Systematic Investment Planning

How to Do Financial Due Diligence Before Selecting Stocks? Stock picking isn’t just about looking at charts and following trends—it’s about understanding the financial health of a company. Before investing, a structured Financial Due Diligence (FDD) process can help you avoid bad bets and spot strong opportunities. Here’s a framework to follow: 1. Understand the Business Model & Industry - What does the company do? - Who are its competitors? - Is it in a growing or declining industry? 2. Analyze the Financial Statements - Income Statement (Profit & Loss) – Revenue growth, profitability (Gross, Operating, Net Margins), EPS trends - Balance Sheet – Debt levels, cash reserves, working capital position - Cash Flow Statement – Operating cash flow vs. net income, free cash flow trends 3. Check Key Financial Ratios - Profitability: ROE, ROA, Gross & Operating Margins - Liquidity: Current Ratio, Quick Ratio - Leverage: Debt-to-Equity, Interest Coverage - Valuation: P/E Ratio, P/B Ratio, EV/EBITDA 4. Assess Management & Governance - Background & track record of leadership - Insider buying/selling trends - Transparency in disclosures & corporate governance 5. Review Competitive Position & Moat - Does the company have a sustainable competitive advantage (brand, network effect, patents, cost advantage)? 6. Industry Trends & Macroeconomic Factors - Economic cycles, inflation, interest rates - Global supply chain, geopolitical risks - Market trends affecting revenue streams 7. Cross-Check with Analyst Reports & News - Read Equity Research Reports, Investor Presentations, Credit Reports - Stay updated on company news, regulatory changes 8. Look at Historical Performance & Future Guidance - Compare past financials vs. projections - Evaluate management’s growth expectations 9. Risk Assessment & Downside Protection - What’s the worst-case scenario? - How resilient is the business in a downturn? 10. Compare with Peers & Make an Informed Decision No company operates in isolation—compare financials and valuations with competitors before buying. Smart investing is about discipline, not hype. By doing thorough due diligence, you increase your chances of picking winners while avoiding pitfalls. What’s your go-to method for analyzing stocks? Let’s discuss.

How to Analyse a Company (Like a Real Financial Analyst) Most people look at the stock price. Analysts look beneath it. Because the secret to smart investing isn’t predicting it’s understanding. Here’s how professionals break down a company: [1]. Understand the Business Before the balance sheet, comes clarity. What does the company actually do? Where does its money come from? Is it cyclical, defensive, or growth-oriented? Does it have an edge: brand, patents, or market share? If you don’t understand how it makes money, you can’t value what it’s worth. [2]. Analyse the Financials Numbers tell a story, if you know how to read them. Income Statement: Revenue growth (YoY) → Is it expanding or stagnating? Gross & Net Margins → Are profits growing with sales? EPS trend → Consistency builds trust. Balance Sheet: Current Ratio = Liquidity Debt-to-Equity < 0.35 → Stability ROE > 15% → Efficiency Cash Flow Statement: OCF > Net Income → Real cash, not accounting profits. Interest Coverage > 2.5 → Comfort with debt. Free Cash Flow = OCF – CapEx Healthy cash flow means survival. Healthy margins mean growth. [3]. Evaluate Valuation Now the question — is it worth it? P/E → Are you overpaying for growth? PEG → Growth-adjusted pricing (lower is better) EV/EBITDA → Compare across peers DCF → Find intrinsic value Because price is what you pay. Value is what you get. [4]. Assess Management & Risk A company is only as strong as its leadership. Transparent governance → Trust Consistent strategy → Vision Red flags → Sudden accounting shifts, share dilution, or rising debt. Good management compounds value faster than numbers do. [5]. Decide with Logic, Not Emotion Ask yourself: Is it undervalued? Is it growth, value, or dividend play? What’s my exit plan? You don’t need to be smarter than everyone just more disciplined than most. In investing, clarity is your greatest edge. The deeper you understand the business, the lesser you’ll depend on luck. ----- Jeetain Kumar, FMVA® Founder, FCP Consulting Helping students break into finance and consulting PS: If you want to start your career in finance, check the link in the comments to book a 1:1 session with me #finance #cfa #investment #interviews #consultation

