Prime Capital provides access solutions that address key considerations and concerns around investing in alternatives. Across all the possible configurations, clients can rely on these proven solutions to offer quality attributes that meet their specific requirements and wishes.
Identifying an attractive investment opportunity or asset class is just part of the service provided by Prime Capital. With some asset classes, direct investment is a suboptimal choice for many clients, or may not be possible at all. This applies in particular to more complex and illiquid forms of investment. Direct investment typically involves fund units, stakes in investment vehicles operated by asset managers or the acquisition of financial and/or tangible assets directly on the balance sheet. Such direct investments may suffer from an array of different problems that can affect all investor groups – whether they are regulated or not. Typical issues that suggest direct investment may not be the best option include the following:
- Investability from a regulatory perspective
- Capital efficiency
- Tax treatment
- Balance sheet stability
- Risk management and internal regulations
- Cost optimisation
Considering all the factors
When designing access solutions that are both appropriate and efficient, Prime Capital attaches particular importance to considering all the different (and often overlapping) factors and finding the right solution. This is done either by creating a special intermediate investment instrument or offering indirect (economic) exposure through an independent securitisation structure.
A solution may be developed solely for a single investment opportunity, or it may function as a more extensive platform for further investment in the same asset class or across several asset classes.
Regardless of the structural components included in a given solution, the following principles apply to all solutions:
- It must be possible to combine every proposed structure with stringent operating, risk management and control processes.
- The operator of a platform or investment vehicle is only as good as their understanding and experience of the relevant specifications of the individual asset class(es).
- Ongoing monitoring of all parties (service providers, lawyers, any sourcing banks and asset managers) plays a major part in the success of what may be a long-term platform.
- Client-specific reporting (including risk reporting), continuous accountability and transparency for investors are key to delivering the control and security required in indirect investment scenarios.