Custom «Investment Opportunity» Essay Paper Sample
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The investment opportunities provided by the company show that business potential is attractive, but there are certain investment risks. Sponsorship would be contributive due to the provision of property rights and entering into the agreement on ownership. Investment conditions and offerings reflect the company’s ability to collaborate with its stakeholders. Brookwood CP Investors, LLC provides fair investment opportunities.
Risk and Rewards
Accepting the investment offering from Brookwood CP Investors, LLC is associated with a number of risks. For example, there is a lack of operating history of the management personnel, although these employees have experience in real estate management and securities placement. Consequently, it is not possible to be fully confident in the property manager responsible for all the ongoing operations related to property. In addition, the company, as a tenant-in-common, consists of affiliates and subsidiaries that may have conflicting interests, which may affect the whole business ( Argyrople, 2015).
On the other hand, the company provides investors with excellent distributed net income. Almost all the obtained funds are dedicated to the investors and their benefits according to the conditions of return. Only 1 percent of total income is paid for the managerial efforts. This is relatively low in comparison to the conditions of other companies, including those with limited liability. Buying a unit will be profitable, and rewards increase if an investor possesses a larger number of units. This is due to income distribution according to capital contributions.
Collaboration with Brookwood CP Investors, LLC offers risk reduction for sponsors. Therefore, such a partnership would be advantageous because these measures ensure fairly and properly risk-adjusted investment returns (Brookwood Group, 2013). Therefore, the company may stimulate the directions of collaboration with partners and sponsors. Collaboration engages sponsors from both private and public sectors. However, this diversity is not distinguished or specially noted in the memorandum.
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According to numerical assumptions, sponsorship may be beneficial in the public sector. Financial rewards of sponsors increase with the accelerating approvals of projects and collaborative partnership. Nevertheless, all interests, whether those of public or private sector sponsors, will by supported by the transparent open-book approach.
The analysis of sensitivity of investment in Brookwood CP Investors, LLC shows how the change in each input invested amount of capital influences the present value, and other output indicators reflect the efficiency of investment management in the event of the constant state of other variables. The sensitivity analysis revealed a slight change of net present value varied dependently on the discount rate and a number of purchased units according to the terms of offering (Argyrople, 2015).
Thus, NPV is sensitive to the number of purchased units kept by a single investor rather than the discount rate. As the company offers a contributive price per unit, the reward is contributive for investment decisions.
The Deal and Specifics of Investment Memorandum
The memorandum and investment offer seem attractive and detailed. The information is delivered in a proper and gradual way to attract investors and show the advantages of the proposal. Although the main investment positions confirm the profitability of investment and secured returns, the memo lacks previous spreadsheets and outcomes of financial performance. An investment decision is usually based on the analysis of previous success, failures, and managerial contribution. Therefore, the company should provide potential investors and sponsors with appropriate information. Despite this shortcoming, the investment thesis seems agreeable and acceptable. Therefore, an investor should accept this offer in the short-term perspective.
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The company company’s investment offer is associated with both financial rewards and potential risks. Although the business is promising, the net present value of income is sensitive to external changes and an investor’s capital contribution. The memo contains ample important and detailed information, but it does not cover the issue of previous performance experience. The offer is attractive and should be accepted.
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