Domestic and international acquisitions are always active for investment funds, private equity houses and venture capitalists in order to generate attractive returns for investors.  Nonetheless, the more vigorous regulatory environment and the more complex investment structure impose higher hurdles for the industry players.

Governance Demand from Investors

Risk management and transaction transparency are becoming part of the key assessment criteria for the performance of players in the finance sectors.  Board members are required to adequately assess the potential risks of investments before making decisions.  AVISTA is experienced in providing independent advisory services to identify any key risks in the deals and thus to enhance the overall governance process for clients.

Sophisticated Investment Tools

Instead of traditional direct cash investment in equity, PE/VC investors tend to incorporate more complicated terms and investment structures, in order maximize their possible return while mitigate as much uncertainty as possible.  Preferred shares, warrants, profit guarantee and contingent consideration are those normally introduced in the transactions.  Clear documentation on the pricing and valuation approaches and assumptions should be properly maintained.  As a result, pricing and fair valuation of these investment subjects could be a challenge for investors.  AVISTA’s professionals have extensive experience in dealing with these issues to assist management in implementing a sound and effective evaluation process.

  • Holly Futures Co., Ltd (3678.HK) on pre-IPO valuations of its intangible assets and the impairment assessments.