...8, 2002 MARK MITCHELL TODD PULVINO ERIK STAFFORD Strategic Capital Management, LLC (A) On December 9, 1998, Elena King contemplated her first investment as a hedge fund manager. In only a few months, Elena had raised $20 million for her new fund, Strategic Capital Management, and was looking forward to putting the money to work. Based on recent comments by high-profile analysts such as Henry Blodgett of Merrill Lynch and Mary Meeker of Morgan Stanley, Elena thought that the Internet sector provided excellent prospects for lucrative investments. She was specifically interested in a recent initial public offering (IPO) by Ubid, an Internet auction firm. Strategic Capital Management, LLC Elena became interested in hedge funds when she was an MBA student during the prior two years. A strong believer in portfolio diversification, Elena was enamored with the risk-return profile of many hedge-fund strategies. Like many of her fellow classmates, Elena chose to forgo a traditional career in consulting and investment banking by pursuing an entrepreneurial venture. She was able to convince two of her classmates to join her in launching Strategic Capital Management (SCM), LLC. Against the backdrop of a strong stock market, SCM had little trouble raising $20 million with a mandate of generating annual returns of 10% with little market exposure. SCM would charge its investors a management fee of 2% of assets under management and an incentive fee equal to 20% of profits. SCM also...
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...HBS Case 9‐202‐024 Strategic Capital Management, LLC Instruction for the Case Report The case report carries 10 marks and should follow the structure suggested below. It should have at most 6 pages including the cover page, and should be printed with line space 1.5 lines and font size 12. The cover page should contain the name of the group, student name and ID number. There is one mark for the clarity of the writing. Note that lecturers will help you to clarify conceptual issues but not specific case questions and calculations. The report is due at 5pm Friday March 29 in the submission box on Level 3 of Block D. No electronic submission will be accepted. Late submission carries point deduction: 5 marks for 1‐day (or less) overdue, 8 marks for 2‐day overdue, and all 10 marks for 3‐day (or more) overdue. Exception will be considered only for medical reasons. Case Report Structure: I. Case background (0.5 mark) II. III. Create a table with the key dates, events, and decisions to be made. Investing in hedge funds (1 mark) Key differences with mutual funds in terms of investment strategy, risk, and reward. Arbitrage opportunity (2 mark) Was there an arbitrage opportunity on Dec 9? What should be the arbitrage transactions (long or short in each stock, number of Ubid shares for each share of Creative Computers)? Elena is required to post cash collateral for her short position. Should she borrow to purchase Creative Computers (CC)...
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...Executive Summary: The objective of this report is to evaluate investment opportunities for Strategic Capital Management, LLC regarding stocks of Creative Computer and/or its subsidiary firm Ubid. The analysis deduces arbitrage to be the best investment strategy. Strategic Capital Management (SCM), LLC: SCM is a recent entrepreneur venture founded by Elena King and two of her fellow classmates. The company has currently generated 20 million dollars and aims for annual returns of 10 percent. Its investors are charged a management fee of 2% of assets under management and an incentive fee equal to 20% of profits. Moreover company policy requires investors to keep their money invested for a minimum of two years. Recent meetings with prominent analysts, Henry Blodgett of Merrill Lynch and Mary Meeker of Morgan Stanley have indicated the Internet Sector to hold promising investment opportunities, therefore Creative Computers and its subsidiary Ubid present potential prospects for investment. Analysis: Internet Sector: Dot-com Bubble The dot-com bubble has enabled the Internet sector and its related fields to yield earnings at an above-average rate relative to the market. Hence the expected return on these growth stocks is great (see figure below). However these investments involve an inherent risk that must not be ignored. Because this sector is categorized by strong competition the need for innovative and skillful business strategies is a must. ** (Note: since...
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...Coordinator of CBA,IUBAT Prepared By: Group Name: Brain Crash Name | ID | Section | Program | Md. Manik Molla | 12102462 | B | BBA | Kazi Mahmud Hasan | 12102482 | B | BBA | Mahidul Islam | 13202013 | B | BBA | Monika Shama | 12102450 | B | BBA | Course Name: Strategic Management Course Code: MGT - 403 Section – B Date of Submission: 29th November 2014 IUBAT- International University of Business Agriculture and Technology I. Current Situation A. Current Performance Chrysler is an American automobile manufacturer headquartered in Auburn Hills, Michigan and owned by Italian automaker Fiat. Chrysler is one of the "Big Three" American automobile manufacturers. It sells vehicles worldwide under its flagship Chrysler brand, as well as the Dodge, Jeep and Ram. Other major divisions include Mopar, its automotive parts and accessories division, and SRT, its performance automobile division. In 2014, Chrysler Group LLC is the seventh biggest automaker in the world by production. In 1998, Chrysler merged with German automaker Daimler-Benz AG to form DaimlerChrysler; the merger proved contentious with investors and Chrysler was sold to Cerberus Capital Management and renamed Chryvgsler LLC in 2007. Like the other Big Three automobile manufacturers, Chrysler was hit hard by the automotive industry crisis of 2008–2010 and filed for Chapter 11 bankruptcy reorganization on April 30, 2009. On June 10, 2009, Chrysler emerged from the bankruptcy proceedings with the...
