A Glimpse

Can invest up to 80% of total equity and can work on consortium upto 90% of total equity
Can invest up to 90% of defined project in debt from sourcing from partners
Invests between USD10M to USD10B per Project.
No collateral required but Need Positive Net Assets Value
No interest to be paid annually
Value Addition of the company with our expertise
3-15 years funding with ‘harvest period’ of 6 months.
IRR – minimum 12%-35%
Need to do Detailed Due Diligence of Market, Strategy, Finance, Management from Big Four
Should have strong reference for Investment on the project

Basic Criteria for Investment

Operations

Your company must be registered as public or private limited company or corporation having shares
Preferably it should be in operation for at least two years; or
It can be a new venture which is a part of an old business in operation for over two years.
It needs to have a defined revenue patterns

Accounts

Preferably, your company should not have double books of accounts, and follow all accounting standard
There should be a set of books showing actual data of previous years.
On Due Diligence process actual data should be collected to help analyze investment returns
Should use computerized real time account and finance software to figure out real value

Investment Process

20 Step Mode

Project Concept Note- PPT or Video Presentation of Project/ Pitch Deck
Full Application Of Project on https://www.pe.rstca.com.np/project-application-form/
Non Disclosure Agreement with RSTCA along with Investment Consulting Agreement
Submission of Detailed Project Report (technical, financial, projections), Business Profile, Profile of Board of Director and Management, Registration Documents, License, Tax Clearance, CV of Promoters
Preliminary Review by Our Investment Committee and Management and Legal Due Diligence
Signing of the Letter of Interest between Companies
Signing of Due Diligence Agreement Between Big Four and Investee
Client Site Visit, Project Visit, Visit of all Key persons
Preliminary Evaluation
Due Diligence Review and Report by Big 4 Consulting
Investment Report and Proposed Business Plan by RSTCA
Evaluation by the Investment Committee of RSTCA
Term Sheet Definition and Investment Agreement
Exit Option Definition and Legal Agreement
Management Consulting Agreement with Big Four and RSTCA Management Consultant for profit increase
Entry into Board and Management of Company
Conversion of company into Corporate Structure and Automation of Company
Value Addition of Company and Multinational Expansion
Exit process and agreement for exit of company
Exit from Company / New agreement of entry

Our Investment Process

01

DEALS ARE SOURCED BY OUR GLOBAL REAL ESTATE AND PRIVATE EQUITY PROFESSIONALS AND THROUGH OUR NETWORK OF RELATIONSHIPS

02
OUR DEAL TEAMS COMPLETE THE TRANSACTIONS

03

RSTCA FUNDS THE PURCHASE THROUGH ITS OWN BALANCE SHEET AND RETAINS A PERCENTAGE OF EQUITY ON ITS BALANCE SHEET TO ALIGN OUR INCENTIVES WITH THOSE OF OUR INVESTORS

04
RSTCA CONTACTS SELECT CLIENTS FOR THE OPPORTUNITY TO PARTICIPATE IN THE INVESTMENT

05

RSTCA MANAGES THE INVESTMENT, INCLUDING ACTIVE MANAGEMENT OF OPERATIONS

06
INVESTMENT IS PLACED WITH INVESTORS FROM THE GCC REGION

When sourcing investments, we receive numerous investment referrals from our extensive network. These sources include proprietary relationships, direct approaches from partners/sellers, referrals from specialist intermediaries, dialogue with investment banks and follow-on transactions within the portfolio.

Our key investment criteria in assessing prospective investments include:

The investment’s compliance with our ethics and RSTCA principles
The alignment with our investors’ preferences and needs
The ability to generate the targeted returns over the investment holding period

The ability to achieve a desirable capital structure including obtaining sufficient financing from external financiers
The compatibility of the investment with our portfolio (i.e. diversified in terms of sector and geography, relevant to our expertise and track record)

Investment Process Flow

SOURCING

FINDING, EVALUATING AND CLOSING

Test industry structure, competitive position
Assure solid market competitive due diligence
Evaluate management team
Identify potential candidates for senior management needs as necessary

STUDY

EARLY OWNERSHIP 100-day plan

Define / review initial strategy and specific action plans
Conduct early workshop to assimilate company into RSTCA and gain consensus around goals and expectations
Use 100 days to refine / confirm plans Develop incentive compensation plans tied to desired results.

