INVESTMENT PROCESS
COMPANY PROFILE SUITABLE FOR INVESTMENT
- Based in Central America or the Dominican Republic
- Must be at or near cash flow breakeven
- From one of a range of sectors (healthcare, financial services, IT, retail, etc.) with the exception of: energy, real estate, and infrastructure
- Already is or has the potential to be the leader in a niche market and has the ability to grow
COMPANY PROFILE SUITABLE FOR INVESTMENT
Due Diligence: Rigorous Analysis Process
- CoreCo will screen a candidate against a matrix selection criteria focused on market position and competition, history of operations, financial and operational controls and management experience to select only the companies best poised for limited execution risk.
Due Diligence: Viable Exit Routes Assessment
- Most likely scenario for an exit will be a merger with or sale to an industry player such as a larger regional acquirer, or possibly a US or European buyer that is seeking greater exposure via acquisition to the growing regional market of Central America or to Latin America, in general.
Due Diligence: Macroeconomic Environment Fit
- CoreCo will take into account the location of the opportunity, whether it is a single-country investment or a regional investment. Regional companies are preferable for their inherent risk mitigation of a single country’s economy, politics and currency. CoreCo will then analyze the sector, the legal and tax issues that affect the investment.
Consensus-Driven Investment Decision
- If potential investments pass CoreCo’s requirements, and if there is a favorable relationship with the entrepreneur or management team, the opportunity is presented to the Investment Committee for evaluation and approval.
Deal Structuring
- Entails decisions around: convertible debt or preferred equity investment process, board representation, alignment of interests through enactment of incentive-based programs for management.
Execution
- CoreCo will take a lead role in providing comprehensive guidance to portfolio companies to add value that goes beyond the investment of capital. Possible areas of support include: experience-based guidance, hiring senior management, advice on strategy and marketing, and establishing banking and credit relationships.
Exit
- Investment liquidation and exits generally occur within three to five years of the initial investment. In some cas- es, CoreCo may decide to accelerate or delay the sale or merger of a portfolio company if, in its judgment, doing so will significantly increase the rate of return without raising the level of risk.