In the aftermath of the 2008 financial crisis, banks became the subject of tighter industry regulation, media attention, and public scrutiny, all of which set limitations on their financing opportunities especially for mid-market companies. Rising in their stead are business development companies (BDCs), which are investment vehicles that raise capital particularly to fund small and middle-sized businesses.
But in this endeavor, BDCs face different kinds of risks. Here are three of them:
Leverage risk. To be able to fund businesses, BDCs first raise capital from such sources as corporate bonds, equity offerings, and convertible bonds. These borrowed funds compose majority of their investments, and the goal is for the gains from these investments to exceed the interest that their loans will incur. If the investment does not generate returns, the BDC will have to take losses.
Liquidity risk. BDCs are categorized as publicly traded companies, and are therefore considered liquid. However, the businesses they invest in are private, and are then not liquid. Through strategies like taking the company public through an IPO or facilitating a buyout, BDCs hope to make a profit and be able to settle their debt, distribute cash to their investors, and find more capital to invest. But within their portfolio, BDCs may find it hard to liquidate assets, and the longer the process takes, the more interests they must pay.
Interest rate risk. Finally, as entities that both borrow and lend, the best case scenario for BDCs is to find providers of long-term loans with low fixed rates, and small businesses willing to borrow short-term loans at variable rates. In reality, BDCs are subject to the volatile nature of the interest rates. The risk is that when they borrow to pay off their original loans and acquire more funds to invest, the rates have risen, making the capital now more expensive.
To deal with these risks, business development companies need to invest towards an infrastructure that promotes swift but informed decision-making, superior investor relations, and smooth operations in multiple market cycles.
Central to this infrastructure is a robust middle and back office, consisting of experienced personnel utilizing cutting edge technologies to handle recordkeeping, accounting, treasury, due diligence, and tax reporting cost-efficiently and under exacting standards. With their help, BDCs can easily evaluate and manage the risks that are inherent in their business, and satisfy the investment goals of their investor clients as well as their own.
Monday, February 1, 2016
Tuesday, December 1, 2015
3 Less-known Social Media Marketing Trends to Consider
Across all industries in different markets around the globe, social media marketing is seeing a phenomenal rise. Businesses are beginning to dedicate serious funds and manpower for it, and customers are responding positively.
Companies are also generally keen on monitoring trends – for example, that Facebook continues to be the top platform and thus should get the most share of the resources. But behind the popular trends that are guiding important marketing decisions are the less known but equally important patterns. We look at those trends in this article:
Social media drives traffic to the website. In a survey conducted by Social Media Examiner participated in by 3,720 marketers, business owners and solopreneurs from the U.S. and abroad, while social media primarily promotes exposure for the brand, its number two benefit is how it drives traffic to the company website.
This means that while social media is truly an area of growth, companies should also strive for their web portal to keep up, by offering something fresh for all these new visitors that social media will draw. Moreover, they should ensure continuity and consistency in brand messaging, so that both platforms only serve to strengthen the brand, and not confuse the users.
Social media access is also growing on desktops. Everyone is excited about the significant rise of social media consumption via mobile devices such as smartphones and tablets. In response, many businesses took the steps to ensure that their content are mobile-friendly, and that is good practice. But not everybody knows that social media access via desktop is also growing, as revealed in a study of comScore last March 2015.
The research says that adoption of mobile devices did not, in fact, cut the use of social media activity via desktop. Instead, it simply complemented it, by providing access when desktop viewing is not possible, e.g. when on the go, when in bed, or during waiting times. This means that companies can still devote resources towards social media materials meant for desktops, and expect the same level of engagement.
Interest-based networks may be the next big thing. Social media networking is currently largely people-based – one adds people he knows personally. And much of this kind of networking happens on Facebook, and other sites that attempted to operate on the same framework have failed, or are failing. According to HootSuite CEO Ryan Holmes, interest-based groups have a much better chance at growing (and sticking around), despite Facebook.
To learn more about navigating social media marketing, get in touch with digital marketing experts today.
Companies are also generally keen on monitoring trends – for example, that Facebook continues to be the top platform and thus should get the most share of the resources. But behind the popular trends that are guiding important marketing decisions are the less known but equally important patterns. We look at those trends in this article:
Social media drives traffic to the website. In a survey conducted by Social Media Examiner participated in by 3,720 marketers, business owners and solopreneurs from the U.S. and abroad, while social media primarily promotes exposure for the brand, its number two benefit is how it drives traffic to the company website.