PRIMARY VALUE CREATION PERIOD Review key processes

Review performance against financial and operating metrics regularly with executive leadership
Identify staff and monitor key projects
Build capabilities within companies to improve key processes
Assess / strengthen company leadership teams
Agree to annual management objectives and compensation plans
Share best practices from across portfolio

EXIT

EXIT

Optimize earnings and overall financial performance
Assist in identifying exit options and strategies
Document and apply lessons learned from previous exits (e.g. IPOs, divestitures) in preparing for future exits

After the initial screening to determine which opportunities meet our investment criteria, the investment teams conduct in-depth due diligence on the most promising opportunities. During the due diligence stage,

the investment team conducts extensive research on multiple aspects of the potential investment; these include but are not limited to, market opportunity, partner background and capabilities,

and investment fundamentals. This process draws on expertise from our internal investment teams, senior management and a network of third-party experts and advisors.

Representative Due Diligence Criteria

In the early stages of the investment process, each new investment proposition is presented to the Market Sounding Group. The Market Sounding Group takes an active role during the investment sourcing process to facilitate convergence between our investment products and prevailing investor sentiment. During the review, the relevant investment team discusses the opportunity with our Investors Relationship Management team and other members of senior management,

thus allowing us to formulate a preliminary understanding on how a potential investment product would be perceived by our investor base. If the proposed investment gains the Market Sounding Group’s approval, the investment team continues to pursue the opportunity before presenting it to our Investment Committee and Executive Committee for approval. Concurrently with the Market Sounding Group’s approval, the investment is reviewed by our Shari’ah Supervisory Board,

which ensures the investment is compliant with our ethics and Shari’ah principles. Subsequent to Investment Committee and Executive Committee approval and depending on the size of the investment, transactions are approved by the Board of Director’s Executive Investment Committee. We submit binding bids on investment opportunities only after Investment Committee, Executive Committee and Executive Investment Committee approval.

Internal Investment Screening Framework

ORIGINATE

Investment teams originate investments via:

Investment banks / other advisors
Direct approach to partners / sellers
Referrals from finders
Personal contacts
Public information
Based on investment criteria

PROSPECT

Investment teams study prospective investments:

Study, discard or pursue the remaining investments that are not rejected
Conduct preliminary due diligence

READINESS TEST

Market Sounding Group:

For investments that match RSTCA’s strategy, the MSG will provide insight on investor appetite
If MSG approves, the investment team starts engaging advisors for due diligence

DILIGENCE

Due diligience:

Due diligence will always be conducted with the help of specialists:
– Financial Advisors
– Legal firms
– Consultants

Valuation based on approved market methodologies
Detailed report produced for management approval if diligence is successful

IC, EC, and EIC DECISION

Approval process:

IC and EC evaluate the merits and risks of the investment, as well as the overall fit within RSTCA portfolio
EIC, a sub-committee of the Board of Directors, discusses only those investments that the IC and EC approve

Once a transaction has been approved and completed, it passes into the portfolio, where its performance is closely monitored against the investment thesis. The portfolio management team function plays an important role in ensuring that investments achieve their full potential. A cross-functional team of portfolio management and investment professionals works with management of the company to plan business strategy and how to implement it. During the holding period, this portfolio management function

helps the portfolio companies with clarifying strategic and operational matters such as recruitment of senior management, developing the supply chain and infrastructure as well as introducing additional financial and reporting disciplines.

The portfolio management team monitors a range of monthly key performance indicators (KPIs) against the deal’s original investment thesis, and assesses the management’s performance. The team maintains close contact with company management teams through quarterly board meetings.

The firm aims to exit most investments within three to seven years. However, if an attractive opportunity for exit occurs, we will support an earlier exit. Similarly, we may extend the holding period to avoid exiting at an inopportune time or to otherwise enhance investor value. Exit may be by way of trade sale, initial public offering or recapitalization depending on which route offers the greatest return.