Once a project has been screened and if it passes the preliminary review, it will be displayed in our portfolio of potential projects to be undertaken. We usually wait 6 months to 1 year to see how many candidates we get. At the same time the fundraising team is topping-up the fund. The Chief Investment Officer will call a meeting of the Investment Committee where it will be decided which project is getting the green light. Projects that don’t get the green light at first are still being considered in the future.
Once approved, the legal team will start drafting all the subsequent paperwork depending on the service requested.
While our investors make money by collecting dividends, ALVERADA makes money for itself by imposing:
- Administrative fees
- Profit fees (carried interest)
The exact percentages will be decided by the management, for each project individually, and are subject to change.
The bulk of the carried interest is supposed to be used to top-up the internal source.
There are two options for generating cash for investors:
1. by growing companies and keeping them in our portfolio, which will results in a constant income
2. by growing companies and selling them or taking them public, in these cases the money obtained from the transaction or the IPO will be shareholders’ pay. Or instead of selling a company we can sell its assets/projects.
The Board, headed by a Chairperson, is responsible for:
- taking strategic decisions, such as restructuring and development of the business model
- bringing new ideas and potential investors
- overseeing the management’s work
- approving internal budgets
- deciding the percentages of capital that goes into equity and credit
- taking the final investment decision and validating the Investment Committee’s choices
Very importantly, it is not the Board that decides which projects are implemented. The Investment Committee is responsible for the sourcing of deals, and they submit the proposed amount of capital to be authorized for investment, in the case of the direct investment scheme. Board approval is not needed for projects financed from the main open-ended fund. The Investment Committee has full control over the internal source.
The Board is formed of representatives of the investors and decides by vote.
The Investment Committee is headed by a Chief Investment Officer (CIO) who appoints his/her own committee members (people with technical experience in oil&gas, complemented by finance specialists). The decision is discretionary for the CIO, but the team has the role of elaborating a reasoning for the approval of a project.
The Investment Committee can be dissolved only in case of gross fund losses. A new CIO will then have to be appointed by vote of the Board.
