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How To Evaluate and Select Sponsors Who Will Succeed

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Presentation on theme: "How To Evaluate and Select Sponsors Who Will Succeed"— Presentation transcript:

1 How To Evaluate and Select Sponsors Who Will Succeed

2 How To Evaluate and Select Sponsors Who Will Succeed:
A Broker Dealer’s Guide To Finding The Right Alternative Investment Sponsor

3 Jan Ryan, CFA, Moderator Chari Aweidah Rosemarie Leong Dana Woodbury
Principal, Ryan and Associates Chari Aweidah SVP – Financial Services, Factright, LLC Rosemarie Leong Due Dilligence, Sandlapper Securities, LLC Dana Woodbury President and CEO, Buttonwood Investment Services, LLC

4 Reasons New Sponsors Fail
Failure to Launch: Reasons New Sponsors Fail

5 Key Attributes of Successful Sponsors

6 Easily Identifiable Nonstarters For New Sponsors

7 The Importance of Track Record and How To Evaluate

8 Five Key Components of Sponsor Financial Report Analysis

9 Assess the financial health of the Sponsor
FactRight Financial Reporting 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

10 Quality of Financial Reporting
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

11 Operational Trends Past profitability, cash flow, debt service, shareholder equity Capacity to support managed funds Review of management representations, assumptions, and forecasts

12 Affiliate and Related Party Transactions
Transactions such as fund seeding, and property acquisitions Reviewed in context of governance issues, impact on cash flow, degree of disclosure

13 Compliance & Regulatory Requirements
Issues related specifically to financial reporting Correspondence from regulatory agencies FOCUS Reports for FINRA registered firms

14 Alignment with other areas reviewed
Disclosed litigation, contingent liability, and loss reserves Does prior program performance line up with current financial position? Affiliated party compensation, and business succession plans

15 Operational Due Diligence Reports
Gain a broad view of a sponsor’s financial and operational health, and a detailed look at the sponsor’s financial statements.

16 When They Apply and When They Don’t
Key Industry Metrics: When They Apply and When They Don’t

17 Due Diligence, Marketing, Sales
Sponsor Resources: Due Diligence, Marketing, Sales

18 Jan Ryan, CFA, Moderator Chari Aweidah Rosemarie Leong Dana Woodbury
Principal, Ryan and Associates Chari Aweidah SVP – Financial Services, Factright, LLC Rosemarie Leong Due Dilligence, Sandlapper Securities, LLC Dana Woodbury President and CEO, Buttonwood Investment Services, LLC


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