Good governance in a company will appeal to investors, who want to know their investment will be secure, as Oliver Woolley discusses in this TV show.

Investors and good governance

One of the main criteria for finding a successful investment is normally down to the quality of their management team, and you’ll get a lot of investors that will say the three most important things are management, management and management.  And certainly we’ve had some very successful businesses, which are still yet to exit, but it’s usually because they’ve got a very, very good strong dynamic experienced CEO, as well as a complete Board and a Board that’s adding value and can help steer the business through to exit.

Keep browsing shows on Inside Finance TV for more expert discussion on business investment and good governance.

Informed financial planning is essential when it comes to investments. Investment managers should be well informed of tax rules so that no errors are made. Michael Pagliari explains further in this business TV show.

Informed financial planning and investments

There are different categories of planning, so for resident domicile UK clients the principles are pretty well-established, there are certain types of securities that should and can sit perfectly well in portfolios and there are other types of securities that shouldn’t. So, to give an example, there are some tax efficiencies through using fixed income securities which trade at which trade at discounts, there’s advantages in using OECs but there are some other instruments which effectively take a capital gains tax charge and transform it into an income tax charge at, you know, a much higher rate. And then if you move on to the sort of res non-dom world, that’s a very sort of … a much more complicated area with much more potential for error. So for example it’s very important that income and capital are separated, managed in separate buckets; if those are mixed there can be very severe tax consequences. So it’s really basic housekeeping-type issues but extremely important that the investment manager has a good handle on them. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.

Interested in informed financial planning? Why not explore more TV shows on Inside Finance?

Business risk can come from many unknown variables. When working with an investment manager people should be clear about how much risk they are prepared to take, as Michael Pagliari explains in this TV show.

Investment & business risk

I think that you know individuals sometimes tend to give misleading answers when asked about the amount of risk that they want to take. So for example a typical response that you get from an entrepreneur is ‘oh, I don’t really want too much risk but you know I’d like to make 10% returns’. Now in the current sort of environment that we exist, where interest rates are at zero, 10% is a very ambitious rate of return, so the statement is actually pretty incoherent. So at that point I think you need to dig deeper and find out exactly what the client needs as a minimum requirement and make sure that it is coherent with his underlying thought process. They understand risk very well in their own business, in the context of managing financial assets my experience has been that that knowledge is of the same type of thought process does not necessarily transfer itself well to their financial assets. And that can mean, that can mean that either they take on too much risk in their financial assets or they take on too little. Ideally, I actually think that it takes about a couple of years until you really understand a client’s risk profile and as you get to know him you make some adjustments. So my personal suggestion or my personal methodology is to start with a relatively conservative risk profile until I feel that I really understand and know the client better. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.

Interested in informed financial planning? Why not explore more TV shows on Inside Finance?

   

Business risk may hit in unexpected ways during an economic downturn. In this TV Doug Hall discusses a case where a contractual breach caused major loss.

A business risk case study

A commercial contract between two parties has to be mutually advantageous, so I acted for a client in the Czech Republic a couple of years ago and they supply components which go into engines for ships, very large components. In 2007 ship building in the far east was booming and err, their Korean customer wanted to make sure they can sufficient of these components, they wanted to secure suppliers, so they’d make a contract with my Czech clients. In 2008 the world changes, suddenly they literally stop building ships, so what was previously mutually advantageous suddenly is onerous for the Korean party to that contract, they don’t want those components anymore so they breach, they say ‘We don’t care about the contract, we’re not going to buy your components anymore’. So firstly there’s a question on liability, where they entitled to breach. The second question is what has the Czech manufacturer lost by reason of not being able to supply those components. So the question is how many units they will have sold and what profit they would have made per unit and both of those variables sound very simple but if you imagine how you can make a profit or how you’d measure profit in a very large manufacturing business there’s all kinds of detail in how you do that. So that’s broadly a kind of situation where a breach causes a loss. So in that case err it was tens of millions of dollars, you could have exactly the same situation where it’s £10,000, err one party to a contract decides they don’t want to continue with it, the other party says ‘Well if you had continued I would have made some money and I want to be compensated for the money that I’ve lost as a result of your breach’.

Browse Inside Finance for more fantastic videos on business risk, and follow us on Twitter @InsideFinanceTV    to have your say on the big business issues.

Business innovation skills need to be harnessed in the right environment. In this TV show Simon La Fosse discusses government helping entrepreneurs grow.

