Investment Management Examples
Maximizing Portfolio Value
PROJECT:
Portfolio of equity investments in five domestic leveraged leases and one foreign based ownership FSC financing. Original asset costs totaled $405 million. Portfolio included:
- commercial aircraft
- inland barges
- various types of Class I rolling stock
- long-haul diesel electro-motive locomotives.
WORK SCOPE:
IMA LLC researched and prepared a comprehensive investment analysis and a strategic plan to maximize after-tax cash for the client. IMA LLC prepared regular reviews on Lessee creditworthiness, evaluations of future residual values, tax and book implications of prospective sales, and estimates of current “FMV” prices for each asset.
RESULTS:
All investments have been sold. Sales resulted in client booking significant gains on 4 assets; no impact (1); and one loss due to bankruptcy of a Lessee (U.S. airline).
CONCLUSION:
IMA LLC was responsible for day-to-day management of all assets. Currently, IMA LLC provides Investment Management and Advisory services to this client for other assets.
Managing an Active Portfolio
PROJECT:
Portfolio of equity investments in eight leveraged leases and a partnership investment. Original asset costs totaled over $1.3 billion. Portfolio originally included:
- commercial aircraft
- interests in 3 separate power generation facilities (fossil and nuclear)
- manufacturing and assembly plant assets
- “NNN” retail real estate
- a large, primary chemical refinery
WORK SCOPE:
Researched and prepared an investment summary (1996) for each interest in the client’s portfolio. Under contract, IMA LLC has prepared regular reviews on Lessee creditworthiness, exposure to future residual values, tax and book implications of prospective sales, and estimates of current “FMV” pricing for each investment. Client has also tasked IMA LLC with reviewing opportunities for option sales and 1031 LKE transactions.
RESULTS:
Seven investments have been sold. Sales of six investments resulted in the client booking gains on sale, which have ranged from 20% to 150% in excess of the client’s base rate of return (8.50% to 14.00%) Only one investment has been sold at ~$0 gain or loss.
CONCLUSION:
IMA, LLC provides regular Investment Management and Advisory services to the client.
Recovering Value from Troubled Assets
PROJECT:
$132 million portfolio of loans, factored receivables, and demand notes.
WORK SCOPE:
IMA LLC prepared an initial estimate of value for the entire portfolio. We identified troubled assets of $32 million, and provided recommendations for prudent reserves. Our recommendations were implemented. Client also retained IMA LLC to manage restructuring and collection efforts for troubled assets. Principal goals were to maximize near-term cash collection and to minimize client’s risk of further reserves or write-offs.
RESULTS:
IMA LLC managed the recovery efforts, and achieved a cash collection of $15+ million on the $32 million of troubled assets. IMA LLC’s work helped client to avoid additional reserves. Client retained IMA LLC to develop, implement, and support the client’s new portfolio management group. This group followed an organizational design suggested by IMA LLC.
CONCLUSION:
IMA worked on select collection matters and maintained an advisory role on portfolio management issues.