Lessons in finances by FIFA World Cup Soccer 2014

World Cup soccer has lessons that can be applied to how we choose to live our lives. The National Post has a great article on the topic:

When Robin Van Persie jumped into the air and headed in the goal against Spain, the crowd went wild. Van Persie earned his reputation as The Flying Dutchman and one of the world's best players. But those astonishing plays are the exception, not the rule; teams can’t rely on them to win games. At the end of the day, good defensive soccer moves are equally important as jaw-dropping goals, although they’re often given less attention. If you want to win, stopping opponents at midfield may not bring in the glory, but it’s a vital component of the game. It’s great to score five goals, but you still lose if they score six goals against you.

The same is true in the game of personal finances. Just like in soccer, if you want to succeed, you need a good defensive strategy. It’s nice to bring in the big bucks, but if the money leaves your bank account faster than it comes in, at the end of the day, you will lose the game.

Jacoline Loewen and be reached at email - jacoline.loewen "at" ubs.com

5 Ways investing is the same as running a business

Many of my baby boomer clients wonder whether they should keep their wealth in their businesses, or sell and invest the proceeds elsewhere. While they understand the need to diversify, they find investing in other markets less appealing since they don’t have the experience and perceive it to be a greater risk.

Working with business owners, my challenge is just as much about helping them invest money as it is helping them change their perception of themselves. You see, many of my clients view themselves as business owners when they should be thinking of themselves as family wealth managers. This is a surprisingly difficult shift for owners to make.

I first heard about this concept from a multi-generation family business owner who viewed his role as “caretaker of the family wealth” and, given that they had been successful for four generations of the business, there was clearly a message here.

Another difficulty for owners is to realize that their level of risk has changed. There are now a number of different investment products designed to deliver returns against specified risk levels such as hedge funds which help diversify some of the risks associated with owning only equities. The equity stock market has long been the primary diversification option, but fears of volatility, crashes and other forces beyond the control of a business owner have often seen only a small portion of their wealth invested. Today business owners can tap into a far wider range of investment options, as well as good portfolio managers at reasonable prices.

The change in mind set from business owner to family wealth manager is daunting, says David McLean, founder of the ROMC Fund. His advice applies to business owners who are used to weighing risk and the likelihood of returns, and who approach their investing with the same passion as owner-operators. Here are a few ....read the rest at The Globe and Mail.

Jacoline Loewen is the director of business development of UBS Bank (Canada), named Best Private Bank Globally 2014. Ms. Loewen is also the author of Money Magnet: How to Attract Investors to Your Business. You can email her at jacoline.loewen@ubs.com or follow her on Twitter @jacolineloewen.

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River Cree with Crosbie issues the first cross-border bond from a Canadian First Nation

There has been a complete make over of the Thomson Reuter PE Hub website and the editor, Kirk Falconer, is scooping up stories on a usually closed industry of private equity. Here is his latest story on the innovative deal done by Crosbie with one of the leading First Nations casino enterprises:

River Cree Enterprises said it has issued the first cross-border bond from a Canadian First Nation-owned entity, tapping a group of Canadian and U.S. institutional investors. The bond issue, estimated by The Globe and Mailat $200 million, has helped facilitate the Enoch Cree Nation‘s acquisition in partnership with River Cree Enterprises of sole ownership of the Edmonton, Alberta-based River Cree Resort and Casino, buying out minority partnerParagon Gaming. Advice in connection with the acquisition and financing strategy was provided by investment bank Crosbie & Co, which confirmed that the bond issue attracted interest from investors that are active in alternative assets markets. The casino will be managed by gaming property operator Sonco Gaming Inc of Halifax, Nova Scotia. Torys LLP was one of the legal advisors on the deal.
Read the rest here

Cover-FX discovers that Private Equity does take your business to the next level

The Globe and Mail has a story of value to entrepreneurs and business owners thinking about growing their company, but choking from lack of capital.

Deals with Canadian firms are being closed by large and sophisticated investors that, at first glance, seem to fall well below the revenue threshold usually required for a chat over lunch – never mind an acquisition.

