How To Evaluate and Select Sponsors Who Will Succeed.
18
How To Evaluate and Select Sponsors Who Will Succeed
Transcript of How To Evaluate and Select Sponsors Who Will Succeed.
How To Evaluate and Select Sponsors Who
Will Succeed
How To Evaluate and Select Sponsors Who Will Succeed:
A Broker Dealer’s Guide To Finding The Right Alternative Investment Sponsor
Jan Ryan, CFA, ModeratorPrincipal, Ryan and Associates
Chari AweidahSVP – Financial Services, Factright, LLC
Rosemarie LeongDue Dilligence, Sandlapper Securities, LLC
Dana WoodburyPresident and CEO, Buttonwood Investment Services, LLC
Failure to Launch:Reasons New Sponsors Fail
Key Attributes of Successful Sponsors
Easily Identifiable Nonstarters For New
Sponsors
The Importance of Track Record and How
To Evaluate
Five Key Components of Sponsor Financial
Report Analysis
Assess the financial health of the Sponsor
• Identify financially related risks
• Evaluate the sponsor’s capacity to provide financial and operational support
• Comprehensive view of strengths and risks
FactRight Financial Reporting Analysis
Are financial statements audited?
• If so - Auditing firm, opinion, and disclosures
• If not - Are statements prepared according to GAAP? Reason audit not performed?
Level of experience and transparency
Quality of Financial Reporting
Past profitability, cash flow, debt service, shareholder equity
Capacity to support managed funds
Review of management representations, assumptions, and forecasts
Operational Trends
Transactions such as fund seeding, and property acquisitions
Reviewed in context of governance issues, impact on cash flow, degree of disclosure
Affiliate and Related Party Transactions
Issues related specifically to financial reporting
Correspondence from regulatory agencies
FOCUS Reports for FINRA registered firms
Compliance & Regulatory Requirements
Disclosed litigation, contingent liability, and loss reserves
Does prior program performance line up with current financial position?
Affiliated party compensation, and business succession plans
Alignment with other areas reviewed
Gain a broad view of a sponsor’s financial and operational health, and a detailed look at the sponsor’s financial statements.
Operational Due Diligence Reports
Key Industry Metrics:When They Apply and
When They Don’t
Sponsor Resources:Due Diligence,
Marketing, Sales
Jan Ryan, CFA, ModeratorPrincipal, Ryan and [email protected]
Chari AweidahSVP – Financial Services, Factright, [email protected]
Rosemarie LeongDue Dilligence, Sandlapper Securities, [email protected]
Dana WoodburyPresident and CEO, Buttonwood Investment Services, [email protected]
