our Investment Policy
Whatever we set out to do, our goal is always to satisfy our client. A safe, steady investment or rather a more high-risk, high-return kind of investment? Our experts will try to find the right solution for you.
In general, we focus on the 3 areas of expertise listed below. Each of these have their own advantages, and we consult with our clients to determine which type(s) of investment best suits their needs.
Do not hesitate to get in touch, and we will gladly demonstrate how and where we can be of assistance.
Invest in the West relies on its expertise to help you reach your investment targets - whether through a traditional M&A, Private Equity or Mezzanine financing. We specialize in 3 stable, low-risk industries that appeal to the most basic human needs: food, housing (construction) and health (pharmaceuticals). Invest in the West generally tries to obtain full ownership of the target company and relies on a holding structure to ensure accountability to and approval by the investor (see How We Work for more info).
Mergers and Acquisitions is a discipline of Corporate Finance. M&A transactions are meant to either acquire (for the account of the investor/buyer) or sell (for the account of the owner) the majority or, most of the time, the totality of a company's shares. Invest in the West guarantees that all proposed M&A transactions are managed by experts investment managers who have have their clients' best interest at heart. Before proposing a transaction, our experts thoroughly analyze both the industry and the individual organization and its peers to come to a fair valuation of the target company. Once a transaction has been approved by the investor, the experts will start negotiating the best possible price and terms & conditions of the share purchase agreement. All of our trusted investment managers strictly adhere to the legal, fiscal and financial requirements of a transaction.
An investor will buy a company because said company is anticipated to yield attractive returns (whether market share, expertise, profit or future growth). If the investment is properly managed before, during and after the take-over, it will create and accumulate shareholder value. When the time is right, an acquired company can be sold to the next investor with a considerable capital gain.
What is 'Mezzanine Financing' exactly?
To quote Investopedia: "Mezzanine financing is a hybrid of debt and equity financing that gives the lender the rights to convert to an ownership or equity interest in the company in case of default, after venture capital companies and other senior lenders are paid. Mezzanine financing, usually completed with little due diligence on the part of the lender and little or no collateral on the part of the borrower, is treated like equity on a company's balance sheet.
To attract mezzanine financing, a company usually must demonstrate a track record in the industry with an established reputation and product, a history of profitability and a viable expansion plan for the business, such as through expansions, acquisitions or an initial public offering (IPO)."
So why should an investor participate in Mezzanine Financing?
As the typical interest rate for mezzanine financing is 12 to 20%, it is a high-risk, potentially high-return debt form. Other advantages are:
- Lenders may gain equity in a business or may purchase equity at a later date. This may significantly increase an investor's rate of return (ROR).
- Providers receive contractually obligated interest payments on a monthly, quarterly or annual basis.
Digitalization is at the forefront of today's changes and drives innovation across industries and sectors. Be part of this (r)evolution by investing in cutting-edge companies (start-ups and scale-ups) that may shape the world of tomorrow.
- Cleantech: New forms of clean energy that aim for increased energy efficiency and fewer polluting materials used.
- Fintech: Open standards and block chain technologies have the potential to disrupt the financial industry. New players and incumbents alike are looking for ways to use technology to innovate the traditional financial services.
- Security: New technologies in both physical and cybersecurity can be deployed to protect assets more reliably.
Invest in the West partners with tech funds that are managed by experienced entrepreneurs and investment managers. While we strive for a return of 15-20%, we also want to create added value by bridging the gap between the Middle East and South Asia through smart business development and relocation.
Our investment policy in brief:
- Invest early, but only when the product-market fit has been proven
- Make milestone-based investments
- Co-invest with other VCs
- Build an ecosystem around the portfolio
Real estate is considered one of the core asset classes of investments. Institutional players allocate 8%-12% of their AuM to real estate and several market studies show that it positively impacts the risk/return ratio of a portfolio.
Real estate deals can be realized through a ‘push’ or a ‘pull’ strategy. A real estate broker who auctions off a real estate portfolio is an example of a 'push'. A ‘pull’ strategy, on the other hand, may happen when one pro-actively approaches real estate players to solicit an investment. Invest in the West and its partners focus on the latter. We offer direct access to senior-level real estate investors & developers and can coordinate the full transaction process for you: from soliciting over valuation, structuring, negotiation, due diligence, transaction documentation and bank finance to closing. If so desired, we can also create a tailor-made tracker of the REIT-universe for you - on a European or a global level.
Real estate is a capital-intensive business. Players are approaching investors to fund their growth plans.
Investments in real estate can take many forms (property partnership, minority equity investment, co-investment, club deals, listed real estate, mezzanine, bond, senior debt financing) and can be made in different types of real estate: from traditional offices or residential buildings to the growing sectors of hotels, student housing, care homes, short-term accommodations, SME parks, car parks etc. The investment risk is variable, and can range from deep core (new buildings with long-term leases) to greenfield developments.
Consequently, the risk & return are highly dependent. Please contact us and we will happily assist you with determining the investment profile and policy that best suits your needs.