Bankers, not wanting to give up the high
returns that make them more competitive, attract more deposits and drive their
public share price, are now investing a portion of their retained earnings (not
their customer deposits) with smart and savvy individuals, who form themselves
into a private equity company. This allows bankers to conform to stronger
global regulations and retain those superior investment returns. Private Equity
business provides that “Chinese wall” separation of banking operations and the
high risk – high return portion of sophisticated investors’ portfolio.
Today’s asset managers are required to have
not just financial skills, but also understanding of environment, technology,
governance and regulation, all of which impact the risk-return profile of
assets. PE will have the technology, skills and experience to successfully
manage assets in this market.
The vision is
therefore to become a world class
investment holding company operating in the Caribbean region, supporting
business entities with successful and sustainable business models.
Private
Enterprises (PE) Limited
seeks to generate superior returns on secured investment funds, by using these
funds mostly as equity financing in targeted opportunities, led by a strong
management team and demonstrating a sustainable business model, with the
intention of realizing gains through various exit strategies,
as its primary mission.
This proposed company, registered in the Caribbean region, buys or
issues shares in privately held companies, on behalf of the Private Enterprises
Fund (PE Fund), with the intention of applying strategies to improving
efficiencies that would increase the value of those particular companies’
shares. Further gains in PE Fund’s
issued unit value will be realized by offering a determined percentage of those
particular company shares for sale to the public, via an appropriate stock
market as an Initial Public Offering (IPO) or to other private investors, including
management, or employing other suitable exit strategies.
PE
is a private equity management company whose
primary goal is to seek superior risk adjusted investment returns. PE will be
responsible for managing the Private Equity Fund (PE Fund) and will receive an
annual management fee, subject to periodic changes but based on industry norms,
of two (2%) percent plus twenty (20%) percent of the annual profits of the
fund. PE target is a net IRR of fifteen
(15%) percent (turns $1 million into $2 million in 5 years). PE invests in a
well diversified portfolio, targeting business that have the potential for
growth and can provide a superior rate of return. Also, PE will generate additional revenue by
providing direct professional services to PE Business/Projects as appropriate
to support the overall investment.
PE will invest no more than five (5%) percent of PE Fund into any one investment and no more than
ten (10%) percent into any one industry. PE Fund will have equity positions in proven PE Business/Projects, with clear
revenue streams and benefits to be gained from exploring synergies and
strengthening management. The PE Fund
will have a mix of investments, outlined and reported on quarterly, that will
include low risk investments (Government Treasuries and Bonds) as well as
equity investments in both publicly traded (listed) and privately held
(unlisted) companies.
PE may engineer or participate in
syndications, and PE activities will be guided
by and subject to its Investment Manager contract
with the current PE Fund-holders. PE Fund
capital is used to finance product, market and operations development of
selected business. PE also manages information resources to leverage PE owned
activities and those of PE service providers and other partners. PE expertise
in financial engineering and business analysis and PE experience in reviewing,
working in and working with dynamic business are important skills required to
successfully select and mentor the PE Fund portfolio.
PE Fund’s investment universe is wide to
enable an appropriate risk diversification strategy, and PE will select and
nurture business managers and entrepreneurs that are building
sustainable enterprises. PE
considers many dimensions of a business as well as the value of time and
capital; capital structure, strategic positioning, operating financials,
operations management, customer value, community benefits, product evolution
and market flexibility. This qualitative evaluation results in quantification
of investment risk and return.