This means that while social media is truly an area of growth, companies should also strive for their web portal to keep up, by offering something fresh for all these new visitors that social media will draw. Moreover, they should ensure continuity and consistency in brand messaging, so that both platforms only serve to strengthen the brand, and not confuse the users.
Social media access is also growing on desktops. Everyone is excited about the significant rise of social media consumption via mobile devices such as smartphones and tablets. In response, many businesses took the steps to ensure that their content are mobile-friendly, and that is good practice. But not everybody knows that social media access via desktop is also growing, as revealed in a study of comScore last March 2015.
The research says that adoption of mobile devices did not, in fact, cut the use of social media activity via desktop. Instead, it simply complemented it, by providing access when desktop viewing is not possible, e.g. when on the go, when in bed, or during waiting times. This means that companies can still devote resources towards social media materials meant for desktops, and expect the same level of engagement.
Interest-based networks may be the next big thing. Social media networking is currently largely people-based – one adds people he knows personally. And much of this kind of networking happens on Facebook, and other sites that attempted to operate on the same framework have failed, or are failing. According to HootSuite CEO Ryan Holmes, interest-based groups have a much better chance at growing (and sticking around), despite Facebook.
To learn more about navigating social media marketing, get in touch with digital marketing experts today.
Wednesday, November 25, 2015
Alternative Investments on the Rise
In 2008, the financial sector faced one of its worst crises, which led to the fall of some of the biggest names in the industry. As a result of that crisis, portfolio managers have been constantly on the lookout for ways to mitigate risks and ensure profitability amid the unexpected developments in the world of asset management. Turning to alternative investments has been one such course.
Most fund managers refer to alternative investments as funds whose dynamic run contrary to the movement of traditional investments such as bonds and public equities, and the rest of the market. Thus, it can be said they promote portfolio stability. Among the types of alternative investments are private equity funds, hedge funds, and real estate.
Two years ago, alternative assets accounted for 12% of the industry assets globally. The numbers are expected to rise further: By 2020, experts predict that alternatives’ share will be 15%. Key to this expected growth is a client base that more and more appreciates the strategies being employed by fund managers to address the risks associated with alternative investments.
Furthermore, alternative asset managers are becoming increasingly regulated, and they have been responding well, through the adoption of services and technology that boost transparency and efficiency in operations. With this development, financial advisors and the fund managers themselves will be more confident about presenting alternative investments as a truly profitable venture to the erstwhile hesitant client-investors.
Truly, alternative investments present a lot of opportunities for asset diversification – a popular strategy to minimize risks amid a fast-changing financial landscape. It is a landscape that has been welcoming the entry of new players and heightened interest in new markets across the globe, especially in Asia. This year, for example, a Deutsche Bank survey revealed that 30% of investors are keen on investing in China and over 25%, in India, with the figures representing an increase of about 12% and 21%, respectively.
To find growth in the alternative assets scene, it is important that fund managers leverage middle and back office solutions to aid in fund administration, accounting, reporting, data management, and client relation functions. Having the human resources and the technology infrastructure to provide support in these roles spell the difference between high-performing alternative assets managers from the rest. And as is often the case in the financial sector, good performance only leads to more investors, which lends the opportunity for even greater success.
Most fund managers refer to alternative investments as funds whose dynamic run contrary to the movement of traditional investments such as bonds and public equities, and the rest of the market. Thus, it can be said they promote portfolio stability. Among the types of alternative investments are private equity funds, hedge funds, and real estate.
Two years ago, alternative assets accounted for 12% of the industry assets globally. The numbers are expected to rise further: By 2020, experts predict that alternatives’ share will be 15%. Key to this expected growth is a client base that more and more appreciates the strategies being employed by fund managers to address the risks associated with alternative investments.
Furthermore, alternative asset managers are becoming increasingly regulated, and they have been responding well, through the adoption of services and technology that boost transparency and efficiency in operations. With this development, financial advisors and the fund managers themselves will be more confident about presenting alternative investments as a truly profitable venture to the erstwhile hesitant client-investors.
Truly, alternative investments present a lot of opportunities for asset diversification – a popular strategy to minimize risks amid a fast-changing financial landscape. It is a landscape that has been welcoming the entry of new players and heightened interest in new markets across the globe, especially in Asia. This year, for example, a Deutsche Bank survey revealed that 30% of investors are keen on investing in China and over 25%, in India, with the figures representing an increase of about 12% and 21%, respectively.
