Wednesday, December 1, 2010

The DASPV Way To Build An Investment Portfolio Of Private Businesses

The DASPV Way To Build An Investment Portfolio Of Private Businesses ; Looking to invest into the private equity sector can be very profitable and offer very significant returns, but you have to remember that it is also a very high risk investment strategy.

You should make sure that the businesses meet a strict set of criteria before investing. Here is a list of criteria recommended by businesses acquisition experts such as the DASPV Fund, Robert Wildmore and John Whiteman.

14 Point Criteria
1. Investee company capable of being acquired by DASPV as an Undervalued Asset
2. An investee company will be strongly led by a committed entrepreneur who is driven to achieve success within the business.
3. The business must have a strong and capable management team
4. The business must have robust, documented and effective management systems
5. The businesses must operate within market sectors, which are growing or expected to have significant future growth and development potential.
6. The businesses will be expected to be leaders within their chosen fields and to have defining characteristics which set them aside from their competitors, giving them competitive advantage.
7. The businesses must themselves have a compelling and achievable business proposition, which must appeal to their chosen markets. They must have the ability to adapt.
8. The management of the businesses must operate them under the framework of sensible financial controls combined with external assessments.
9. Significant upside supported by a robust business plan
10. The business must be capable of change or expansion
11. A track record of profits and/or positive cash flow
12. A need for capital injection to release full growth potential
13. A scalable business model
14. A business with good track record with existing clients and no adverse pending litigation

INVESTMENT OBJECTIVES

1) To minimise investment risk by investing in a diverse portfolio of companies where appropriate
2) To invest in undervalued assets whose value can be increased by the provision of capital, management advice and strategic board direction
3) Create significant shareholder value for DASPV members by identifying companies with global potential and high upside
4) To focus on acquiring distressed assets often via a post insolvency process and timely exit strategies.
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