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Outline  Background  My Proposal  Investment Opportunities & Scenarios  Responsibilities  Risks & Mitigants  Next Steps.

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Presentation on theme: "Outline  Background  My Proposal  Investment Opportunities & Scenarios  Responsibilities  Risks & Mitigants  Next Steps."— Presentation transcript:

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2 Outline  Background  My Proposal  Investment Opportunities & Scenarios  Responsibilities  Risks & Mitigants  Next Steps

3 Background  Over the past 20 years quite a number of us has become very involved with our sets’ activities……  Our bond which was forged by virtue of our coming together on that faithful day in 1986 has grown stronger despite all odds

4 Background [2/2]  We all have specific expertise in our own professional fields  This has created business opportunities at one time or the other for all of us  We have also helped each other financially at one point or the other

5 My Proposal  Use our varied and collective backgrounds & expertise to create a source of residual income for all  Form an Investment Club where each member contributes at least N5,000 monthly into a pool dedicated towards joint investments

6 My Long Term Vision  Evolve the club into a SEC registered cooperative bank/mutual fund open to individual and institutional investors  With the knowledge we gather, spin off a company that can administer activities for other investment clubs for a fee Legal, investment, governance etc

7 Building an Investment Pool  With 20 members contributing N10,000 per month N1.2 million in 6 months N2.4 million in 12 months N4.8 million in 12 N20,000 p/m  With 30 members contributing N20,000 per month N7.2 million in 12 months!!

8 Immediate Investment Opportunities (Year 1-2)  Low Risk / Low Return Fixed Income Securities Money Market Trading  Medium Risk / Medium Return F.I Securities in West African markets Investments in existing funds Investment in Bureau De Change / Currency Trading  High Risk / High Return Equity Lending to Members Lending to 3 rd Parties

9 Investment 6 Months  Pool Size: N1.2 million  Asset Allocation Portfolio% of HoldingsRate of Return (p.a) Low Risk40%12% Medium Risk25%22% High Risk30%80% Cash5%0%

10 Projected Return  Average portfolio return 34%  N1.2 million pool is now N1.6 million  N411,600 to either share as dividend or reinvest Portfolio% of HoldingsRate of Return (p.a) Low RiskN480,000N57,600 Medium RiskN300,000N66,000 High RiskN360000N288,000 CashN60,000N0 TotalN411,600

11 Next Steps  Formalize creation of the club Draft club charter Open bank account(s) Determine convenient meeting place Create an online meeting place (in addition to BB) for sharing documents etc. Establish committees & elect members Start investing

12 Committees & Immediate Responsibilities Executive Committee Investment Committee Governance & Administration Credit Draft vision & mission Select bank(s) Open accounts Draft investment strategy & policy Track pool funding by members Track portfolio returns and report Dividend and cashing out policy Draft club charter/ constitution -Joining & exit of members -Disciplinary code -Duties of committees -Guidelines for expenses and reimbursement -Template for Minutes & agenda Rules for lending to members and 3 rd parties Credit administration (or supervision of outsourced agent) Design loan application forms etc.

13 Risks & Mitigants  Friendships will get destroyed Establish clear club rules  Apathy in performing club duties and contributions Disciplinary code and exit members  Default risk on lending Follow adequate credit risk mgt. guidelines

14 Conclusion  An investment club is a business.  We will all need to WORK and take on responsibilities for it to succeed  Its not a get rich quick scheme  The rewards can also be huge in the long run with investments in real estate, other businesses, agriculture, infrastructure, hospitality etc.

15 Up for Discussion


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