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Nawaz Shahzad - ArticlesHow to Deal with your Work Force in Financial CrisisIn the current economic downturn there is an undeniable pressure to decrease headcount, support costs and office expenses. At the same time companies must focus on attracting and retaining high caliber talent from the global marketplace. The Three D’s - Investment Strategies 2009Approximately 30 trillion US dollars in global wealth evaporated during 2008. GCC investors were not excluded from the fray. The prevailing sentiment of the past decade was that the region’s oil resources would keep the GCC economies on an unperturbed expansion. Ultimately what has happened, the plunging economies have led to an abrupt drop in demand. The subsequent commodity price fall was exacerbated by speculators (hedge funds) clamoring for the doors. Impact of the Global Credit CrisisThe GCC economies had been impervious to the global credit crisis for the better part of 12 months. While many people believed that the Middle East’s oil wealth would protect their economies from the crisis, these expectations have proved baseless. The falling equity values impaired sovereign wealth funds and lack of access to credit derailed numerous grandiose property development plans leaving some skylines littered with idle cranes Financial Recovery & Growing RiskThe year 2009 will test the patience of GCC investors as local economies are challenged to maintain the growth rates of recent years that were propelled by oil revenues. The UAE is likely to see a tightening while other countries, especially Saudi Arabia may follow suit. Private Equity Focus In 2009Private equity as a source of capital for evolving companies has seen tremendous growth in the MENA region during the last few years. MENA focused mergers and acquisitions activity has grown from less than $4 billion in transactions in 2002 to over $30 billion in 2007. Leveraged Buyout (LBO) to Make Large AcquisitionsA leveraged buyout (LBO) occurs when a financial sponsor gains a controlling interest in a firm’s equity and where a major % (percentage) of the buying value is financed through borrowing. The possessions of the obtained firm are often used as collateral for the borrowed money, sometimes with assets of the acquiring company. Private Equity InvestmentPrivate equity investment is money invested in companies that do not trade on the public stock markets. Private equity investments run the scope of corporate finance strategies from financing new companies to infusing capital in established companies. Channels that include private equity include: leveraged buyouts, venture capital, real estate & special situations. Survival In Financial RecessionBusiness standing firm during a recession is no easy thing. Cash is stiff, and for most businesses this is a nightmare which adversely affects productivity because of the on going global financial melt down, and the cycle continues. Now the first solution to surviving a recession is to understand that it will be over shortly. Capital Investment Protection In 2009The Year 2008 Can Easily be Highlighted as a Year of Extraordinary Volatility - Consequently the Fear of Loss Among Investors Has Increased Enormously. Hence in 2009, Strategies That Can Safe Guard Capital and Mitigate Risk Will be Favored as Investment Themes by a Majority of Investors, the Use of Active Asset Allocation Strategies Can’t Achieve This Objective Completely. in These Conditions, Diversification and Portfolio Insurance Techniques to Limit Losses Can Radically Lessen Risk. About Private EquityPrivate Equity is where the ownership of the company is in private hands – hence they do not trade publicly on a stock exchange and are not required to file public reports. As there is no direct market for trading, these investments are suitable for investors who can withstand illiquidity for as long as a decade.
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