Provided by Leslie Cummins and Peter Tropper of the
International Finance Corporation
In this section you will learn more about:
Objective of the Investment Committee Meeting
- Formal decision by the Investment Committee to make or reject a proposed investment.
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Issues to Consider
- Who within the deal team is responsible for preparing the Investment Proposal?
- Should the format of the Proposal be standardized (see guidelines below)?
- Who receives copies?
- How many days ahead of the IC should the Proposal be circulated?
- How does the IC meet? (e.g. by phone, in person, by mail)
- Who participates in the decision making process?
- Who keeps track of decisions of the IC?
- Who keeps the minutes of the IC meeting (decisions, issues covered, additional issues or information required)?
- How and when to inform the proposed Investee of the decision outcome?
- Any outstanding issues to be resolved?
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Documents
- The Investment Proposal is a report issued to the Investment Committee, requesting approval for a particular investment, often subject to certain conditions. The report should cover the business case for making the investment. It should summarize the results of the due diligence, provide assurances that issues raised earlier have been dealt with adequately, steps taken to mitigate risks, and indicate the Fund’s exit from the investment.
A typical proposal would include the following topics:
- Investment Strategy: what is the business opportunity for the Fund?
- SWOT analysis
- Business & financial analysis of the Investee
- Management: quality & personal backgrounds
- Deal structure
- Fund involvement in management: Board seat? CFO?
- Expected exit
Download this Suggested Investment Proposal Outline.
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