ACG Presentation for the Citizenship by Investment & International Residence Conference (Oct. 30th-31st 2013)

456 views
351 views

Published on

A presentation delivered by Aginsky Consulting Group (ACG) at "Citizenship by Investment and International Residence" Conference in London on October 30th-31st, 2013. ACG was a silver sponsor of the event. In this presentation ACG discusses the EB-5 Program, a government sponsored program which allows foreign investors to gain access to U.S. residency in exchange for an investment of $0.5M-$1M, focusing on the direct investment route.

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
456
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
13
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

ACG Presentation for the Citizenship by Investment & International Residence Conference (Oct. 30th-31st 2013)

  1. 1. EB-5 Direct Investments: The Road Less Traveled Citizenship by Investment & International Residence London, UK - October 30th – 31st, 2013
  2. 2. Presentation Outline  Global immigration trends  Why the U.S.?  EB-5 today  ACG & EB-5  Implications for immigration professionals October 30th-31st, 2013 www.aginskyconsulting.com 2
  3. 3. October 30th-31st, 2013 www.aginskyconsulting.com 3
  4. 4. Global Immigration Trends 4.5% 25.4% 25.6% 49.7% 26.9% 3.6% Source: United Nations Department of Economic and Social Affairs, Population Division, “Trends in International Migrant Stock: Migrants by Destination and Origin” April 6th, 2013 www.aginskyconsulting.com 4
  5. 5. October 30th-31st, 2013 www.aginskyconsulting.com 5
  6. 6. Why the U.S.?  Safe-haven for long-term investments  Current economic environment: “buyers market”  Stability  Free enterprise protection  Top education and healthcare services April 6th, 2013 www.aginskyconsulting.com 6
  7. 7. October 30th-31st, 2013 www.aginskyconsulting.com 7
  8. 8. EB-5 Today – Visas Issued 8000 7,641 954 109 447 Number of visas issued 6000 Other Venezuela 4000 2000 3,463 1,885 589 135 295 562 117 254 South Korea 6,131 China Total 2,530 866 0 2010 October 30th-31st, 2013 2011 www.aginskyconsulting.com 2012 8
  9. 9. EB-5 Today - Regional Centers  Influx of players due to low barriers to entry:  17x increase in the number of Regional Centers over the past 5 years  325 registered Regional Centers today  Fraud and SEC compliance issues:  There is a growing sense of distrust towards Regional Centers, in light of the recent IRCTC scandal  Increased USCIS scrutiny:  I-924 acceptance dropped from 68% to 36% in 2012  The tenant occupancy issue October 30th-31st, 2013 www.aginskyconsulting.com 9
  10. 10. October 30th-31st, 2013 www.aginskyconsulting.com 10
  11. 11. Investor Options (Alternatives to RCs)  Competing immigrant-investor programs overseas  Other Visa Categories (L-1, E-2)  EB-5 Direct Investment October 30th-31st, 2013 www.aginskyconsulting.com 11
  12. 12. Alternatives - Direct Investment October 30th-31st, 2013 www.aginskyconsulting.com 12
  13. 13. October 30th-31st, 2013 www.aginskyconsulting.com 13
  14. 14. ACG EB-5 Service Offering: A One-Stop Shop Exit Strategy and Execution New Entity Formation Immigration Legal Support (if necessary) Matter of Ho Business Plan Post Acquisition Business Management October 30th-31st, 2013 Investment Opportunity Identification Due Diligence ACG Escrow/Closing www.aginskyconsulting.com Negotiations and Deal Structuring Corporate Legal Support 14
  15. 15. October 30th-31st, 2013 www.aginskyconsulting.com 15
  16. 16. Phase I: Information Gathering & Client Interviews Client: Mr. Smith ACG Collected information  Financial information verification  Mr. Smith’s Investment Criteria Investment objectives: Green card, safe investment, returns Investment size: ~$1,500,000 October 30th-31st, 2013 www.aginskyconsulting.com 16
