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Proposal for Establishing An Investment Club

Proposal for Establishing An Investment Club. Outline. Background My Proposal Investment Opportunities & Scenarios Responsibilities Risks & Mitigants Next Steps. Background. Over the past 20 years quite a number of us has become very involved with our sets’ activities……

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Proposal for Establishing An Investment Club

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  1. Proposal for Establishing An Investment Club

  2. Outline • Background • My Proposal • Investment Opportunities & Scenarios • Responsibilities • Risks & Mitigants • Next Steps

  3. Background • Over the past 20 years quite a number of us has become very involved with our sets’ activities…… • Our bond which was forged by virtue of our coming together on that faithful day in 1986 has grown stronger despite all odds

  4. Background [2/2] • We all have specific expertise in our own professional fields • This has created business opportunities at one time or the other for all of us • We have also helped each other financially at one point or the other

  5. My Proposal • Use our varied and collective backgrounds & expertise to create a source of residual income for all • Form an Investment Club where each member contributes at least N5,000 monthly into a pool dedicated towards joint investments

  6. My Long Term Vision • Evolve the club into a SEC registered cooperative bank/mutual fund open to individual and institutional investors • With the knowledge we gather, spin off a company that can administer activities for other investment clubs for a fee • Legal, investment, governance etc

  7. Building an Investment Pool • With 20 members contributing N10,000 per month • N1.2 million in 6 months • N2.4 million in 12 months • N4.8 million in 12 months @ N20,000 p/m • With 30 members contributing N20,000 per month • N7.2 million in 12 months!!

  8. Immediate Investment Opportunities (Year 1-2) • Low Risk / Low Return • Fixed Income Securities • Money Market Trading • Medium Risk / Medium Return • F.I Securities in West African markets • Investments in existing funds • Investment in Bureau De Change / Currency Trading • High Risk / High Return • Equity • Lending to Members • Lending to 3rd Parties

  9. Investment Scenarios @ 6 Months • Pool Size: N1.2 million • Asset Allocation

  10. Projected Return • Average portfolio return 34% • N1.2 million pool is now N1.6 million • N411,600 to either share as dividend or reinvest

  11. Next Steps • Formalize creation of the club • Draft club charter • Open bank account(s) • Determine convenient meeting place • Create an online meeting place (in addition to BB) for sharing documents etc. • Establish committees & elect members • Start investing

  12. Committees & Immediate Responsibilities

  13. Risks & Mitigants • Friendships will get destroyed • Establish clear club rules • Apathy in performing club duties and contributions • Disciplinary code and exit members • Default risk on lending • Follow adequate credit risk mgt. guidelines

  14. Conclusion • An investment club is a business. • We will all need to WORK and take on responsibilities for it to succeed • Its not a get rich quick scheme • The rewards can also be huge in the long run with investments in real estate, other businesses, agriculture, infrastructure, hospitality etc.

  15. Up for Discussion

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