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...* Skip to Navigation * Skip to Content TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory * Join * Search * Browse * Saved Papers ------------------------------------------------- Top of Form Search Bottom of Form * Home page » * Business and Management Private Fitness Llc In: Business and Management Private Fitness Llc PRIVATE FITNESS, LLC Background/Issues and Concern: • Acts of Kate with regards to the theft • Rosemary and Kate are long-time friend • Rosemary wanted to increase her standard of hiring by capitalizing on her reputation and knowledge in the growing fitness field and to have more time to spend with her two young children • Rosemary wants to protect her assets Problem Statement: How should Rosemary address her prolem with regards to the situation with Kate as well as in protecting her assets? Point of View: Rosemary Worth, the owner of the Private Fitness, LLC Objectives: 1. to strengthen the controls of the business 2. to eliminate theft and any other kind of fraud which can harm the entity 3. to operate and earn revenues effectively and efficiently Areas of Consideration: 1. The market of their business 2. The acts of Kate 3. The goal of Rosemary 4. Protection of assets 5. Rosemary’s situation Alternative Courses of Action: 1. Fire Kate and hire one of the remaining instructors as a manager Advantages: • Possible thief will...
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...UVA-F-1537 INVESTURE, LLC, AND SMITH COLLEGE In January 2004, Alice Handy’s new investment advisory firm, Investure, LLC, was attempting to land its first client, Smith College, an elite liberal arts college located in Northampton, Massachusetts with a $913 million endowment. Handy, fresh from her previous position as chief executive officer of the University of Virginia Investment Management Company (UVIMCO), had 25 years of experience managing money and a track record of success. Over her career, Handy had directed increasing amounts of funds to a class of investments known as “alternative assets,” which included a range of investments other than publicly traded stocks and bonds. She had also developed a philosophy about their use and principles that she hoped would guide her new company to success. Mindful that in the investment world “past returns were no guarantee of future returns,” Handy knew she would face challenges from the unprecedented flow of funds into alternative assets and competition from other advisors. Building a business would also require time, energy, and persistence. All of these concerns, however, were in the back of her mind. In the forefront was Smith College’s endowment. She and her partner, Bruce Miller, were eager to review Smith’s current portfolio and prepare asset allocations that would position the endowment for future success. Handy’s Career Handy began her career at Travelers Insurance in 1970 after receiving a bachelor’s ...
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...the industry it helped create: Private equity. With more than 40 years of experience, our track record of continuous and successful investing is unmatched by any other private equity firm. Striving to create sustainable value in partnership with superior management teams, we work with companies to formulate strategy, conceptualize and implement creative financing structures, recruit talented executives and draw on best practices from the firm’s portfolio companies. We take a different approach to investing, beginning with a thorough evaluation of macroeconomic and industry fundamentals. Private equity at Warburg Pincus means investing at all stages of a company’s life-cycle: From founding start-ups and fostering growth in developing companies to leading complex recapitalizations or large-scale buyouts of more mature businesses. This growth-oriented philosophy is incorporated across 3 2 2 Our Philosophy each of our investment sectors. At the heart of our approach is an emphasis on building businesses that withstand the toughest test: Time. With an investment horizon of five to seven years, we take an unusually long-term perspective. Matched with our size and scope of funds under management, this approach enables the firm to provide substantial resources to our portfolio companies. This is a critical advantage in the face of constantly changing economic conditions...
