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Global Trends In Money Management: Guide To Increase The Efficiency Of Capital Usage

The focus must be on long-term value creation and not on capital "extraction". Therefore, the PCVs must be structured to incentivise the operators to maximise long-term value and not focus on merely creating large investment vehicles to generate high fees.

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As the capital markets and businesses in India evolve, winners and losers in highly competitive markets will get determined by a variety of factors, including sources of funds. Pixabay

Global trends in money management and business efficiency are a useful guide to build and scale Indian businesses, especially to increase the efficiency of capital usage.

The one trend that has been in focus throughout the asset management industry, especially the private equity world, has been that of “permanent capital”. This is broadly defined as access to funds for long periods, instead of the usual seven to ten-year fund horizon that has been the norm in the private equity industry. Permanent capital funds focus less on exiting investments in a defined period – and the emphasis is more on generating potential long-run investment returns.

Investors have generated permanent capital through a variety of strategies. Some large investors such as the likes of Blackstone, Apollo & KKR have utilised Initial Public Offerings (IPOs) to generate capital they can then invest strategically. Apollo has also generated permanent capital through investing and managing assets for a retirement solution focused annuity business called “Athene”, which, through its annuity business, generates significant cash that Apollo has utilised to generate returns.

Access to a constant pool of capital has helped boost returns for both the capital provider and capital allocator.

The essential point to learn is that a higher degree of permanent capital allows businesses to access opportunities for longer time-periods, ride out periods of high market volatility and, most importantly, acquire assets at attractive valuations when rivals are unable to do so due to unfavourable market conditions or internal distress.

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To frame the argument differently, firms that can have greater permanency to their capital or can unlock sources of permanent capital will have distinct advantages over their rivals. Pixabay

The lessons and advantages from permanent capital apply as much to companies as they do to asset managers. The vital question businesses must ask is whether they are building sources of permanent capital or, even better, are they improving the stability of cash flows available to the business – especially with a view on the next market downturn.

For a company or conglomerate, “permanency” of capital can be obtained through access to businesses that provide stable incoming cashflows. For instance, a firm focused on high-risk-return projects in the biosciences field must continuously evaluate whether it has a portfolio of royalty-generating patents that provide it with mission-critical capital inflows.

As mentioned earlier, in market downturns, stable cash flows can help shield businesses from the adverse funding conditions and assist a company in acquiring valuable assets across the industry. Most importantly, the steady incoming cash flows that provide the permanency of capital can assist a firm in continuing to pursue the high-risk-return projects that may yield significant investment returns in the future.

In a world where factors such as specialisation, patents and vertical integration can provide competitive advantages to firms, so can greater access to permanent capital. To frame the argument differently, firms that can have greater permanency to their capital or can unlock sources of permanent capital will have distinct advantages over their rivals.

For companies to succeed through permanent capital vehicles (PCVs), whether through private company platforms or structures such as Real Estate Investment Trusts (REITs), the aim must be long-term value-creation and not just short-term capital raising.

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For instance, a firm focused on high-risk-return projects in the biosciences field must continuously evaluate whether it has a portfolio of royalty-generating patents that provide it with mission-critical capital inflows. Pixabay

Creating market credibility through both efficient capital usage and managing investor relationships is vital. For businesses that are exceptional operators, PCVs are the avenue to partner with patient capital providers to generate value for all.

For investors looking towards emerging markets such as India, PCVs are essential, especially in the context of relatively lesser secondary market liquidity, longer investment horizons for value generation and smaller size of debt capital markets. The utilisation of PCVs to hold on to investments longer for value creation could be a vital factor. However, it will be crucial that PCVs, when utilised by investors or companies to raise and manage capital, avoid the issues that have been prevalent in some cases.

The focus must be on long-term value creation and not on capital “extraction”. Therefore, the PCVs must be structured to incentivise the operators to maximise long-term value and not focus on merely creating large investment vehicles to generate high fees.

Also Read: Passive Smoking May Raise The Chances of Kidney Disease

As the capital markets and businesses in India evolve, winners and losers in highly competitive markets will get determined by a variety of factors, including sources of funds. Both the quality and quantity of funding available will be one of the fundamental factors that determine long-term winners. Permanency of capital offers some essential insights into improving one’s competitiveness. (IANS)

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How to Tell a Reputable Online Casino Apart from a Scam

Whatever you choose to research before you part with your cash, there’s always a risk an online casino can disappear overnight.

