A high caliber Investment Professional with an experience amounting over 30 years, majorly across various facets of Investment.
Fund Document Content
Private Placement Memorandum
1 Executive Summary
2 The Opportunity
2.1 Why Private Equity
3 Industry and Market Analysis
3.1 World Economic Outlook
3.2 Global Healthcare
3.3 Industry Dynamics
3.4 Health Tourism
3.5 The Competitive Environment
3.6 Current Supply
3.7 Current Demand
3.8 Future Supply
3.9 Future Demand
4 The company
5 Investment Strategy
6 Investment Process
6.1 Deal Sourcing
6.2 Investment Analysis and Approval
6.3 Deal Structuring
6.4 Post-Acquisition Monitoring
7 Fund Structure
7.1 Fund Establishment_
7.2 GP/LP Terms and Agreements
8.1 Risk of Low Capital Commitment
8.2 Consequences of Default
8.3 Limited Track Record
8.4 Potential Market Volatility
8.5 Investment Selection Risk
8.6 Dependence on General Partner and Fund Manager
8.7 Limited Transferability of Investments in the Fund
8.8 Availability of Suitable Investment Opportunities
8.9 Political Climate
8.10 Regulatory risk
8.11 Exchange Rate Risks
8.14 Legal Regimes, Accounting, Disclosure and Regulatory Standards
8.15 Factual Statements
8.16 Conflicts of Interest
8.17 Sector Risk
9 Subscription Process
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Private Placement Memorandum Structure
Private Placement Document
This document is basically presented to Qualified Investors. This document is about company’s plan, profitability and risk associated with it and legal status. This is most important document given to the investors, usually by the Investment Company who is managing and promoting the company.
Private Placement Document is also called PPM Document. The document is prepared by excerpt Investment Bankers. It is responsibility of the company developing PPM to raise funds/place the equity in the market.
PPM can be of different Types
- PPM for Company Raising Equity
- PPM for Investment Funds
- PPM for Debt Funds
- PPM for Startups
PPM for companies raising Equity is easiest. It is simple structure, only the equity of the company is raised, the catch is at what value. The face value of Each share is if 1 Dollar, at what price it is sold to the investors. The important is how to convince the investors, they will make huge returns when they invest and company grows.
There are Pre IPO Placements and then IPO and investors make huge profits.
Those who invest in Startups, early staged company, risk is high, waiting is long but return is also very high and great. It can go to 10 times to 100 times over the time. Usually only 2 to 3 Startups make to this level, or make it to the list of successful startups.
Structuring of Funds
The second most important part of PPM is its Structure of Fund. There are two types of Funds Debt Fund and Equity Funds. Some Funds Are Sector Specific, some of them are Region Specific also. The choice of the Fund’s criteria of investment is depend upon opportunity, ROI and expertise of Fund manager.
The Fund Structures depends upon the Fund Managers Expertise, there are Conventional Fund and Shariah Compliant Funds
Exchange Traded Fund
Private Equity Funds
Shariah Compliant Funds
Open Ended Funded
Time Bound Fund
Private Equity Fund, their Structure and Domicile
This is single biggest category of Funds. They are usually domicile of Tax Friendly Countries/Tax Heaven and where compliance is simple and easy.
They can be Caribbean Island
Or other free zone structures where compliance is minimum.
The Structure of Fund
The Usual structure is LLP (Limited Liability Partnership). There are other structures also but this is most commonly used structure.
There are two Part of the LLP Fund Structure.
- GP – General Partner, these are Promoter of Fund and mainly responsible for developing fund, initially investing in it and then managing the fund. Usually Fund Manager is one of GP along with key investors or developer of Idea are come together to develop fund. They get most of the money as Profits and fees. They have ultimate say and power to manage fund.
- LP – Limited Partners are investors. They invest for profit. They do not have any say in management or investment of Fund.
There can be different Types of Shariah Compliant Fund.
- Waqala Fund
- Mudarbah Fund
- Musharakah Fund
They are different structures as needed.