property management teams and contractors. This frees up your capital and time to be reinvested into further profitable ventures rather than getting bogged down in day-to-day management. 3️⃣ Debt Consolidation: Intelligent debt management can make or break your investment returns. Knowing when to leverage low interest rates and when to pay down debt is crucial, balancing risk and maximizing cash flow for future investments. 4️⃣ Avoiding Dividends: While dividends can be appealing, they are often tax-inefficient. Reinvesting profits into acquiring more assets can compound your investment returns far more significantly over time. To summarize: where you choose to allocate your funds determines how quickly and efficiently your portfolio grows. Making strategic decisions about where to invest your resources can lead to a higher return on investment and a more lucrative property portfolio.

Capital allocation strategies for new investors This is a principle that the most successful CEOs, from Warren Buffett to Jeff Bezos, have mastered... Dramatically impacting their companies' long-term investment returns. Here’s how these apply directly to you: Capital allocation within a property investment portfolio is not just about spending money but investing it wisely to ensure sustainable growth and profitability. This involves a range of strategies from joint ventures and organic growth to prudent debt management and deciding against paying dividends for reinvestment purposes. Effective Strategies You Should Consider: 1️⃣ Joint Ventures (Mergers and Acquisitions): Think of joint ventures as your path to rapid expansion. By partnering with other investors, you can share risks and pool resources for larger projects. This approach is especially effective in property development and can significantly accelerate growth. 2️⃣ Investing in Organic Growth: The most successful property investors focus on decentralized operations, leveraging professional property management teams and contractors. This frees up your capital and time to be reinvested into further profitable ventures rather than getting bogged down in day-to-day management. 3️⃣ Debt Consolidation: Intelligent debt management can make or break your investment returns. Knowing when to leverage low interest rates and when to pay down debt is crucial, balancing risk and maximizing cash flow for future investments. 4️⃣ Avoiding Dividends: While dividends can be appealing, they are often tax-inefficient. Reinvesting profits into acquiring more assets can compound your investment returns far more significantly over time. To summarize: where you choose to allocate your funds determines how quickly and efficiently your portfolio grows. Making strategic decisions about where to invest your resources can lead to a higher return on investment and a more lucrative property portfolio.

The British Business Bank has launched its new Northern Powerhouse Investment Fund (NPIF) II, a £660m fund set to cover the entire North of England. Providing loans from £25k to £2m and equity investment up to £5m, the Fund will continue investing into companies operating within the North West, Yorkshire and the Humber and Tees Valley. It is now expanded to include the whole of the North East enabling businesses across the whole of the North to access the Fund to start up, scale up or continue on their growth journey. Nine fund managers have been appointed to manage the Northern Powerhouse Investment Fund II. In the North West, GC Business Finance & River Capital will manage the smaller loans part of the fund (£25,000 to £100,000), FW Capital will be responsible for larger loans (£100,000 to £2m) and Praetura Ventures will manage equity deals (up to £5m). In Yorkshire and the Humber, Mercia will deliver debt finance (£100,000 to £2m), as well as equity finance (up to £5m) to smaller businesses with Business Enterprise Fund (BEF) delivering smaller loans between £25,000 and £100,000. With NPIF II now set to cover the entire North East, NEL Fund Managers Limited (NEL) will provide both smaller loans (£25,000 to £100,000) and debt finance (£100,000 to £2m) to North East businesses with Maven Capital Partners managing equity deals up to £5m. David Foreman, managing partner and co-founder at Praetura Ventures, said: “This is a huge day for us – and hopefully for North West founders. “Today, Praetura and British Business Bank launch the £100m Northern Powerhouse Investment Fund II – Equity North West. “We’ve been working towards this for an insanely long time and we want to make this a real game-changer for companies in the North West of England." Gary Guest, fund director at FW Capital, said: “We can’t wait to get started delivering the fund and driving innovation, growth and job creation in areas where such investment is critical.” Michael Vassallo, investment director of Maven, said: “The North East already has a thriving ecosystem for ambitious companies, and the new fund underscores our commitment to supporting the growth and development of SMEs from Northumberland to Teeside.” Louis Taylor, chief executive of the British Business Bank, said: “The success of the first Northern Powerhouse Investment Fund has proven the instrumental change that access to finance can have for small businesses." The British Business Bank will be holding a roadshow of events for small business finance intermediaries across the region to provide more information about the Fund. Destinations include Newcastle (18th April); Manchester (24th April), Sheffield (30th April). Further dates for roadshow events in Liverpool, Hull, Lancashire, Tees Valley, York, Cheshire, Durham, Cumbria and Northumberland will be announced shortly. https://lnkd.in/eh_JEQ-X