Private equity and strategic buyers are dipping their nets into shallower waters and scooping up small companies. U.S. investors, in particular, are not waiting for businesses to grow organically because they recognize there’s a risk they might attract the eye of a Canadian equivalent. Once a business has signed with a tier-one private equity firm or a strategic partner, there won’t likely be room for another investor, unless it’s at a significantly higher price.

Sophisticated investors have the experience, and the research and consumer data, to identify what might be tomorrow’s stars, given some additional capital and oversight. The trick is to spot small businesses that already have a product with market leadership potential. The company must be able to replicate its efforts in multiple markets and address a highly specific customer need.

The founders and shareholders need to demonstrate they have the operational competence to take capital and use it to roll-out an expansion strategy. Lee Graff, co-founder and president of Cover FX, a foundation cosmetics company, landed her investment partners through serendipity.

Ms. Graff was invited to lunch, under the impression she was meeting with the owner of a U.S. retail chain who was interested in carrying her cosmetics. She went over the Cover FX story for two hours. First, she talked about the specific customer need the company addressed – Ms. Graff had worked with a dermatologist for many years, mixing colour and textures onto patients’ faces.

Read the rest of the article. 

Jacoline Loewen, Advisor on Sale of your business or partial Sale of your business.
416 362 1709

Barry Critchley, Financial Post: Sluggish tone of Canadian mergers and acquisitions

How is the Canadian economy's health? One measurement is to examine the number of mergers and acquisitions being sealed across the country. As usual, finance guru, Barry Critchley, Financial Post gives details in a great article in the Financial Post. It sounds as if it is a good time  to sell your business:

Crosbie & Co. has crunched the numbers and the sluggish tone of the Canadian mergers and acquisitions continued in the recently completed third quarter.

“According to Colin W. Walker, Crosbie, Strong value in the face of weak activity partly reflects the fact that that many transactions are getting done at good valuations. Not only are there generally more buyers than sellers right now, but buyers are paying up for good quality companies, added Walker noting that valuations are being stretched because of the exceptionally attractive financing terms currently available”.

Click to read the article by Barry Critchley, Financial Post

Click to read the full Crosbie M&A Report

Planning for the partial or complete transfer of ownership of a business?

PMAC 2013 Annual Conference & AGM

Session V, Panel I - “Business Succession: The Preparation & Process to Sell Part or All of your Firm Internally or Externally”

Moderator:
Paul Harris, Director, PMAC and Partner, Avenue Investment Management

Panelists:
Allen Church, Partner, Specialty Tax, MNP LLP
Arthur Heinmaa, CEO, Toron AMI International Asset Management
Michael Mezei, Director, PMAC and President, Mawer Investment Management
Arlene D. O'Neill, Partner, Gardiner Roberts LLP
Maj-Lis Vettoretti, Managing Partner, Shimmerman Penn LLP
Colin W. Walker, Managing Director, Crosbie & Company Inc.

Planning for the partial or complete transfer of ownership of a business is a reality many firms will be facing over the next 5 to 10 years. Whether you are bringing in an outsider to transfer partial ownership or planning for the complete sale of your business, having the right plan and resources to assist with the transition are key. This session will provide some building blocks for successfully managing ownership change and aligning interests, including the following:

·         Building a successful internal management succession plan

·         Purchase and sale transactions valuation & negotiation - pitfalls/traps

·         Legal considerations

·         The process: making the deal successful

·         Integration

·         Recent valuation experiences

Date: Tuesday, November 26, 2013
Time: 8:00 am-4:30 pm EST; Networking Reception to Follow
Location: Hilton Toronto – 145 Richmond Street West
Cost: Members $390 + HST | Non-Members $540 + HST
Contact Eleanor Bushell at ebushell@portfoliomanagement.org

Contact Jacoline Loewen, 416 362 1709

Entrepreneurs who obtain angel investing are more likely to survive

Harvard Business Review did a great story on the value of early stage investors. They do make entrepreneurs get professional very fast. The owner of the business finds out that they are not the only person in the room who knows what they are doing - there are some financial activities that add a significant boost to revenues. Problem that I see, owners resist getting in Angels or VCs because they think it will take away their profits. Here is a quick excerpt from HBR:

A 2010 New York Times story on lean start-ups cites experts who see a “shrinking role for venture capitalists in seeking and backing promising young entrepreneurs,” as alternatives including angel investors gain favor. Fresh research by Josh Lerner and William Kerr of Harvard Business School bolsters this argument with evidence that entrepreneurs who obtain angel investing are more likely to survive at least four years and show improved performance.