Entrepreneurial business innovation skills are valuable

The heat you see on the west coast of America that is leading to massive salary inflation and people moving all too frequently to try to be able to build these businesses, mean that you’re seeing west coast US businesses saying “We should be setting up in, not setting up a peripheral business in London but maybe we should be setting up in London”.  The same with some of the Nordic countries, so there’s some really exciting stuff happening, that I think has proper momentum and, you know, I’m not a great fan of government intervention, I don’t know whether you call it government intervention or just enabling things to happen, but I think they should be credited with creating an environment that is much more conducive to the growth of entrepreneurialism in a time in our lives which is so exciting, this is, you know, akin to the industrial revolution, it’s just the digital revolution, and I feel lucky to be a part of it and I’m hanging on, I’m trying to keep up with what’s going on.

Inside Finance will continue to produce great TV shows about entrepreneurial business and business innovation skills.

 

There are many business benefits of the UK environment as Stephen Drew of Smith & Williamson discusses in this TV show.

UK's business benefits

I think there are a variety of reasons as to why people would choose the UK as a good place to invest. Certainly we have some interesting sectors that appeal to a large number of investors from outside of the UK, and in particular we’re seeing a lot of activity in life sciences, the creative industries around professional practices and professional services and in the technology space. So they’re sectors that are seen as high growth and there are foreign investors that want a piece of that action and therefore they have a certain amount of appeal to see how they can get involved with those sectors. When combined with a business environment that’s reasonably friendly and it’s quite easy to get involved with those businesses, to make the investment programmes, and to start fresh businesses and that makes it an easier investment decision compared to other territories. The UK government has been very helpful in trying to make the taxation environment business-friendly and therefore there are attractions again for encouraging foreign investors to actually put cash into the UK economy, which will help the general improvement in what we’re looking for within the UK as well.

If you are interested in discussion around UK business benefits and investment in different environment, please browse more TV shows on Inside Finance.

The attitude to risk form those in high risk environments is to exercise caution as Michael Pagliari explains in this TV show.

A cautious attitude to risk

I actually have a few clients that have done exactly that and I’ve actually found that there I’m on the more cautious of our clients.  So their business risk, if you like, is very high and they’re well aware of it and the last thing they want to do is suffer losses under their financial asset portfolio, so I’ve tended to find those people the most cautious of all the clients that I manage money for. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.

Keep visiting Inside Finance for more great videos on attitudes to risk and similar subjects.

Business risk is always there, but some entrepreneurs will feel more willing to take risks is they have a good understanding of a sector, as Michael Pagliari discusses in this TV show.

Business risk-takers

I think you know risk appetite tends to depend on familiarity, so if a client is very familiar with a particular asset class he may well be prepared to take a greater amount of risk. I mean some entrepreneurs take extraordinary amounts of risk but only because they feel that they fully understand a sector or the dynamics that underline that sector. So where you have that familiarity I would certainly feel more confident taking more risk but where the client is less familiar with the product or less familiar with the structure I would think twice about or let’s say I would have to have a much higher conviction level before pushing a particular product or a particular strategy. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.

If you found this TV show interesting and want to hear more about business risk and similar subjects then browse our videos and follow @InsideFinanceTV on Twitter.

The hospitality industry would benefit from investment in technology and infrastructure. In this TV show Sir David Michels explains that government successfully invests in failed industries.

Technology, infrastructure and investment

I don’t think the hospitality industry generally needs any subsidisation. It will always ask to pay less tax, to be more equal to our European partners, but I don’t think that’s the main thing that the hospitality industry would ask for. It would ask for investment in infrastructure, investment in technology where it is appropriate, investment in an industry where they have never invested before. Government has been wonderful at investing in failed industries; Coal, steel, I won’t give the whole list. But it always seems to put its money on industries that are no longer relevant. Maybe not always but very often. What it doesn’t do is find industries that are growing and invest in them because from their view they don’t need help. History tells us that if you invest more in the successful, and less in the unsuccessful, you’ll get a higher return. Now it’s our fault if we haven’t been able to convey that message, but it’s one message we are desperately trying to convey.

If you enjoyed this video about technology, infrastructure, and investment, please explore more TV shows on Inside Finance TV

Informed financial planning will help businesses avoid mistakes but can be rushed in initial set up. In this TV show Stephen Drew discusses common mistakes that foreign businesses make.

Informed financial planning takes time

The sort of mistakes you see from inbound businesses is often around either misconceptions in terms of what the market opportunity really is, or just trying to do things in the wrong order. So like all investment programmes, whether it’s in your host country or whether it’s in a new market, it’s all about planning, you need to make sure you’ve thought about what the opportunities are, you’ve carried out your market appraisals, you’ve worked out what resources you need, you’ve carried out your readiness assessment. So all the initial phases of any sort of investment decision need to be made, regardless of where you’re going to make that investment. And for me, when people are struggling to get the sort of traction they’re looking for as quickly as they would like, it’s often because they just haven’t properly thought-through and properly planned their approach to the market on arrival.

If you are running a business or just want to know more about informed financial planning, keep and eye out for similar shows on Inside Finance.