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Month: October 2016

A Brief Introduction to Portfolio Firms and Mergers

A Brief Introduction to Portfolio Firms and Mergers

It has been observed by industry watchers that equity firms play a crucial in helping to amalgamate fragmented sectors of an industry. One of the methods that equity firms implement to amalgamate the fragmented sectors of the industry is by merging two or more firms. Mergers are often essential for the health of the industry as a whole. Say for instance, two firms producing similar products or providing similar services are not being able to perform at par, due to lack of funds. In such a scenario a portfolio firm or an equity management firm can step in by merging the two firms. The combined funds of the two firms now help to promote the products and services offered by both firms.

According to Miles Arnone MA, the Managing Director of Cannon Capital, an equity investment firm, mergers are beneficial for both the weak firms and the equity investment firm. The portfolio firm stands to gain if the merged companies perform at par as the portfolio firm will always be the primary stakeholder in the merged companies. After a merger the brand proposition and brand value of the combined firms improve greatly. Additionally, it will add to brand image of the portfolio firm if the merger is a success.

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Some of the business activities carried out by a portfolio firm post a merger are as follows:

  • Involvement in the business activities of the merged firms: The portfolio company’s management team will not only oversee all the business activities of the merged firms, but also provide consultation service with regard to improving the productivity levels. This is essential to ensure that the merger is profitable for the firms, industry and the equity investment company.
  • Change in hierarchy: According to Miles Arnone MA, it has been observed that a change in the hierarchy of the merged companies often produces positive results with regard to boosting productivity levels. Arnone believes that introducing an efficient management system can ensure a higher rate of employee satisfaction, improve stakeholder confidence and promote brand value. All of these are essential to ensure a higher productivity level.
  • Improved funding: On successful completion of a merger, the funding that the merged companies receive improves. Not only are the funds of the merged companies are combined, but also funding can be acquired from the equity investment firm. Since the portfolio firm, which plays a pivotal role in the merger, too provides capital investment in the merged firms, the production levels increase.

Thus, mergers are beneficial for the combined companies as well as for its employees. The combined employee pool means better knowledge sharing, improved levels of productivity and better division of labour. Company employees can now collaborate with others with similar levels of expertise. This ensures the overall growth of the merged company and its employees as well. Hence, in largely fragmented industries like pharmacy, chemical or construction equipment manufacturing companies, mergers are a boon as it improves the chances of the companies surviving in highly competitive business environment.

Know More On Financial Asset Allocation

Know More On Financial Asset Allocation

Financial advisors are highly competent professionals who assist their clients in maintaining and enhancing their present economic status. For most people this implies preserving and maintaining their current income levels, increasing their capital in addition to appropriate asset allocation. In the world of finance, this also means keeping the overall risk factor from their investments to an acceptable low level. Many individuals who intend to hire such competent financial specialists to manage their finances generally want to know the unique qualities that a professional in this field needs to stand out among the crowd.

Keith Springer, a reputed financial advisor from America and the founder of Springer Financial Advisors in Sacramento, CA says that people who are looking for knowledgeable financial advisors to help them manage their finances efficiently and effectively need to search for professionals with the following five essential traits:

  1. Trustworthy

Like all relationships that clients maintain with their service provider, there needs to be an element of trust between an investor and his/her financial advisor to create a workable and congenial environment.  Such advisors need to provide impartial and practical advice to their clients on all financial matters keeping in mind their best interests apart from keeping their promises and words they utter to such customers.

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  1. Action-oriented

These financial specialists are always ready to implement the financial strategies that they conceive to enhance their clients’ wealth with immediate effect. Considering the interests of their customers, competent financial advisors never fail to open communication channels with the objective of informing them of present financial opportunities along with the status of their income and wealth.

  1. Take a holistic view of their clients’ finances

The basis of sound financial advice that these experts provide their clients is not only dependent on their customer’s income level or class of assets he/she invest in but also on certain other factors. These include their clients’ financial situation, banking habits, investment, insurance and credit requirements. These financial professionals try to apprehend and appreciate their clients’ spending habits, debt obligations and life goals to formulate an effective financial strategy to enhance their customers’ wealth.

  1. Have a clear strategy

Just as a person would never attempt to travel to place, they do not know without a map, a competent financial advisor will never maneuver the financial future without a clear plan and direction. As the circumstances in his clients’ lives changes, he/she will consider them and revise their financial strategies accordingly.

  1. Interest of their clients come first

Proficient financial advisors formulate financial plans that are tailor-made to meet their clients’ goals and objectives. They simple persuade their clients to purchase financial products to get a big commission. He/she will see a wide range of investment schemes that advice their clients to invest in those that cater to his/her financial requirements and objectives.

Keith W. Springer explains that the above traits in a competent financial advisor helps to put him/her in a separate class in comparison to his/her competitors in the market besides winning the hearts and minds of their clients.

 

 

 

Instalment Payments on My Credit Card?

Instalment Payments on My Credit Card?

Everyone gets a bit excited when he or she takes possession of a new credit card. Getting a line of credit of any kind does provide a sense of freedom and a feeling of pride. Whether you plan to use this card for some shopping or to finally take that long-postponed holiday, you know that you no longer have to postpone the decision. You can just go.

But there are a lot of different types of credit cards with different features and various benefits. Some of those benefits and features are great for just about everyone. However, other features will not be as comfortable for some individuals. That’s why everyone should look closely at the details before making a final decision on a card.

Important Questions

Perhaps the first question you should ask is one that you direct at yourself: why would I apply for this card? Positive reasons include low fees, no fees, low interest rate, or benefits and rewards. These should fit your specific spending habits. You might also ask how the card you are considering compares to at least two others. Make sure you know the interest rate and credit line or limit, as well as the annual percentage rate.

Before you take any time filling out the basic application for your card, find out if there is a minimum income requirement. If your annual income is above that limit you can continue. If not, you should probably look elsewhere. Some cards also have a minimum age limit, such as 21. There are a few other details that you should make sure to understand.

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One of the most important is called the annual fee. Some cards have no fees for each year that you are a cardholder. Others have no fee for the first year, then have a reasonable fee each year after that. This is definitely one of the elements you want to understand clearly before you accept the card. It’s not a massive number but it can add up over time.

Paying the Piper

With any credit card, you have to make payments of some sort, even if it is the absolute minimum requirement set by the issuing bank. As you shop, you should learn about credit card IPP. These three letters stand for Instalment Payment Plan. For some of the most popular platinum cards, this is an automatic determination. If you spend more than a specific amount, then the card company splits payments into several months for you.

For example, use the numbers RM500 and RM1,000 as threshold numbers. If you spend RM600 the company divides that into three payments of RM200 automatically. If you spend RM1,500, the amount is divided into six payments of RM250. Other benefits that you can access with this card include no cap on rebates and an 0.5% rebate credited to your account automatically on all retail transactions.

When looking for the right card, make sure you understand all the details. Many of them can benefit you beyond your expectations, and save you a bit of money.