Are You Killing Enough Ideas?

Right at this moment, in a conference room or at an executive off-site meeting, a group of senior leaders of a large global company are wondering why they aren’t innovating enough. They’re probably focusing on a few specific questions: “Why don’t we have enough good ideas? How can we tell which idea is going to be the next big thing? Why is it so hard to get an idea from the drawing board into the market?” Most telling of all is the question: “Why do we still waste resources on ideas that people don’t believe in?” In other words, even though an idea has been effectively “killed,” it still remains on the agenda, with nobody fully willing to learn from the mistake, put it to rest, and move on to other endeavors. (Continuar leyendo) Strategy+Business. Booz & Co. 2009. Seguir leyendo

CalPERS Looking to Change Relationship with Fund Managers

By Marc Raybin
September 15, 2009

With more than $20 billion invested in private equity, the California Public Employees' Retirement System (CalPERS) holds quite a bit of clout in the asset class. When the fund speaks, investors should listen. The nation's largest public pension fund said on Tuesday it supports the proposals put forth last week by the Institutional Limited Partners Association (ILPA) in an effort to improve the relationship between limited partners and general partners in private equity investing.

The ILPA published their ideas about how to alter the alignment, governance, and transparency of the relationship between institutional investors, such as CalPERS, and general partners managing the private equity funds. Specifically, the principles are as follows, according to CalPERS:

Alignment of interests: Management fees should cover reasonable operating expenses of the firm and not be excessive; the general partners' capital commitment to the fund should be substantial, with a higher percentage in cash; and there should be stronger provisions to help avoid profit distribution imbalances between the GPs and LPs.

Governance: Limited partners, collectively, should have stronger rights to suspend, terminate or dissolve a fund; the fund auditor should be independent; and meetings of limited partner advisory committees should be standardized and adhere to best practices.

Transparency: General partners should provide greater detail to investors about fees generated, carried interest profits received and underlying portfolio company performance.

"We feel the time is right for some changes to the institutional foundation for best practices," said Clark McKinley, a spokesman for CalPERS, which has been investing in private equity for nearly 20 years. "There have been some changes, [but] we feel it is time to do a recalibration."

McKinley pointed out these proposals are still in the formative stages and once they are adopted by ILPA, will be used on a voluntary basis by CalPERS. "We are not going to use them as a hammer," McKinley said.

ILPA published its proposed changes for the private equity space on Sept. 8, and according to McKinley, is still taking comments on their ideas from investors.

CalPERS has $20.6 billion in capital invested in private equity, with nearly $22 billion waiting to be deployed. As of Sept. 10, CalPERS said the value of its fund was at $198.5 billion. The fund provides retirement benefits to more than 1.6 million state, school and local public employees, retirees and their families in California.

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Facturas por cobrar podrán liquidarse en apenas 24 horas

Las pequeñas y medianas empresas (pymes) proveedoras de corporaciones, encuentran en el mercado cada vez más alternativas para obtener el tan preciado capital. En tal sentido, dentro de poco podrán hacer líquidas sus facturas en apenas 24 horas, ello gracias a la creación de un nuevo sistema denominado Ivale, que enlazará a compradores, proveedores,  el mercado de capitales y la negociación de las facturas. Ivale es una plataforma electrónica diseñada por Value Investment SAFI, en coordinación con Cavali, en la que se procesarán las facturas comerciales que emiten las pymes a sus proveedores, permitiendo que sean cobradas "en línea". Por otro lado, cabe mencionar, que Value Investments está próximo a lanzar un cuarto fondo de inversión de capital de riesgo, que se llamará Alpha.

Fuente: Diario Gestión

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Latin Leaders Cling to Early Hatred of U.S.: Alexandre Marinis

Commentary by Alexandre Marinis

Aug. 12 (Bloomberg) -- The world should look forward to the next generation of Latin American leaders. They will be less hostile toward the West and less likely to destabilize their neighbors.

The region's current rulers formed their political views back in the 1960s and 1970s, when the U.S. was supporting military coups to prevent communism from spreading beyond Cuba.

The ill will generated by U.S. policy reverberates today among political leaders in Central and South America even though the Cold War ended 20 years ago and the U.S. is focused on the Middle East and Asia, letting the region more or less take care of itself.

Latin America's future leaders grew up watching the Berlin Wall collapse on TV and celebrating the North American Free Trade Agreement. They know a different U.S., one that no longer has to meddle in their region's internal affairs to make sure capitalism prevails over communism.