𝗜𝗻𝗱𝗶𝗮’𝘀 𝗲𝘃𝗼𝗹𝘃𝗶𝗻𝗴 𝗙𝗗𝗜 𝗿𝗲𝗴𝗶𝗺𝗲 𝗶𝘀 𝘀𝗵𝗮𝗽𝗶𝗻𝗴 𝘁𝗵𝗲 𝗳𝘂𝘁𝘂𝗿𝗲 𝗼𝗳 𝗮𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝘃𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 — 𝗵𝗲𝗿𝗲’𝘀 𝘄𝗵𝗮𝘁 𝗔𝗜𝗙 𝗺𝗮𝗻𝗮𝗴𝗲𝗿𝘀 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗸𝗻𝗼𝘄. Alternative Investment Funds (AIFs) continue to attract significant interest from foreign investors — and rightly so. However, with this capital inflow comes a heightened need for regulatory vigilance, especially when AIFs receiving foreign investment undertake downstream investments in Indian entities. To ensure transparency and control, the Reserve Bank of India (RBI), under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, has laid down a robust reporting framework. Two key filings in this compliance matrix are Form DI and Form InVi: 𝗙𝗼𝗿𝗺 𝗗𝗜 – 𝗗𝗼𝘄𝗻𝘀𝘁𝗿𝗲𝗮𝗺 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 When a foreign-owned and controlled AIF (FOCC AIF) makes a downstream investment (such as equity shares, CCPS, or CCDs) in an Indian entity, it constitutes indirect foreign investment. (a) Form DI must be filed on the FIRMS portal within 30 days from the date of allotment of such instruments by the Indian investing entity. (b) Compliance with India’s FDI policy — including sectoral caps, pricing guidelines, and prior approvals where applicable — becomes mandatory. 𝗙𝗼𝗿𝗺 𝗜𝗻𝗩𝗶 – 𝗜𝗻𝗱𝗶𝗿𝗲𝗰𝘁 𝗙𝗼𝗿𝗲𝗶𝗴𝗻 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝘃𝗶𝗮 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗩𝗲𝗵𝗶𝗰𝗹𝗲𝘀 Where a foreign investor invests in an Indian AIF, and the AIF subsequently invests in an Indian entity, Form InVi comes into play. (a) The AIF must report this indirect foreign investment within 30 days of issuing units or allocating investments to the foreign investor. 𝗔𝗱𝗱𝗶𝘁𝗶𝗼𝗻𝗮𝗹 𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁𝘀 AIFs with foreign investment must also navigate: (a) KYC norms & beneficial ownership disclosures under PMLA (b) Custodian oversight when a single investor (or group) contributes ≥ 50% of corpus (c) SEBI & RBI scrutiny on sectoral limits, pricing, and entry routes Delays or lapses in Form DI or InVi filings may trigger penal consequences under FEMA, additional regulatory scrutiny, and potential disqualification from AIF regime benefits, potentially impairing future capital raises. As India sharpens its focus on foreign capital, transparency and compliance are the cornerstones of trust. For FOCC AIFs, timely and accurate reporting under Form DI and Form InVi is not just a regulatory requirement, but it’s central to safeguarding credibility in India’s alternative investment ecosystem. Neha Londhe I ANB Legal #AlternativeInvestments #ForeignInvestment #RegulatoryCompliance

Alternative investment funds are increasingly turning to credit markets through net asset value facilities, capital call facilities, and hybrid forms of these (known as dual-pledge facilities) to diversify and optimize their funding. Innovation is also emerging in the rapidly growing credit investment strategies market. At inception, funds use short-term subscription lines to fund their investments prior to capital calls from limited partners—secured against the uncalled capital from these same partners, with the lines' capacity diminishing as capital is called and extinguishing as the fund becomes fully deployed. Credit is credit—whether public or private, rated or unrated. In this edition of Private Markets Monthly, Matthew Albrecht, CFA, Russell Bryce, Nik Khakee, and William Edwards explore S&P Global Ratings' recently released criteria for rating subscription lines and how we're adapting our ratings as fund finance evolves. Read and subscribe for essential intelligence from and insightful interviews with subject matter experts on what matters most across #privatemarkets.