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...Martial Arts Business Plan * Executive Summary * Company and Finance summary * Services Overview * Strategic Analysis * Marketing Executive Summary The purpose of this business plan is to raise $50,000 for our MWMA Martial Arts studio while satisfying expected finances and operations over the next three years. MWMA Martial Arts is an Orem based LLC that will provide many levels of martial arts training specifically focused on Tae Kwon Do and Hapkido as well as the sale of martial arts supplies to customers in the surrounding area. The Company was founded by Jim W. is 1990. 1.1 Services The MWMA Martial Arts school will provide its student instruction from white belt through black belt instruction in Tae Kwon Do and / or Hapkido. The studio anticipates having 200 or more students enrolled by the end of the second year. The studio will provide instruction for individuals three years and older. Classes will be held Monday – Friday, the schedule is subject to change as the studio grows in size. The MWMA Martial Arts studio will offer an after school program focusing on charter schools. Some additional income will be generated by the martial arts studio merchandise and apparel. 1.2 Financing Mr. W is NOT seeking any financing other than his personal input of cash to run this studio. 1.3 Mission Statement The MWMA Martial Arts studio’s mission is to become recognized as a traditional school and the best instruction...
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...T H E J O U R N A L THEORY & PRACTICE FOR FUND MANAGERS O F FALL 2013 Volume 22 Number 3 RISKBASED PORTFOLIOS special section The Voices of Influence | iijournals.com Pursuing the Low Volatility Equity Anomaly: Strategic Allocation or Active Decision? ERIK KNUTZEN ERIK K NUTZEN is the chief investment officer at NEPC LLC in Cambridge, MA. eknutzen@nepc.com FALL 2013 JOI-KNUTZEN.indd 75 I n the past several years, asset managers have built investment strategies based on historical evidence that lower volatility stocks earn superior risk-adjusted returns. These approaches are being called low volatility, managed volatility, minimum variance, or similar names. They seek to exploit what has been identified in studies by academics and practitioners alike as an equity pricing anomaly. This anomaly joins previously identified persistent stock market inefficiencies associated with low price-tobook and smaller company shares. This article evaluates the low volatility anomaly, its potential causes, whether it is likely to persist, and the role, if any, of low volatility equity investing in long-term investment programs. Based on historical information, we conclude that the low volatility equity anomaly appears to exist and can be explained by certain behavioral and structural biases of investors. But its continued existence into the future is less certain. We also observe that even well-documented anomalies experience multi-year...
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...Lenovo paid $1.25 billion for the IBM PC unit and assumed IBM’s $500 million debt. Lenovo paid roughly $650 million in cash and $600 million in securities. M&A Method For the stock acquisition, Lenovo issued 821 million new shares and 921.6 million non-voting shares to the IBM at the price of 2.675HKD per share. Under the deal, IBM took an 18.9 percent stake in Lenovo and become Lenovo’s second-largest shareholder. M&A Financing & Equity Investment Except Lenovo’s $150 million own funds, the company also accessed to financing from the international market. Lenovo successfully introduced strategic investors — three private equity firms “Texas Pacific Group”, “General Atlantic” and “New-bridge Capital LLC,” and got $350 billion strategic investment. Including the $350 billion, $150 million of which will be used as purchasing fund, the rest of about $200 million will be used as working capital. Lenovo issued 2.73 million shares of convertible securities and preferred stock, and 240 million unlisted warrants to the three investors for 1000HKD per share. Assuming that all the warrants fully exercised, the three investors will altogether hold about a 12.4% stake. In addition, three investors also absorbed 5-years $600 million loans from 20 banks to help Lenovo to acquire IBM PC. Furthermore, Lenovo got the $500 million...
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...Principles of Business Credit Chapter 1 - Credit: must involve exchange of values - 5 C’s of credit: character, capacity, capital, collateral, conditions - credit ( can be private or public - Credit Process: o First goes through a buyer who wants to buy a service or product o operating cycle: activities company goes through to produce and sell its goods and services o production stage: when material is converted into goods o manufacturer then sells finished goods to customers and customer pays for goods that were purchased on credit (collection stage) - Types of Credit o Public credit: government credit o Private credit: extended or used by individuals or businesses to carry on exchange of goods and services in private sector Private credit: - Investment credit - Consumer credit - Agricultural credit - Business credit - Bank credit Investment Credit: long-term borrowing of large amounts of money to finance productive assets. Primarily loans made to governments or businesses to raise money to pay for expansion modernization or public projects. - Bonds of fixed income securities (generally 10+ years) - Asset backed bond (backed by specific holdings for ex. Real estate) - Debentures (backed by financial standing, not assets) most common. - Secured bonds o Mortgage bonds o Equipment trust certificates (bonds issued to buy new...
