Investment strategy development for Large Business

Investment strategy development for Large Business

Investment strategy development for Large Business

Updated Jun 8 

Investment strategy development for Large Business

An investment strategy is a term used in the financial and investing world to describe an approach to investing. Essentially, an investment strategy is a plan for selecting financial vehicles tailored to the investor’s needs and goals, in addition to their risk appetite, specific interests and time horizon.

The development of an investment strategy is considered as the creation of an activity plan for any business, laying the foundations for the rational allocation of resources (capital, assets) to achieve the greatest efficiency over a certain time horizon.

Principles, factors and stages of investment strategy development

Large investments, which are the driving force behind the development of the global economy, mean long-term investment of capital for profit. A set of measures for the implementation of investments is called an investment strategy. The investment strategy of an enterprise is often considered as a system of long-term goals and objectives of investment activity, as well as the tools and mechanisms to achieve them.

The main task of any company in the development of an investment strategy is to find and provide the effective ways to implement investment projects or their parts.

The investment strategy of a large business can take two forms:

{i} Active strategy: growth of the business based on the implementation of development projects, involving active investment in new projects, expansion and modernization of existing assets.

{ii} Passive strategy: investments are aimed at maintaining the existing production level (usually associated with a deteriorating economy and contraction of markets, as well as a decrease in the availability of capital

The process of developing an investment strategy involves studying the existing potential of the enterprise and determining its ability to function effectively in the external environment, which allows you to reasonably set goals and determine the objectives of innovative business development.

This should become the foundation for successful investment activity. In this context, it is important for management to compare a range of alternatives, selecting promising investment projects based on their risk and potential profitability under expected conditions. Comparison of alternatives in the process of developing an investment strategy should take into account the key phases of the life cycle, which will allow the finance team to consider the main risks associated with each of the projects.

 Thus, a correctly defined strategy allows companies to form an investment portfolio that is optimal for specific conditions, which in practice will help improve business efficiency and create prerequisites for the company’s sustainable growth in a certain time horizon.

Investment strategy management principles

Large business differs from SMEs, first of all, in the complexity and multi-vector nature of the decisions made. Investment in this case requires a deeper and more comprehensive analysis, given the complex contractual structure, the close relationship of any enterprise with related sectors and a high level of uncertainty.

Investment strategy selection factors

Being the main action plan of any business, the investment strategy should determine the priority areas, methods and forms of investment, the nature of the formation of investment resources and the sequence of stages in the achieving of investment goals. This should be based on the correct analysis of external and internal factors, the competent setting of goals at different time intervals and the rational distribution of financial and other business resources.

Investment strategy selection factors include the following:

•Expected rate of return.

•Investment horizon (planning period).

•The economic health of the company, as well as its partners.

•The level of management knowledge and their business experience.

•The willingness of stakeholders to take risks.

•Access to financial resources (credits)

.•Market situation etc.

The choice of an investment strategy development for large business should always be considered in close connection with a number of external and internal factors of business activity, including production, financial, personnel, marketing, environmental and others.

This activity should be carried out in the context of a comprehensive in-depth analysis of the investment climate both in the country and in a particular industry. Thus, it is a multi-level process that includes an assessment of the macroeconomic and microeconomic aspects of the business.

Stages of developing an investment strategy

Any investment involves reducing or abandoning current consumption in favor of future, albeit uncertain, benefits.

The purpose of the investment strategy is to achieve the highest possible rate of return with an acceptable level of risk, which largely determines the further actions of management.

The process of forming an investment strategy includes the following:

  1. Determining the object of study, setting specific goals and objectives of investment analysis, as well as drawing up a plan for analytical work.

2. Formation of a system of indicators to characterize the object of analysis (for example, a set of parameters for comparing alternative projects).

3. Collection, training and analysis of the necessary information using advanced quantitative and qualitative methods of analysis.

4. Establishing the relationship and the level of influence of factors based on the results of the investment activities of a particular company or its division.

5. Search for unused and promising reserves in order to increase the efficiency of investments and the company’s investment activity.

6. Preparation of conclusions and recommendations based on the results of the work done.

Investment strategy development for Large Business

Fundamental analysis for choosing an investment Strategy

Fundamental analysis of securities, companies or projects in a broad sense is an assessment of the real value of a potential investment object through related economic and financial factors of various levels. The basic information used in fundamental analysis is information about the economy and the market, as well as all available financial information about a company or project.

Development of an investment strategy for large businesses: What We Do

The essence of investment engineering looks simple and clear, however, the correct application and interpretation of each indicator and each model will require practical financial experience.

For these reasons, the development of an investment strategy requires the involvement of external experts. Experienced teams that specialize in investment services increase the chance of success.

Havelet Finance Limited, an international loan/Financier is experienced and engaged in long-term financing of large projects and the organization of project finance (PF) in industry, energy, infrastructure, agricultural business, mining and other sectors.

We provide clients with a full range of services for large businesses:

• Long-term loans for up to 20 years.• Organization of project finance (PF) schemes.• Operations with letters of credit or bank guarantees.• Financial modeling and consulting.• Investment engineering.

Havelet Finance Limited, in cooperation with major international partners and high net worth angel investors, can contribute to the implementation of investment projects based on EPC contracts.

The services of a general contractor can be useful in the construction, modernization and expansion of capital-intensive facilities (factories, mines, refineries, LNG terminals, power plants, water treatment plants, gas pipelines, roads, real estate, etc.) Learn more about the benefits of modern engineering and financial tools for your.



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