Last week, it was BlackRock going for blackjack. This week, are brokerages going all in? This week’s newsletter dives into the how and the why behind Charles Schwab's rollout of its alternative investments platform to eligible retail investors is another big development for private markets and the wealth channel. Schwab's rollout of its Alternative Investments Platform to "serve [the] evolving needs and preferences" of its wealth clients (initially those with $5M+ of household assets at Schwab) as Schwab's Head of Wealth & Advice Solutions Neesha Hathi said this week highlights the importance of private markets in the wealth channel. Schwab asked clients what they want. And they listened. In a survey of its clients, the firm found that over half of their clients expect to have at least 5% of their portfolio allocated to private markets over the next three years. Given Schwab's size and scale in the individual investor channel (and the advisor-led channel as well), there's a lot to play for. Schwab's Head of Investor Services & Marketing Jonathan Craig noted this week that the firm “serves more than a million multimillionaire investors, representing over $3T in assets at Schwab." If a portion of the $3T in assets on Schwab rolls into private markets offerings, which will be powered by iCapital's technology, that's hundreds of billions of dollars at stake. The race for retail is on. And Schwab's moves to serve its individual clients is emblematic of a new phase in private markets. Who is next? Schwab's competitor, Fidelity Investments, will likely make a push into private markets. Other digitally-enabled investment platforms, like Republic, have met investor demands here as well, recently partnering with Hamilton Lane on a fund with $500 minimums. Moonfare, Yieldstreet, Arta Finance, SoFi offer private markets directly to consumers. Could brokerage firms like Robinhood, Revolut, Public be next? Read on for more👇. This week's Alt Goes Mainstream's AGM Alts Weekly, brought to you by DealsPlus, covers: 🗂️ AGM Index, an index that tracks the leading publicly traded alternative asset managers. 💻 Post of the Week by KKR's Markus Egloff on KKR's new insights paper about private equity, by Alisa Wood, Matthew Yates, Bradlee Few. 🗞️ AGM News of the Week, this week covering: 📌 Financial Times' Eric Platt, Harriet Agnew, Alexandra Heal, Robert Smith on CVC's overtures to acquire $75B AUM alternative asset manager Golub Capital, following CVC's discussions with Fortress Investment Group. 💻 Who is hiring: Senior-level positions from companies Blackstone, Apollo Global Management, Inc., KKR, Ares Management Corporation, Blue Owl Capital, Brookfield, iCapital, Ultimus Fund Solutions, Goldman Sachs, Hamilton Lane, Dynasty Financial Partners, Hightower Advisors. Subscribe👇 to see the latest trends & navigate this rapidly changing landscape as alts go mainstream. https://lnkd.in/eHtHUiWK

Met with a VC General Partner recently who was struggling to close their next fund (Fund III). They were frustrated that LPs (investors) were ghosting them. But here’s the catch: their DPI (cash returns) on Fund I and II was near zero. So, I asked: 🔹 If you had already returned 1x capital to your LPs, would you be struggling to raise this fund? 🔹 The answer: no. We broke it down together: How many of your portfolio companies are actually planning an IPO in the next 12 months? (Likely none). • If, in six months, you utilise a secondary sale or a continuation fund to return actual cash to your investors, you’ll be in a much stronger position to ask for more capital. • You’ll have proof of liquidity, not just "paper marks." Then I asked: 🔹 What have you done to actively manage your exits via the secondary market to justify a re-up? 🔹 The answer: nothing. Here’s the reality: 💡 The era of raising solely on TVPI (paper value) is over. If you want to command capital in this liquidity-constrained environment, you need to show you know how to exit, not just how to invest. 💡 Demonstrate your ability to return cash. Don’t just expect LPs to re-invest because your logo is on a hot cap table. Sometimes, the right move is to pause the roadshow, structure a secondary transaction for your best assets, and focus on getting your LPs paid first. We work with the industry's best funds and help structure liquidity solutions when they are needed. But it’s about generating DPI, demonstrating discipline, and respecting LPs' need for cash, not just gathering AUM. For some GPs, launching the next vintage isn’t the answer yet. Sometimes, managing the existing portfolio and proving you can exit is the best next step.