The Midlands Engine Investment Fund (#MEIFII) is launching its second fund, with £400m being made available to support business growth over the next five years. The money follows on from a £300m fund that launched in 2017 and is credited with supporting the creation of 4,300 jobs in the region and bringing along an additional £400m of private sector investment. The new funds are designed to boost the supply and diversity of early-stage finance by providing options to firms that might otherwise be unable to secure investment. Initially £281m has been allocated to five fund managers. Mercia Asset Management PLC, which received an initial allocation of £23m last time, is ultimately responsible for more than £200m. Mercia Asset Management PLC will have £163m for equity deals across the #Midlands, and can deploy up to £5m per deal. Frontier Development Capital, which was acquired by Mercia Asset Management PLC in December 2022, has £44m to loan to West Midlands businesses with an individual limit of £2m, while Maven Capital Partners will manage £46m for the #EastMidlands and #SouthEastMidlands. BCRS Business Loans and First Enterprise - Enterprise Loans will continue to manage the small business loans, and will each have £14m to deploy in loans up to £100,000. https://lnkd.in/eD7_nmaE

Private Equity: Carried and Promoted Interests Explained 🏆 In deals where assets are funded by private equity, the structure of the equity investment is typically a vehicle that is comprised of investors, or Limited Partners (LPs). These tend to contribute 90-95% of the funds, alongside the fund sponsor, or General Partner (GP) who often contribute 5-10% of capital. The GPs negotiate a more advantageous split of the profits than that of their pro-rata capital invested. This is due to the additional work undertaken to create the fund, find and vet the targets, manage the transaction as well as the ongoing investment. When a GP takes a greater share of the profits than a pro-rata investment, it is called a ‘carried interest’. Typically, in real estate deals using the same GP/LP structure, the name for this concept is a ‘promoted interest’. The Purpose of Carried and Promoted Interest: PE sponsors, or GPs, are compensated in two ways with regard to their investment funds. The first is the management fee which is based on the LP’s assets under management by the sponsor firm. This is typically around 2% and covers or contributes to the administrative costs of the sponsor firm. The carried interest (15-20%) is the sponsor’s compensation for finding the transaction, negotiating the terms, signing on to the debt, and managing the transaction until disposition. In real estate, the promoted interest is typically 20-30%. The carried or promoted interest is calculated on the profits of the deal after the debt has been paid back and any preferred returns have been achieved. Promoted Interest: The concept behind promoted interest or a ‘promote’ as it is referred to in real estate jargon is similar but the mechanics of the waterfall are a little different. A promoted interest is an advance given to the GP on the LP’s profit after the initial waterfall payments of the preferred return and capital investments are made. The remaining profits would be split according to the pro-rata capital investments, but the promoted interest allows the GP to take a negotiated percentage of the LP’s stake as well. Key Learning Points: • Carried and promoted interest arrangements give the GP a greater split of the profits than their pro-rata capital investment • PE firms usually couple this carried interest with a management fee to manage the invested funds of the limited partners • To entice LPs into funds or transactions, the GP will offer the LP a preferred return or hurdle rate that must be achieved before the GP can begin receiving a return • A carried interest is calculated on the remaining profits after achieving the preferred return or hurdle • Promoted interests work in a similar way but the promote is calculated as a percentage of the LP’s share of the profits after the preferred return or hurdle Download our free private equity resume template: https://shorturl.at/WzAEj

Argentina DEFAULT 2024. Sergio Massa to work for US investment fund Greylock Capital Management Sergio Massa seems to start in March heading in a different direction. He will work on 10 projects for Greylock Capital Management, a US investment fund that played an active role in the 2020 restructuring the country’s defaults debt. Sources from Massa’s party confirmed last week that the former economic minister and unsuccessful Unión por la Patria presidential candidate will be working for Greylock Capital, though not on topics linked to Argentina. “He works for Greylock but he can’t work in Argentina. He was assigned 10 projects dealing with the real economy. In order to comply with the public ethics law, he could almost not work anywhere in the country,” they argued. Rumor's of Massa working for an investment fund were already circulating in late November 2023, after he lost the presidential race. According to information published by Forbes magazine at the time, the most interested party was “Renaissance Fund” – a subsidiary of Greylock Capital Management, which is headed by its founding partner Hans Humes, a veteran Argentina investor. By then, Humes, CEO of Greylock, mentioned the now former economy minister and stated: “We believe he would be a great addition for us. We know other institutions have been talking to him about future opportunities. But given the unique structure of our fund, we’re sure it’s the optimum adjustment for someone with his skills.” The declarations of a chains of DEFAULTs in Argentina provinces is the indication that the economy would crash on next weeks. The hurry to hire the former economic minister Sergio Massa would provide the accurate details and best strategies to hedge founds in the USA. But the delicate part is the total lost of the invested money in scenarios of sovereign debts restructuration's with strong capital cut. In the debts restructuration's of 2005 and 2010 private investors lost the 90% of the invested capital in Argentina. To wait and see dollarizing portfolios is the best safe strategy for Argentina. The country is facing a political and social turmoil caused by the broke central bank BCRA and the lack of enough dollars for the imports and payments of foreign suppliers. Such situations of insolvency triggers the defaults the unemployment and foreclosure of local companies facing delinquencies and bankruptcy. Yes the same stories from the past economic DEFAULT crises repeats again in Argentina.