  17. 17. Phase I: Information Gathering & Client Interviews Mr. Smith’s Investment Criteria (continued) Risk profile: Conservative Timeline Green card as soon as possible Exit within 3-4 years of investment Any other specific criteria: Majority control of the investment Phase I Timeline: 1-2 weeks October 30th-31st, 2013 www.aginskyconsulting.com 17
  18. 18. Phase II: New Entity Formation  “NewCo LLC”  Mr. Smith owns 100% membership stake in NewCo LLC  Mr. Smith hires ACG as a Manager for NewCo LLC Phase II Timeline: 1 week October 30th-31st, 2013 www.aginskyconsulting.com 18
  19. 19. Phase III and IV  Phase III: Market monitoring & long list  ACG provides Mr. Smith with a customized list of available deals  Deliverables: ACG Dealbook  Phase IV: Short list  ACG works with Mr. Smith to narrow down to 1 or 2 deals that will work best for him Phase III & IV Timeline: 3-4 weeks October 30th-31st, 2013 www.aginskyconsulting.com 19
  20. 20. Selected Deal: Commercial Janitorial Service Company • • • • Total investment size: $1,500,000 Expected number of new jobs: 24 Projected ROI: 26.5% Expected Exit: 3-4 years October 30th-31st, 2013 www.aginskyconsulting.com 20
  21. 21. Company Overview  Founded in 1995  Services include janitorial services, floor care, supply sales, related services to commercial customers  Markets: Oregon, Washington, and Arizona  Clients include the likes of AT&T, Parr Lumber, Union Pacific Railroad, Leading Regional Property Management Firms  Award-winning company October 30th-31st, 2013 www.aginskyconsulting.com 21
  22. 22. Financial Summary 2010 Revenue 2011 2012 2013* $1,906,939.00 $1,636,755.00 $1,707,474.00 $1,939,514.00 $387,767.00 $365,385.00 $377,684.00 $398,362.00 Net Cash Margin 20.3% 22.3% 22.1% 20.5% ROI 25.9% 24.4% 25.2% 26.6% Cash Flow *2013 forecasts are based on existing customer contracts October 30th-31st, 2013 www.aginskyconsulting.com 22
  23. 23. Pre-acquisition Org Chart Owner Total Employees: 12 Business Manager (1) Operations Manager (1) Office Manager (1) Janitorial Staff (9) October 30th-31st, 2013 www.aginskyconsulting.com 23
  24. 24. Phase V: Due Diligence ACG verifies all the claims made by the company  Financial, legal, personnel, and business due diligence  Deliverable: Due-diligence Report  Phase V Timeline: 4-6 weeks October 30th-31st, 2013 www.aginskyconsulting.com 24
  25. 25. Phase VI: Negotiations and Closing  ACG negotiates and structures the deal for NewCo LLC  Reducing price by 23% ACG works with the corporate lawyers to draft and finalize all the contracts for the transaction  Immigration attorney contract review  Escrow/Closing  Phase VI Timeline: 2-4 weeks October 30th-31st, 2013 www.aginskyconsulting.com 25
  26. 26. Phase VII: Ongoing Management Day-to-day operations  Key strategic decisions  Geographic expansion  New service/product launch  Strategic business development   Human resources management Job creation  Strategic hiring  Regulatory/tax compliance  Quarterly reports to investor  Budgeting/forecasting  October 30th-31st, 2013 www.aginskyconsulting.com 26
  27. 27. Post Closing: EB-5 Application  ACG’s responsibilities:  Draft a “Matter of Ho” compliant business plan for NewCo LLC  Work with the client’s immigration attorney or recommend an immigration attorney if the client does not have one  Assist with I-526 application EB-5 Application Timeline: 4-6 weeks October 30th-31st, 2013 www.aginskyconsulting.com 27
  28. 28. New Job Creation (post acquisition)  Business plan outlined growth strategy and job creation time table All senior hires were made first  Salesmen (4 new hires)  Contractor conversion (8 conversions)  New janitorial staff for new accounts acquired (11 new hires)   Initial hires were funded by working capital reserves and existing cash flow October 30th-31st, 2013 www.aginskyconsulting.com 28