Having exited my first startup for $30m+, there is one thing I wish more founders knew about exiting You do not decide your exit when the offer arrives. You decide it years earlier in the boring moments. Most founders think the exit story starts with a banker deck or an inbound email from a big logo. In reality it starts when you're still fighting for product market fit and barely sleeping: • Every exit is built on a clean story. If your metrics, cap table and contracts are messy, you have already discounted your price. • Buyers do not buy potential. They buy proof. Predictable revenue, clear cohorts, low churn, real focus. Not vibes. • Strategic exits start as partnerships. If you want BigCo to acquire you one day, start by helping one of their teams hit a target this quarter. • Your board/advisors can get you the exit you trained them for. If you only ever talk vanity metrics, do not be shocked when they optimise for the wrong outcome. • You need a second brain ready long before you need a second bidder. Data room, FAQs, key risks. The speed you answer questions changes how serious you look. • Optionality is an asset. Multiple potential acquirers, a credible stay independent plan, calm energy. Desperation is expensive. • The culture you build shows up in due diligence. High churn, chaotic comms, no documentation. Buyers read that as risk, even if your top line looks great. An exit is rarely a miracle moment. It is usually just the day the market finally notices how disciplined you have been for years.

One Instrument, Many Hats: Different Laws, Different Perspectives on Financial Instruments In corporate finance, a single financial instrument can take on different identities depending on the legal or regulatory lens through which it is analyzed. One such example is the treatment of Compulsorily Convertible Debentures (CCD), which, despite being a straightforward debt-to-equity instrument, is subject to different interpretations across various laws. 1. Companies Act: CCDs are treated as debt until conversion, after which they are reclassified as equity. Courts have clarified that CCD holders, until the point of conversion, maintain the rights of debenture holders, giving them creditor status. 2. Income Tax Act: CCDs are treated as debt until conversion, with companies claiming interest as a tax-deductible expense. However, disputes have arisen around the valuation of CCDs and the treatment of interest expenses, particularly in cross-border transactions and various judicial precedents have held that the instrument cannot be recharacterized retrospectively as an equity instrument. 3. FEMA: For foreign investment purposes, CCDs are classified as equity from the date of issuance. Courts and regulators have emphasized that mandatory convertible instruments like CCDs should be treated as equity for the purposes of FDI caps and sectoral restrictions, even before conversion, and therefore, an assured return on the same cannot be permitted under FEMA. 4. SEBI Takeover Code: CCDs are seen as as non-equity until they are converted into shares. This means that open offer obligations are deferred until conversion, allowing companies to structure deals without triggering takeover requirements prematurely. 5. IndAS 109: CCDs are generally reckoned as equity because of their mandatory conversion feature. However, if a CCD includes an interest component, it can be classified as a hybrid instrument. 6. IBC: CCDs are typically treated as debt if there is a repayment obligation in the event of liquidation. However, if no such liability exists, CCDs may be classified as equity. This distinction is crucial in insolvency proceedings, where creditors and debenture holders vie for recovery, and courts have provided guidance on how CCD holders should be treated in such cases. 7. Competition Law: CCDs can lead to the upfront acquisition of voting rights upon conversion, which triggers competition law requirements. Regulatory authorities have emphasized the need for early notifications in large acquisitions where CCDs are involved, to prevent anti-competitive practices. The multifaceted treatment of any financial instrument across these legal frameworks highlights the need for a nuanced approach when structuring financial instruments, since it could result in significant implications for the investor or the investor. Katalyst Advisors #MergersAndAcquisitions #IncomeTax #FEMA #IBC #SEBI #IndAS #CompaniesAct #CompetitionLaw #FinancialInstruments #CorporateLaw