The landscape of business financing is diverse, involving banks, venture capital firms, private equity firms, and development finance institutions. Here are some of the top business financers in the world across these categories: Banks JPMorgan Chase & Co. - A leading global financial services firm offering solutions in investment banking, financial services for consumers and businesses, financial transaction processing, asset management, and private equity. Bank of America - A multinational investment bank and financial services company, providing a wide range of banking, investing, asset management, and other financial and risk management products and services. HSBC Holdings plc - A British multinational investment bank and financial services holding company, which offers financing solutions for businesses globally. Venture Capital Firms Sequoia Capital - An American venture capital firm primarily focusing on technology startups, with investments in companies like Apple, Google, Oracle, and LinkedIn. Andreessen Horowitz - A private venture capital firm that provides seed, venture, and growth-stage funding to technology companies. Accel Partners - A venture capital firm that invests in early-stage and growth-stage companies, especially in the technology sector. Private Equity Firms The Blackstone Group - One of the world’s leading investment firms, specializing in private equity, credit, and hedge fund investment strategies. The Carlyle Group - A global investment firm with expertise in private equity, real assets, and private credit. KKR & Co. Inc. - A global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, and credit. Development Finance Institutions International Finance Corporation (IFC) - A member of the World Bank Group, the IFC provides loans and equity investments to promote private sector development in less developed countries. European Investment Bank (EIB) - The EIB provides finance and expertise for sustainable investment projects that contribute to EU policy objectives. Asian Development Bank (ADB) - A regional development bank that promotes social and economic development in Asia by providing loans, technical assistance, grants, and equity investments. These institutions play crucial roles in financing businesses at various stages of development, from startups to large enterprises, across multiple sectors and geographies.

The British Business Bank announced a £660 million investment fund for the North of England to be known as  "Northern Powerhouse Investment Fund II" on 21 March 2024. Funding will be available to businesses in that region in the form of "smaller loans" (£25,000 to £100,000). "debt finance" (£100,000 to £2 million) and "equity finance" up to £5 million. This funding will be chanelled through local fund managers and venture capital intermediaries and this article identifies the appropriate type of finance for each need and the relevant intermediary, It also points out that lenders and investors will expect the businesses they support to obtain appropriate legal protection for their brands, product designs, technology and creativity and it focuses on how members of the IP Bar such as I can help businesses to secure such protection. It also outlines how we can be approached. The British Business Bank has invited me and other professionals to one of 6 roadshows around the region to celebrate the launch of the fund and this article provides links to the registration card for each of these events. https://lnkd.in/eC25mfyg

What is Private Equity? Private Equity (PE) refers to investments made in private companies, or in public companies with the intention of taking them private. PE firms raise capital from investors, such as pension funds, endowments, and family offices, to invest in businesses, often with the goal of eventually selling them for a profit. Key characteristics of Private Equity: 1. Private ownership: PE firms invest in private companies or take public companies private. 2. Long-term focus: PE firms typically hold investments for 3-7 years. 3. Active ownership: PE firms often take an active role in guiding the company's strategy and operations. 4. High-risk, high-reward: PE investments can be risky, but also offer potential for significant returns. Types of Private Equity: 1. Venture Capital (VC): Early-stage investments in startups and growth companies. 2. Growth Capital: Investments in mature companies to fund expansion or acquisitions. 3. Leveraged Buyouts (LBOs): Using debt to finance the acquisition of a company. 4. Distressed Investing: Investing in companies facing financial difficulties. 5. Mezzanine Capital: Providing subordinated debt or preferred equity to companies. Private Equity firms: 1. Raise capital from investors 2. Invest in private companies 3. Work with portfolio companies to improve operations and strategy 4. Exit investments through sale, IPO, or merger Benefits of Private Equity: 1. Access to capital for companies 2. Expertise and guidance from PE firms 3. Flexibility in investment structure and duration 4. Potential for high returns for investors However, Private Equity also involves risks, such as: 1. Illiquidity 2. High risk of default 3. Lack of transparency 4. Dependence on debt In summary, Private Equity involves investments in private companies, often with the goal of eventually selling them for a profit. PE firms raise capital from investors and work closely with portfolio companies to improve operations and strategy. While PE offers potential benefits, it also involves significant risks.

#Business owners (whether #traditional or #startup #founders) can enhance #investment #yields by better #cash #management (or #working #capital management). There are ample #wealth solutions to capitalise on these temporary (or core) #surpluses which a business generates. My article on moneycontrol.com dwells on this often-neglected opportunity. Fission Wealth Preeti KulkarniKayezad Adajania https://lnkd.in/dn9N2_gJ