In his 1986 book, "The Cycles of American History," Arthur M. Schlesinger Jr. -- a former aide to President John F. Kennedy who opposed the Bay of Pigs invasion of Cuba -- said U.S. history moves in 30-year cycles between private interest and public purpose, free market and activist government, capitalism and democracy, Republicans and Democrats.

Today, as the global financial crisis swings the pendulum of history away from overly unregulated markets and into the arms of bigger government and Keynesian capitalism, Schlesinger's notion is worth revisiting from an international perspective.

Forming an Identity

One of his noteworthy insights is that generations are delineated by key historical events that take place while young adults acquire their political consciousness, or identity. These events, which shape hearts and minds, provide a common world view that people will share for life.

For leaders in Latin America, those key events included fighting oppressive military regimes propped up by an imperialist Uncle Sam. Clinging to the past, they stick to the only demand they can agree upon -- the end of Washington's embargo on Cuba -- while critical matters remain unattended.

They should worry, for instance, about the negative political and economic consequences of the neo-populist sentiment Venezuelan President Hugo Chavez is cultivating throughout Central and South America.

Even respected moderates such as Brazil's Luiz Inacio Lula da Silva and Chile's Michelle Bachelet fail to criticize Chavez for stoking the flames of tension and discord in the region.

Chavez's Influence

Relying on petrodollars and a strong military, Chavez's self-proclaimed socialist revolution has influenced the recent coup in Honduras as well as the remilitarization of the region, including last year's near-war between Colombia and Ecuador. And thanks to Chavez, the hemisphere will suffer from the economic decline that usually follows the nationalization of seized private businesses, the overextension of presidential terms to limits enjoyed only by dictators, and the curtailing of press freedoms.

Chavez's leadership grows stronger due to the political vacuum left by Brazil, the region's biggest country. For all his passionate speechmaking, Brazil's Lula has not uttered one word about the growing evidence that Chavez supplied weapons to FARC, the Revolutionary Armed Forces of Colombia, a terrorist group involved with drug lords.

Double Standard

Nor has Lula responded to the growing evidence that Chavez illegally financed political campaigns in Argentina, Ecuador and elsewhere. In 2002, documents from ABIN, Brazil's national intelligence agency, suggested that Lula's Workers' Party might have received $5 million from FARC. The allegations were never proved.

Last week, Lula said he was concerned about Colombia's plan to give the U.S. access to seven military bases for operations against illegal drug traffickers and FARC guerrillas. Lula seems to agree with Chavez, who sees the Colombia-U.S. agreement as an "aggression" that should be countered with the purchase of "several battalions" of Russian-made tanks.

Yet Lula didn't oppose a joint naval exercise held by Venezuela and Russia last year that involved 16 warships and 1,600 Russian sailors in the Caribbean. During the exercise, a destroyer became the first Russian warship to cross through the Panama Canal since World War II.

So Lula and other Latin American leaders appear to have a double standard when it comes to military action.

'Automatic Anti-Americanism'

And that's nothing compared to Nicaragua's Daniel Ortega, who charged that U.S. intelligence agencies, acting without the approval of President Barack Obama, planned the coup that ousted President Manuel Zelaya from Honduras in late June. Ortega, of course, didn't just observe U.S. intervention as a young man in Latin America. He led the Sandinista government in battle against U.S-funded contra rebels in the 1980s.

"The continent must leave the automatic anti-Americanism behind, in my view a sign of immaturity," Colombian Defense Vice-Minister Sergio Jaramillo told O Estado de São Paulo, a Brazilian newspaper.

Jaramillo, at 42, sounds more reasonable than the most experienced Latin leaders. His worldview was formed while studying in Canada, England, France and Germany in the late 1980s and early 1990s, when the Cold War was already ending.

Schlesinger's theories deserve to be revisited. They explain what's happening in the world today and how Latin America will change for the better when future generations take charge.

(Alexandre Marinis, political economist and founding partner of Mosaico Economia Politica, is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Alexandre Marinis in Sao Paulo at amarinis1@bloomberg.net

Last Updated: August 11, 2009 21:01 EDT

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You should listen more than you sell

A sales conversation or call shouldn't start with your pitch. You should never offer your products or services without first getting a clear understanding of the potential client's needs and desired outcome.

Sales professional will always listen twice, maybe even three times more than they speak. As a small business owner, you need to be sales professional. You are the face of your business. You are not only selling your product or service, you are selling yourself. There are some basic sales skills that you should not only practice; but also perfect. Getting a handle on these skills and making them a habit will help your product or service sell themselves.

