Risk Management

Capaz Finance Investment Consulting planning process involves classifying investments by risk type and ensuring appropriate portfolio diversification. We hire local experts to analyze the risk, chances and
the workflow.

We prefer to invest as a substantial minority shareholder (say, 10 to 35 per cent), where we can significantly influence the investment.

We reduce and manage risk by:

  • investing in businesses that are established and that have credible, well credential management
  • investing in securities with preferred rights (e.g. convertible preference shares, convertible notes) where possible
  • investing in securities that have preferred access to an income stream, where possible
  • taking a board seat (almost invariably)
  • entering into shareholder`s agreement that usually contains:
    • super majority voting rights or similar on key issues
    • requirement for annual budgets (requiring super majority approval and annual update of business plan
    • provisions to protect investors against under-performance
    • right to appoint/dismiss key executives
    • pre-emptive rights on sale of interests
    • fallback liquidity arrangement at a specified time.
  • service contracts, where appropriate
  • ensuring the business observes important legislation (e.g. environmental) ;and
    ensuring governance issues (e.g. conflict of interest) are identified and resolved
  • structuring investments, including investing in trances based on the achievement of milestones and equity ratchets based on performance.

 

Debt is One of the biggest unrecognized risks in recent years. Debt means risk, so our first effort should be to reduce our debt and minimize the risk. Today most of are are suffering from credit card debt and other debt. Credit card debt reduction is very important step to reduce the debt risk as mostly people are unable to pay their credit card bills on time. Debt management is very important and same as risk management.  View Our Principles and Values