Preparing your company for

International Investors

Tashkent, April 2013

Dr. Liudmila Sheremeteva
Main sources of
international capital
1. Industrial & Services Corporations: strategic investors
2. Financial firms:
1. Private Banks/Wealth Management
2. Mutual Funds
3. Private Equity
 Venture Capital
 Growth Capital
 Buy-Outs
 Distressed PE, etc.

3. Stock Markets:
– London Stock Exchange (LSE, main board)

– AIM

– ISDX
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London is the leading International
Financial centre

Global Financial Centres Index Z/Yen 2013

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Abundant global surplus
capital

Corporates have as much cash as their PE counterparts

The 1,500 US companies that make up the S&P large, mid and small cap indexes
have more than $1tr in cash or cash equivalents
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 $927 billion is…
52 London 2012
Olympic&Paraolimpic games or 1 278 Shard Towers

Or €102 for every person in the world !!

Dry powder by region

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 Pressure to invest is high in
Europe and Central Asia

The clock is ticking loudly and unless funds raised in ’07 and ’08 are invested by the end
of ’13, funds may need 7to hand capital back
Where funds are aimed in
Europe and Central Asia…

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 Fundraising in Central
Asia
 Despite a range of uncertainties Central Asia features strong growth
 This thriving market is one of the fastest growing markets in the world
and has experienced a swift transition from a central to private economies
and an explosion of investment and interest
 This investment is coming from liquid and well financed sources such as
private equity funds and alternative capital providers. Some funds have a
strategic focus on the region while others have a global reach but a sector
focus
 All of these funds, whether geographically or sector focused are able to
provide targets with a complete funding solution and will work in full
collaboration to ensure the optimum economic structure that benefits all
parties
 Not every company is suited to these providers and they only pick the best
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 Investment Risk – “perception”
vs “reality”
Capital providers require a return on their investment which will reflect
the perceived risks
Extrinsic Risk Factors
1. Country risk: political stability, rule of law, transparency, investment
policies, education
2. Currency risk

3. Sector risk

Intrinsic Risk Factors

1. Company track record & performance outlook

2. Calibre of management & staff (character & expertise)

3. Presentation & communication

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Private Equity Investor objectives
 To invest in Companies with
 Solid financial performance
 high & rapid growth prospects
 a good product or service
 a competitive edge or unique selling point
 a good management team with direct experience of the product and its
market

 Management must demonstrate:

 Good corporate governance
 Transparency
 Strong commitment
 Real ambition to turn their business plan into reality

 Exit philosophy:
private equity investor seeks to realise higher value within 3 - 6 years, either
through a sale of its investment or sale of11the company or a flotation on the stock
market.
Major Challenges:
 Small fish in a big pond
 Competition from other emerging markets
 Commitment of senior management
 Know your audience / identify key influencers
 Understand the business culture
 Understand which messages resonate best with
UK financial community
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Investors want to know
who, what, why?
 Professional documentation: Business Plan, Executive Summary,
Powerpoint slides
 Speak English: positive impression, reduce misunderstandings (costly)
 Punctuality & efficiency: always be on time and correspond efficiently
 Clarity & Integrity : “mean what you say and say what you mean” or ask
advice
 Professional advisors: help you target & communicate to the right investors
 Personal appearance & dress code: avoid unnecessary question marks….
 Transparency & Trust: adequate, timely disclosure & follow-up
communications
 Recognise weaknesses, emphasise strengths

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Finding & attracting the right
investors

• Attend UK/International conferences

• Use financial advisors or intermediaries

• Internet: many general websites useful for investor

research, ‘cold calling’ has limited success

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Next Steps
 Establish amount of funding required, what these funds will be
used for, the time frame that they will be utilised and potential
methods of repayment to provide an exit for these providers
 Capital providers will require a return on their investment
which will reflect the perceived risks
 Capital could be provided in the form of equity, low or high
yielding debt, convertible debt or a combination or these
 It will be important to provide the most appropriate and
affordable funding structure that will enable you to build your
profile

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FSEE can help their clients to
attract investment

Assist in preparation of financial model and business

plan
Identify and fill skills gaps

Introduce to potential investors

Assist in negotiations

Lead the deal

Ensure management focus

Drive to close
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Contact Details

Dr. Liudmila Sheremeteva

Financial Services for Eastern Europe

Tel: +44 (0) 207 584 6682

Mobile: +44 (0) 7789 392589
Email: liudmila@fsee.co.uk
Website: www.fsee.co.uk
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