While we are not looking to cut corners on due diligence, we are looking to fast track the allocation process, so that we can take advantage of a market which has been beaten to shreds
Zurich (PRWEB) January 5, 2009
Indicative of the positive spin-off which the market pullback is creating, Finvest Asset Management recently announced that it has been awarded a $2.5 billion allocation for investment in private equity. The impact of the recession, negative sentiment, and the credit crunch, have created significant value opportunities. This allocation comes in the wake of an award to Finvest last year for $300 million which will be separately dedicated to a Fund of Funds, and which has progressed positively.
The private equity initiative is being launched at a time when most economists are predicting a protracted recession, which will ultimately be of further impact to emerging markets. The $2.5 billion capital allocation to Finvest is being made by a European family office which has an existing relationship with the asset management firm, and which is seeking to increase its exposure in the private equity space.
Allocations for the new private equity fund, will be made through private placements. Companies which are listed on the main boards in Northern American and European markets, will be targeted. The fund will seek to allocate capital to between 25 and 100 companies, with each allocation ranging in a value of between $10 million and $250 million. The new fund's time horizon will be between 3-5 years, although liquidity will be an important criterion assessing risk. Companies below a $200 million market capitalization will not be discounted, however, the fund will be favorably disposed towards companies with higher market capitalization levels, and which exhibit a high percentage of outstanding shares. The model which is being applied by Finvest is slightly different to the typical private equity structure, which generally would consider stakes in private companies which are not listed and perhaps seek to extract value through an IPO.
The team at the Finvest Private Equity fund indicated that their due diligence turn around period is quite aggressive. "While we are not looking to cut corners on due diligence, we are looking to fast track the allocation process, so that we can take advantage of a market which has been beaten to shreds," said Finvest portfolio strategist Mayer Greenwald.
Greenwald elaborates, "We do not have an agenda to take control or necessarily secure a controlling interest in the firm. We typically would base an interest in a company on the fact that management know what they are doing, and understand their area of endeavor better than others. Our philosophy is to provide company management with additional capital, and give them the opportunity to continue running with the ball. Obviously, we appreciate regular feedback on progress or challenges which are being faced in the industry."
The launch represents an exciting opportunity for listed companies who believe that additional capital will add significant impetus to their growth. Finvest is in current discussions with several companies which have expressed interest in receiving a capital allocation.
Finvest Asset Management
Harry Rogers, +41442083164
About Finvest Management:
Finvest Asset Management is an alternative asset management firm that aims to provide superior portfolio management and risk management solutions to non-US institutions and high net-worth clients.
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