First, listen, listen and listen some more. Before you offer any professional opinion or advice, really listen to your potential client's concerns, needs and desired results. Let them speak without interrupting and have them elaborate when you are unclear or don't understand. This requires dialogue not a monologue. Engage your customer in problem solving dialogue by asking intelligent and open-ended questions to draw out the real issues. Never guess what their needs are, let them tell you. There will be plenty of opportunity for you to discuss things from your perspective.

Acknowledge that you have not only heard their concerns but clearly understand them. Be sure you speak to them in a clear straightforward manner without jargon or rhetoric. Reflect back on what you have heard by summarizing your client's points. Follow-up with questions of your own to clarify your understanding; seeking first to understand and then to be understood.

Ask what their desired outcome looks like. Don't be afraid to encourage and endorse your client's good ideas; but offer them a new perspective. Explain what it will be like working with you and using your product or services. Give them examples of how you have assisted other clients and achieved their desired outcomes. Let them know what they can expect and what will happen. Do you offer a guarantee? Be specific. What are the terms of service? Be clear about your business process. And now is not the time to shy about your expertise and capacity.

It's time to close the deal. Ask for the sale. Be confident in your product or service and your ability to meet your client's needs. Be assertive and give them solid reasons why they should work with you and INVITE them to take action now and get started. Do not say, "what do you think?" Encourage them to take advantage of this opportunity to buy from you or work with you.

Prepare yourself for your next sales conversation. Refrain from verbally assaulting your clients and spend more time listening. Have some open-ended questions already prepared. Know what aspects of your business you are going to highlight that will benefit the client. Speak with assurance. No one likes to be "sold to." Everyone wants to be heard and listened to. This is especially true in sales.

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Perú Factoring. Carta al director, diario Gestión

Carta al director publicada en el diario Gestión (18.8.09)

Perú Factoring
En la nota 'El programa de factoring lanzado por el gobierno en mayo no opera', publicada hace unos días, se hace referencia a modificaciones que COFIDE, el MEF, Produce y la SBS están trabajando para el funcionamiento de Perú Factoring.

En ella la ministra de Producción Mercedes Araoz afirma necesitar introducir cambios en el actual marco legislativo para que el servicio de factoring impulsado por su portafolio funcione. La ministra, y es lógico pensar que sus asesores, esperan que las facturas adquieran mérito ejecutivo para facilitar su cobranza, al igual que una letra de cambio. Sin embargo, parecen perder de vista que el marco legal existente no es obstáculo, ya que no es necesario que las facturas adquieran carácter de documentos ejecutivos para ser descontables por quienes las emiten.

Así como el Ministerio de Producción, nuestra empresa Value Investments Perú también se encuentra trabajando en un servicio electrónico de descuento y negociación de facturas. En nuestro caso se trata de facturas conformadas (título valor que cuenta con la conformidad y fecha de pago cierta por parte del cliente obligado al pago de la factura) y su implementación contempla el marco legal de la actual Ley de Títulos y Valores. Quizá el portafolio de la ministra Aráoz podría no requerir modificar la ley actual para sacar adelante el programa de factoring que impulsa. El mérito ejecutivo de las facturas es un aspecto legal que no se ha cerrado desde hace más de una década y es muy posibe que tampoco se logre, puesto que una factura no tiene medios para certificar que será pagada.

Héctor Gaudry
hector.gaudry@ivale.com.pe Seguir leyendo

Private equity suffers worst year on record-study

LONDON, July 31 (Reuters) - Private equity returns saw their steepest declines on record in 2008, down by over a quarter as the value of firms' investment portfolios tumbled in the wake of the credit crisis, according to a study published on Thursday.

Private equity firms took the knife to company valuations last year as falling stock markets and poor earnings outlooks forced them to pare back the value of their investments.

Private equity returns fell 27.6 percent in 2008, exceeding the decline of 9.1 percent seen in 2002 at the height of the dotcom bubble, consultancy Preqin said.

But there are signs of value returning to the sector, Preqin said.

"December 31, 2008 represented a low point for the private equity industry, but early data from March 2009 already confirms that the industry is already recovering," Etienne Paresys, head of performance and general partner data, said in a statement.

Leading European buyout house BC Partners [BCPRT.UL] recently wrote up its current fund by 22.4 percent for the first half of 2009, returning it to par value, a source familiar with the situation said. [ID:nLR165894]

Private equity firms are sitting on over $1 trillion of "dry powder" -- capital committed but as yet unspent -- waiting to be invested when conditions improve, said Preqin. (reporting by William James and Simon Meads; editing by David Cowell)

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