  29. 29. Organizational Transformation Pre - Acquisition Owner Business Manager (1) Operations Manager (1) Post - Acquisition Pre-acquisition # of employees: 12  Post-acquisition # of employees: 36  New jobs created: 24  October 30th-31st, 2013 ACG Oversight Senior Management (4) Office Secretary (1) Janitorial Staff (9) EB-5 Investor(s) Sales Force (4) www.aginskyconsulting.com Janitorial Staff (28) 29
  30. 30. Phase VIII: Exit Strategy and Execution  Apply for I-829 (condition removal)  ACG will work with Mr. Smith and the immigration attorney to file the application Mr. Smith decides to sell NewCo LLC after receiving approval of the I-829  Exit strategy execution (Phase VIII)  ACG will prepare the offering documents to place NewCo LLC in the market  ACG will work with interested buyers through the entire selling process  Exit Timeline: 5-9 months October 30th-31st, 2013 www.aginskyconsulting.com 30
  31. 31. Summarized Process and Timeline Phase I. Information gathering and client interviews Phase II. New entity formation Phase III. Market monitoring and long list Phase IV. Selection process – short list Phase V. Due diligence Phase VI. Negotiations and contract signing PROJECT TIMELINE OF PHASES I-VI: 11-17 weeks Phase VII. Post-acquisition management (Ongoing) Phase VIII. Exit Strategy and Execution EXIT TIMELINE: 5-9 months after approval of I-829 October 30th-31st, 2013 www.aginskyconsulting.com 31
  32. 32. Comparative Analysis: RC vs. DI Metrics Direct Investment Regional Center Business Control 100% control No control Number of Options Virtually unlimited Very limited Involvement Level Passive/Active/Hybrid (options) Passive only (no options) Transparency Full Limited Brokerage/ Admin fee 4% to 6% 5% to 10% Liquidity Liquid Illiquid Business Expansion Optional Not an option Returns 12% to 30% 0% to 1.5% Risk Low High October 30th-31st, 2013 www.aginskyconsulting.com 32
  33. 33. Advantages of Direct Investment – Lower Risk  Reduced risk – why?  Business track-record  Existing cash-flow  Direct job creation, easy to demonstrate  Ability to bridge any job creation deficit with existing cash-flow  Perfect alignment of stakeholders’ interests  No leverage required October 30th-31st, 2013 www.aginskyconsulting.com 33
  34. 34. Direct Investment October 30th-31st, 2013 www.aginskyconsulting.com 34
  35. 35. October 30th-31st, 2013 www.aginskyconsulting.com 35
  36. 36. Direct Investments – A New Tool for Immigration Professionals  To capture new clientele and capitalize on this emerging opportunity: Know of EB-5 investments taking place outside Regional Centers  Understand the process and structure of these transactions  Expand your network of partners and affiliates to include professionals experienced in structuring EB-5 direct investments  October 30th-31st, 2013 www.aginskyconsulting.com 36
  37. 37. Closing remarks  The EB-5 landscape is quickly changing: Emergence of a more a robust and dynamic alternative to Regional Centers  As service providers, we must adapt and be at the forefront of the industry to better assist clients   The underutilized direct-investment route will be key to maintaining the EB-5 program’s momentum! October 30th-31st, 2013 www.aginskyconsulting.com 37
  38. 38. October 30th-31st, 2013 www.aginskyconsulting.com 38
  39. 39. October 30th-31st, 2013 www.aginskyconsulting.com 39
  40. 40. Contacts U.S. HEADQUARTERS Office: +1-503-546-4049 Fax: +1-503-549-8990 info@aginskyconsulting.com 411 NW Park Ave., Suite 402 Portland, OR 97209, USA INDIA OFFICE Office: +91 11 41207155 acg-india@aginskyconsulting.com 21, Nehru Place Greens, Suite 602 New Delhi, 110019, India www.aginskyconsulting.com October 30th-31st, 2013 www.aginskyconsulting.com 40

×