Another reason VC’s star is on the wane: Research by University of Chicago economist John H. Cochrane shows that investments in VC portfolio firms did not outperform investments in other NASDAQ stocks during the boom period of the 1990s.

In short, the VC business is bad,

15th Annual Canadian Private Equity Summit - InSight conferences

InSight Conferences presents the Private Equity Conference 2013

15th Annual Canadian Private Equity Summit
The Ongoing Evolution of Private Equity

November 13, 2013
Westin Harbour Castle | Toronto
Gala Dinner Fireside Chat Featuring:

• Hamilton E. James, President and Chief Operating Officer, The Blackstone Group LP
• Jane Rowe, Senior Vice-President, Teachers’ Private Capital and Infrastructure, Ontario Teachers’ Pension Plan 

4:30 | Getting the Deal Done
Moderator: Mark Borkowski, President, Mercantile Mergers & Acquisitions Corporation
Lorne Jacobson, Senior Managing Director and Co-Founder, TriWest Capital Partners
Ian Macdonell, Managing Director, Crosbie & Company Inc.
• Sourcing and finalizing the deal in a competitive market
• What business owners and shareholders seek in a PE partner
• Sectors that are hot
• Working on cross-border deals
• Effective use of placement agencies

Please contact John He at 416.642.6133 or jhe@alm.com to book your table now!
To register online visit www.canadianpesummit.com

Build a more diverse client list, add value to your company's sale price

A business owner’s greatest worry when trying to sell the company is the prospect of receiving an inadequate price by the acquirer or being undervalued.

One of the drags on the value of a business is customer concentration. For owners planning to sell in the next five to 10 years, exporting is one way to diversify a customer base. “It’s too risky to export,” entrepreneurs often say when they’re asked about taking their brands beyond the Canadian market. “It would be a financial drain and a time suck.”

Read more at the Globe and Mail, Small Business.

How exporting can boost the value of your business

By building a more diverse client list you can eliminate the drag that is customer concentration

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Anyone want to buy a business?

The Globe and Mail, WALLACE IMMEN, had a good article on Succession:

Marketability is a particular issue for companies with enterprise values below $30-million, according to business broker Mike Haines, managing partner of M & A Network in Oakville, Ont.. “Retail is the most hard hit and hardest to sell, along with restaurants. No one really wants to get into labour intensive properties that have minimal returns and face risks due to rising transportation costs.”

You have to reconfigure the business so it runs smoothly without you, he advised. “One of the best measures of a good business is if the owner can go away for three months and the business can still continue to operate smoothly and the customers don’t miss the owner. That’s what a buyer wants to see.”

A strategy that can pay significant dividends is to bring in an investor to give the business a boost, suggested Jacoline Loewen, director of Crosbie., in Toronto. “The advice we give is five to 10 years before you want to sell, bring in strategic investors or private equity, that will buy a portion of the business,” typically about 30 per cent, she said.

“It’s a really good discipline for owners, because many entrepreneurs are used to having everyone agreeing with them because they have all the power. Sole owners also find it hard to believe that someone else would take the business and grow it far beyond what they’re doing currently. An equity owner will ask questions and look for efficiencies and ways to grow the business, Ms. Loewen explained.

“It may be the first time an owner is challenged to quantify their success and go through a comprehensive strategy process, she said. You’d be amazed how few small-business owners have figured out their key performance indicators and what drives the success of the business.”

Jacoline Loewen, 416 362 1709