Why Alternatives, and Why Now? Markets shift, cycles turn, and investors ask the same question: How will alternatives hold up when the tide changes? We’ve run the numbers, mapped out the scenarios, and here’s the takeaway: Alternatives remain relevant across bull, bear, and base cases—but how you allocate matters. 🔴 Bear Case: Market Disruption Recession, geopolitical risk, and tighter liquidity? Equity markets struggle, defaults rise, and risk tolerance fades. • Private Equity: Distressed buyouts gain traction as secondary markets pick up bargains. • Macro Hedge Funds: A bright spot—volatility creates opportunities in FX and rates. • Private Credit: Defaults climb, but high-quality credit holds steady. • Infrastructure: Defensive assets like utilities and essential services remain resilient. ⚪ Base Case: Stabilization & Modest Growth Rates stabilize, inflation stays in check, and markets tread water. • Private Equity: Mid-market buyouts and secondaries thrive, while defensive sectors like healthcare attract capital. • Macro Hedge Funds: Systematic strategies benefit from macro trends. • Private Credit: Direct lending remains a steady performer. • Infrastructure: ESG and sustainability-linked projects attract capital. 🔵 Bull Case: Accelerated Growth Global expansion, rate cuts, and rising optimism fuel risk-taking. • Private Equity: Tech, AI, and healthcare see surging valuations. • Macro Hedge Funds: Trend-following strategies ride the market wave. • Private Credit: Yield-seeking investors move into structured financing. • Infrastructure: Capital floods into renewable energy and transport projects. My Take? The case for alternatives isn’t binary—it’s about resilience, flexibility, and knowing where to lean in. When equity beta wobbles, alternatives offer a playbook for every market regime. As Howard Marks put it: “You can’t predict. You can prepare.” Are you positioned for what’s next? #Investing #Alternatives #Markets #PrivateEquity #MacroHedgeFunds #PrivateCredit #Infrastructure

Some people set concrete investing targets—like a make-or-break dollar amount they must reach before considering retirement. These are folks who dream of that house by the beach or traveling around the world. This approach can be a powerful incentive to do the hard work of saving for years, but sometimes it can lead to disappointment. That could be because people don’t reach their stated goal or because their lives change so much that when they find themselves able to do the thing they’ve been planning for, they no longer want to. That’s why if someone tells me they want to save money to buy a beach house for when they retire, I suggest they might actually want to think about saving enough money to have the ability to get that beach house. That’s what I call a “fuzzy goal.” Fuzzy goals represent the best goals you can come up with at any given time. Built into this idea is the recognition that those goals will probably evolve. The reality is that almost no one I know had one goal at the beginning of life and never changed it. Goals change throughout our lives, and we go through many transitions. We probably all know someone who has gone through a dozen major ones over the course of a lifetime. People crave predictability, but if life were totally predictable, where would opportunity come from? Without uncertainty and the prospect of change, we’d all be locked into whatever seemed like the best choice early on, with no room for growth or discovery. A fuzzy goal recognizes that your fundamental values may stay consistent, but still allows for the expression of those values to shift over decades. For example, you might always value security, but what security looks like at 25 versus 45 versus 65 may be different. The couple planning to retire at 65 might face health challenges that change everything at 55. That’s how life works. When you save for the ability to be able to do something, rather than for a specific outcome, you’re less likely to feel like you failed if your priorities change. The same principle applies broadly: Save enough so you have the ability to stop working, live in Europe, support your children’s education, or weather unexpected health challenges. The ability to choose becomes the real goal. This thinking may change how you approach investing. Instead of optimizing portfolios for hitting specific numbers by specific dates, focus instead on building robust financial strength that can adapt as you evolve. Fuzzy goals acknowledge something we all know but often forget: We can’t predict our future selves. The goals that seem clear today might look completely different in a decade. But the financial capacity to pursue those evolving goals? That’s what sensible planning prepares you for. So while we can’t eliminate uncertainty, we can build enough financial strength to navigate uncertainty. That’s how you create a plan you can live with, whatever life brings.