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online casino
Any online casino that’s legit will respond within minutes.

While many of the online casinos out there look professional and as if they have invested plenty of time and money in getting their business model right, there are many looking to take your money and run. Most casinos don’t plan to go out of business, but they still do, which is why you need to be careful with who you deposit money with. Let’s have a look at some of the things you can take a look at before you part with your cash at any online casino

Regulated by the Gambling Commission

Depending on the country you reside in will determine what licences the online casino has. A typical online casino in the UK will need to be regulated by the Gambling Commission for a start, and that means they will have to prove they have the means to keep their operation legit. For example, responsible gambling features like deposit and stake limits are the basics they’ll need to provide their customers. Online casino platforms like Stakers are also regulated under the Malta Gaming Authority under several licences, and that is another mandatory rule for casinos operating in the UK. This is shown at the foot of their website – and you can check licences are legit with the various regulators out there, just so you’re sure it’s not just fake.

Online Casino
Keep checking out New Online Casino.

Excellent Deposit Bonuses

As a first-time customer, you should have instant access to first-time deposit bonuses when you first register for an account. Online casinos will want to give you a chance to test their platform to ensure it’s right for you and, those casinos that do not provide such bonuses are usually there to take your money the first time out. The most reputable casinos online will also provide regular bonuses to their most loyal customers, so that’s always worth having a look at.

A Website That Professional

Granted, anyone with web development experience can get a professional website online quickly. Even those with little to no design/programming experience can get a half decent website online within an hour with the use of online tools. However, anyone with a good eye for detail will be able to see whether a website was built in a day or if it has taken several months to develop. As stated above, there are online casinos out there that have heavily invested in professional website platforms but have scammed customers on several occasions. But, you will have a much better chance of not being out of pocket if you side with a casino who has invested plenty in perfecting their website.

Casinos, card games
We’re all very familiar with gambling websites and online casinos, where you can do anything from betting on sports events. Pixabay

Positive Online Reviews

You’re never going to find an online casino that has been established for years and has 100% positive reviews about their establishment. After all, customers do get angry and upset when they lose, so more often than not, they do leave bad reviews to make online casinos look bad. However, most of the time, you are going to have access to honest reviews. No online casino is perfect but, what’s important is that they are striving to perfect their business all the time. Online reviews on sites like trust pilot will give you a good idea about how they operate and what they are doing to improve business practices.

Live Casino Section

Many of the top online casino operations now have their own live casino section where you’ll be able to play against/with live operators. This is a good example of a professional online casino entity that has invested plenty of money to get their brand out there.

Recommendations from Friends & Family

Your best chance of getting a good online casino experience is to discuss with friends & family who have used them before. If, however, you are trying to be discreet about playing casinos online for whatever reason, there are several top casino forums online that are easy to find using Google. They can suggest some of the top and most reputable casinos out there.

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The promotion of a new brand and website is extremely difficult.

Payment Methods

Deposit and withdrawal methods are a good way to get an idea of how an online casino operates. If a business doesn’t provide the most popular e-wallet payment methods or doesn’t provide you with access to the traditional deposit methods, then they might be best avoided. It’s also a good idea to test an online casino with a small deposit using your favourite method, just so you can see how long the deposit/withdrawal process takes as a whole. Because if you do win a decent amount of profit, the last thing you’ll want to do is wait for weeks to get the money you’ve won fair and square.

Support Methods

Testing out the casino support is another good way to get an idea of how legit an online casino is. A reputable one will provide you with support methods like 24/7 email support, 24/7 live chat support, 24/7 phone support, and much more. If they don’t provide such methods then you could be waiting days or even weeks for a response to your technical issues. The best way of testing the support is to do it before you’re a customer, and once you’ve registered an account before you make your first deposit. Simply connect to live chat or give them a call to see how quickly they respond to your request. Any online casino that’s legit will respond within minutes, so you’re not waiting. Those online casinos trying to scam you will likely take hours or even days.

Also Read: 4 Gentle Online Games That Make You Smarter

In conclusion, whatever you choose to research before you part with your cash, there’s always a risk an online casino can disappear overnight. However, by looking at the above points before you register for an account, you’ll have a much better chance of avoiding those nasty online casinos that choose to scam people. Remember, if it seems too good to be true, it probably is and, if you have any suspicions before creating an account, don’t create one and look elsewhere for a good online casino experience.