2. ASSET MANAGEMENT
Asset Management refers to the professional management services
of investments in any form as stocks, bonds, JV’s, Partnership
along with real estate. Asset Management activities aimed at
maximizing the value and return of the fund's investments, by
identifying measures enabling strategic asset management.
Asset Management plays important role during the investments and
managing post investments and allows to make rapid investing
decisions without constantly consulting with an Investor. This
results in a higher return on the assets than could be achieved
conventionally.
3. ASSET MANAGER
Asset manager works both for asset management company and for the
investor and also for the owner of assets. It is a very challenging and
responsible work as actually a manager takes care about money of his
investors.
Roles & responsibility includes:
Pre investments
Feasibility Analysis
Finalization of SHA
Post Investments
Types of Funding
Preparation of Investments Overview report
Project Monitoring
Compliance & Variance Analysis
Updating Financial Models & Business Plan’s
Investment Reporting
Disposition of Investments
Risk Management & CMT
4. ASSET MANAGER
Roles & Responsibilities
Feasibility Analysis
Minimum
Criteria of
an Investment
Technical Financial Site Visit
Due Diligence
Financial Due
Diligence as
per
documents
provided
Technical
Due diligence
as per
documents
Investee
Company
Assessment -
Capability
Management
Internal
assessment
and AM
prepares
initial
investments
reports till
Term Sheet
Reporting to investors as one of the potential projects for an investment and preparation &
finalization of Term Sheet
5. FINALIZATION OF SHARE HOLDERS AGREEMENT (SHA)
Finalization of Share Purchase & Holder’s Agreement
Execution of an SHA & SPA is done with the Lawyers ,investors and Fund Managers
Investment Recommendation
Final Investment Recommendation by Asset Manager
Finalization - External Consultants (Legal , Taxation, Title, Top 4 Consultant’s and Sector Specific Consultants)
Financial
model
Business
Plan
Structuring
of Deal
Condition
Precedent's
Downside
protection
Investor
rights
Exit
Strategies
Reporting
Preliminary Investment Recommendation by Asset Manager
6. Asset Manager prepare all the necessary lists of Compliances
before funding
Asset Manager's approval before investments
- All Statutory Compliance are met
Full investments at one tranches
Copy of Remittance received by Asset Manager
from bank and Investee Company is mandatory
The Investment declaration is required every
year from Investee Company and Asset
Management collect and send to Statutory
Auditor
Multiple Tranches
Asset Manager approval is required before
funding. The approvals are subject to fulfillment
of Compliances / CP. Copy of Remittance received
by Asset Manager from bank and Investee
Company is mandatory.
The Investment declaration is required every
year from Investee Company and Asset
Management collect and send to Statutory
Auditor
TYPES OF FUNDING
7. INVESTMENTS OVERVIEW REPORT
Financial
Model
Summary of all key
assumptions and
quarterly cash
flows and status
details on each
project
Business
Plan
Summary of key
points of business
activities
Details of
Investee
Company
Details of Office
address, contact
number of all key
employees .
Project
Details
Project details
Amount Invested
Project Location
address
Mrket Research
Project Employees
details
All Financial,
Technical , BOQ
details
Regulatory
/
Compliance
Annual Filling with
Company Law
Board, Director
declaration,
Investment ,
Project declaration,
Foreign Exchange
Regulatory Board,
Annual Tax Filling
and Audited
Financials
8. Internal Compliance Report – Investee Company
Drag & Tag along
Downside Protection
Exit Scenario
Buybacks
Strategic Sale
IPO exit
Dividend Distribution
Investee Company Rights
Investor Rights
Super majority Provisions
Dispute between the parties
Breach provision
Remedy
Process of filing notice
Arbitration
Downside protection
Rights of Board of Directors & meetings
Nominee Directors & alternative directors
Investor valuation
Access of Investee company documents
Written information on conducting meetings
Investors protection
indemnity
Liability Clause
impact of change in regulatory laws
External consultants valuation drop by 10% in IRR, then rights of Investors
Change in original Business plan by 5%
Related party Transactions (RPT)
Approval for purchase of any fixed assets and or new recruitments at senior level higher than vice president level
Site Visit by Asset Manager or any representative investors
Key Corporate Governance
Current regulators laws
Foreign Exchange policy
Tax Structuring
Company Structuring
Company law’s
Federal Reserve bank policy
INVESTMENTS OVERVIEW REPORT
9. PROJECT MONITORING
CONTINUOUS BASIS
Reporting – Monthly & Quarterly
Investor
Status update
Financial Update
List of Compliances and non compliance and its likely impact
Variance Analysis
Internal Assessment of valuation on QoQ basis.
Possible Remedy
Internal
AM Internal Assessment
Proposal for possible changes in the reporting as per current scenario
Compliance Analysis
With SHA on monthly basis
Regulatory requirements
Monthly detailed list of non compliance issues and its likely impact on return
Variance Analysis
With SHA on monthly basis
Updating Financial Models & Business Plans as per current scenario
Current status vs. original business plans
Status of variance level - highlight the level and likely impact on return
Color Coding
10. PROJECT MONITORING
CONTINUOUS BASIS
Variance Analysis
Financial Analysis of Investee Company
Cash Position -Status of variance level - highlight the level and likely impact on return
Related Party Transactions
Conversion Ratio
Sales / Revenue Mismatch
Expenses / Cost mismatch
Level of Debt – Tied ups and Sanctioned
Accounting policy
Adherence with Regulatory laws – Annual or half yearly fillings
Foreign Exchange Monetary Authority
Auditor – As per company law, all the companies are required to appoint
Statutory Auditor – For the purposes of audited financials
Internal Auditor
Company Law Board regulations on Annual basis
Annual Filing
Director Declaration
Investment Declaration from Investor and Investee Company
Financials
Board Minutes details and AGM details
11. PROJECT MONITORING
CONTINUOUS BASIS
Reporting on – Variance & Impact Analysis
Color Coding
Suggestions – Nominee Director and investor for corrective measures
Act as a Trouble Shooter for an Investors
Preparation of comprehensive non compliance report
Analyze and work on SHA provisions
Work Closely with Investee Company for recovery of IRR or returns
Plays more active roles in day-to- day operations of Investee company
Work closely with Investee company on changes in original business
plan due to
Negligence
Related Party Transactions
Intentionally delay
Fund transfer to another company
Ask for more % shareholding in the company or get some
clarification or prioritize water fall mechanism
Work on amendment SHA
12. PROJECT MONITORING
EXIT ROUTE
Prepare a comprehensive report for an Investors approvals on different kinds of
exit strategies and with time horizon and possible IRR.
Market assessment of Property valuation and list of potential interested buyers
Pre pare Exit Strategy note for potential buyers
Two pager teaser summary sheet
Investment presentations & note
Site visits
Due diligence
Finalization of Sale price and sale execution documents
Exit Route will incur a possible cost and define the right consultants to execute
the deals
Transaction Cost
Brokerage Fees
Legal Fees
Performance fees
The Possible route of exit route can be:
Buybacks of Shares
Strategic sale to third party
Dividend distribution
Profit sharing
IPO
At the time of Listing of shares
Or sale of shares in secondary market