To find growth in the alternative assets scene, it is important that fund managers leverage middle and back office solutions to aid in fund administration, accounting, reporting, data management, and client relation functions. Having the human resources and the technology infrastructure to provide support in these roles spell the difference between high-performing alternative assets managers from the rest. And as is often the case in the financial sector, good performance only leads to more investors, which lends the opportunity for even greater success.
Wednesday, November 18, 2015
My Journey Towards Ethical Eating (Part 5): Questions to Ask
This article is part of an article series. Check out the earlier parts of this series here, here, here and here.
For this entry, I’d like to list down the many questions to ask each time you pick up an item at the supermarket, or point to a dish on a restaurant menu.
On farm practices. From which farm does your local mart or cafe source its agricultural products? What can they say about said farm’s production practices? Can you visit and will they be proud of what you’ll see? Are they small and family-owned, or are they a huge agricultural complex with mechanized systems (or somewhere in between)? Are their practices disturbing the ecological balance, or can they be seamlessly integrated within the Earth’s cycles to renew itself? Do they observe soil-building principles?
On labels. Like I explained in my previous entry, there are a lot of terms used to refer to supposedly sustainable products, but they can be confusing. For example, while organic cattle should have some access to pasture, but it might not fill all the criteria to be called pasture-raised. Another example: Pasture-raised beef is not always grass-fed, the cow may also have been fed with grains sometimes. Similarly, cattle can be grass-fed but not necessarily in a pasture. So the important question is, what exactly does its label mean? Additionally, who assigned this label? Was it self-proclaimed, or was it, in fact, certified organic, free-range, or pasture-raised?
On the people behind the products. Who picked the eggs to be used for my croque madame? Were they paid the right wages and provided with the benefits they need and deserve? Were they protected from the harms that come with farm work? Or were they exposed to toxic pesticides? If I pay for this item, how much of my money will actually go to them? Or will the profits simply end up in the pockets of a multinational corporation’s executives?
On the plants and animals. Were they treated with respect? In what conditions were they raised? Were they not crammed together in tight spaces all the time? Were they injected with chemicals that undermined their own natural body processes? Or can one say that they lived a happy and peaceful life? As for fruits and vegetables, what was used on them as they grew? Was that piece of pear bathed with pesticides for it to land smooth and spot-free on your hands?
I hope that this series about my journey towards ethical eating has inspired you to ask questions, to know more about how diet affects our bodies, our fellow living creatures, and our planet.
This is a guest blog post by Richard A Kimball. To learn more about him, check out his profiles here and here.
For this entry, I’d like to list down the many questions to ask each time you pick up an item at the supermarket, or point to a dish on a restaurant menu.
On farm practices. From which farm does your local mart or cafe source its agricultural products? What can they say about said farm’s production practices? Can you visit and will they be proud of what you’ll see? Are they small and family-owned, or are they a huge agricultural complex with mechanized systems (or somewhere in between)? Are their practices disturbing the ecological balance, or can they be seamlessly integrated within the Earth’s cycles to renew itself? Do they observe soil-building principles?
On labels. Like I explained in my previous entry, there are a lot of terms used to refer to supposedly sustainable products, but they can be confusing. For example, while organic cattle should have some access to pasture, but it might not fill all the criteria to be called pasture-raised. Another example: Pasture-raised beef is not always grass-fed, the cow may also have been fed with grains sometimes. Similarly, cattle can be grass-fed but not necessarily in a pasture. So the important question is, what exactly does its label mean? Additionally, who assigned this label? Was it self-proclaimed, or was it, in fact, certified organic, free-range, or pasture-raised?
On the people behind the products. Who picked the eggs to be used for my croque madame? Were they paid the right wages and provided with the benefits they need and deserve? Were they protected from the harms that come with farm work? Or were they exposed to toxic pesticides? If I pay for this item, how much of my money will actually go to them? Or will the profits simply end up in the pockets of a multinational corporation’s executives?
On the plants and animals. Were they treated with respect? In what conditions were they raised? Were they not crammed together in tight spaces all the time? Were they injected with chemicals that undermined their own natural body processes? Or can one say that they lived a happy and peaceful life? As for fruits and vegetables, what was used on them as they grew? Was that piece of pear bathed with pesticides for it to land smooth and spot-free on your hands?