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...Examining a Business Failure The Chrysler Group LLC was established from a not so successful merger between Daimler and Chrysler in 1998. It was in 2007 that Damiler sold Chrysler to Cerbus Capital Management. After filing for Chapter 11 bankruptcy, Chrysler Group LLC, formed in 2009 to establish a global strategic alliance with Fiat S.p.A., produces Chrysler, Jeep, Dodge, Ram, Mopar, SRT, and Fiat vehicles and products. With the resources, technology, and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler Group’s culture of innovation, first established by Walter P. Chrysler in 1925, and Fiat’s complementary technology that dates back to its founding in 1899 (Chrysler Group LLC, 2012). This paper will show what organizational behavior theories could have been used to predict the company's failure. Reasons For The Chrysler Failure A partnership is a mutually beneficial and continual relationship between seller and a buyer. Partners prefer to be based on dependence to each other than to behave as adversaries. Both will lose if any of them would abandon the partnership (Gherasim, 2001). Partnerships came in various forms such as mergers, acquisitions, or joint ventures. A company in trouble may utilize any given one as an option to achieve organizational growth or a global presence. Chrysler's reason for failure was that the partnership began solely on financial and economic information. What was not taken into account...
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...Douglas Design LLC: Strategy and Market Analysis Modernization and globalization in both developed and developing countries have changed consumer-buying patterns. Recently, younger generations are more prone to purchase low costing, portable contemporary furniture and home furnishing products. The purpose of this report is to ascertain how Douglas Design LLC should determine its strategic position in Washington DC and abroad. A) Brief Analysis of the Market: Office furniture sales in US largely depend on the US economy whilst the volume of home furniture mostly depends on the level of home sales. The profitability of individual companies is closely linked to volume they sell, since many costs are fixed. Large companies enjoy economies of scale* in purchasing. Small companies can compete effectively if they produce specialty items or high-quality workmanship that can sell for a price in accordance with what competitor sells. In general, the largest 50 companies generate about 40 percent of revenue. In US, Douglas Design LLC would face competition from Hellman Chang, Pottery Barn, Sears, Minimalista, Conran, Cratel & Barrel, Ethan Allen etc. Globally the main competitors are IKEA and Walmart, which sell very low cost and good quality furniture. The competitors offer differentiation in terms of styles and functions. Conran has a low cost strategy; Cratel & Barrel offers higher priced furniture in a box; Ethan Allen targets a more exclusive market; Wal-Mart is classified...
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...PLANNING FOR GROWTH: Kelly’s Sandwich Stop BMGT 110 (6981) – UMUC Final Project Professor S. Goyal Abstract Kelly has a well established lunch business and is ready to take the next logical step with her company, expansion. She will need to develop and implement a strategic addendum to her business plan, that will focus primarily on the growth of the company, in order to meet her range of goals. The proper business plan will entail more than just demonstrating how her revenue will grow by the numbers; Kelly’s growth strategy must attest to her capability to responsibly bring her food services to new customers and new markets, perhaps even introducing new products. Growth Strategy The first step that needs to be taken to in the organization and prioritization of Kelly’s growth strategy is for her to diagnose the health of her business. This preliminary step involves gathering the detailed information about each of Kelly’s four business divisions (finance, human resources, marketing, and operations), so that she is able to measure exactly how well the business is doing and pinpoint where changes will be needed. Kelly, preferably with an advisor, should scour through the business information, cash flow and income statements, balance sheets and statements of owner’s equity, analyzing her company SWOT (strengths weaknesses opportunities and threats) in order to better assess the company’s capabilities and expansion needs. The value of a SWOT analysis is two-fold, as not only does...
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...Sole Proprietorship: There is no legal difference between the Sole Proprietorship and the owner. They are easy to create and can mature as quickly or slowly as the owner wants. There can only be one owner and raising capital can be difficult, so they seek funding from financial institutions. ● Liability The Sole Proprietor is personally responsible for all debts and obligations. Creditors can claim personal assets of business owners and can sue if there is a breach of contract. Income Taxes All income rendered is treated as personal income for the business owner. Ordinary personal income has the highest tax rate, but there are different income takes rates depending on the type of income being taxed. Being able to plane to take advantage of a lower tax rate is difficult for many sole proprietors. Longevity / Continuity The Sole Proprietor is the sole owner, with no partners in the business, if the Sole Proprietor becomes disabled, retires or dies the business is dissolved. It does not the perpetual existence of a corporation. Control The Sole Proprietor makes all the decisions and has total ownership over finances. Profit Retention 100% profit retention allows them to use the profit at their discretion. they can reinvest in their current business, start a new business or use it for personal reasons. Location Expanding or moving is not very complicated. Using a DBA name allows a Sole Proprietor to legally do business under a name other than their full name. To move...
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