I hope that this series about my journey towards ethical eating has inspired you to ask questions, to know more about how diet affects our bodies, our fellow living creatures, and our planet.
This is a guest blog post by Richard A Kimball. To learn more about him, check out his profiles here and here.
Monday, November 16, 2015
My Journey Towards Ethical Eating (Part 4): Tenets of Ethical Eating
This article is part of an article series. Check out Part 1, Part 2 and Part 3.
Many food activists push for S.O.L.E food, where S stands for Sustainable, O for Organic, L for Local, and E for ethical. In my case, the more I read on the topic, I found that these tenets are overlapping most of the time.
Based on my understanding, this is what it means:
Sustainable. The production system behind the food is aligned with nature’s own processes. For example, a farm that uses natural waste instead of fertilizers to enrich the soil can be called sustainable, in that it does not introduce a synthetic substance that will change its composition. Foraged items from the woods or fields like mushrooms and berries are sustainable because they are picked while in season, and does not entail converting the land and clearing off weeds and other organisms to make way for a single species.
Organic. When a slab of meat or a cluster of broccoli bears the sign ‘organic,’ it means that it was grown without the use of antibiotics and growth hormones, or fertilizers and pesticides, respectively. In addition, organic farm animals are allowed to graze because they are supposed to get food from natural sources. At this point, lines can get blurred; you will be encountering the following terms: free-range, grass-fed, natural, pasture-raised, or cage-free, and while related, they are not exactly the same, although some descriptors can be subsumed under another.
Local. Consuming local means frequenting your farmers’ market to look for the freshest produce. Local is almost always seasonal food, it’s generally guaranteed to taste better. More importantly, local food did not travel far to get to the market. In the US, the 2008 Food, Conservation and Energy Act says that an ingredient may be described as "locally or regionally produced” if its origin is within 400 miles. If this is the case, it means less carbon footprint, and you help the farmers sustain their livelihood.
Ethical. Concerns regarding the ethics of food production may involve the food item itself, the farmers who grow the plants or animals or the workers who create the product, or the corporation or the industry’s impact on the environment or society. Animal rights activists focus on matters of animal cruelty in farms, while social activists condemn companies such as Nestle for their horrible treatment of its workers. Finally, some groups target Monsanto and the like for polluting water systems and promoting the use of pesticides that harm the soil.
Many food activists push for S.O.L.E food, where S stands for Sustainable, O for Organic, L for Local, and E for ethical. In my case, the more I read on the topic, I found that these tenets are overlapping most of the time.
Based on my understanding, this is what it means:
Sustainable. The production system behind the food is aligned with nature’s own processes. For example, a farm that uses natural waste instead of fertilizers to enrich the soil can be called sustainable, in that it does not introduce a synthetic substance that will change its composition. Foraged items from the woods or fields like mushrooms and berries are sustainable because they are picked while in season, and does not entail converting the land and clearing off weeds and other organisms to make way for a single species.
Organic. When a slab of meat or a cluster of broccoli bears the sign ‘organic,’ it means that it was grown without the use of antibiotics and growth hormones, or fertilizers and pesticides, respectively. In addition, organic farm animals are allowed to graze because they are supposed to get food from natural sources. At this point, lines can get blurred; you will be encountering the following terms: free-range, grass-fed, natural, pasture-raised, or cage-free, and while related, they are not exactly the same, although some descriptors can be subsumed under another.
Local. Consuming local means frequenting your farmers’ market to look for the freshest produce. Local is almost always seasonal food, it’s generally guaranteed to taste better. More importantly, local food did not travel far to get to the market. In the US, the 2008 Food, Conservation and Energy Act says that an ingredient may be described as "locally or regionally produced” if its origin is within 400 miles. If this is the case, it means less carbon footprint, and you help the farmers sustain their livelihood.
Ethical. Concerns regarding the ethics of food production may involve the food item itself, the farmers who grow the plants or animals or the workers who create the product, or the corporation or the industry’s impact on the environment or society. Animal rights activists focus on matters of animal cruelty in farms, while social activists condemn companies such as Nestle for their horrible treatment of its workers. Finally, some groups target Monsanto and the like for polluting water systems and promoting the use of pesticides that harm the soil.
This is a guest blog post by Richard A Kimball. To learn more about him, check out his profiles here, here and here.
Subscribe to:
Posts (Atom)