Unsuccessful business connotes to a wasted effort. Unequivocally, worthy investments are requisite to the future financial security coupled with myriad accomplishments. Establishing an investment or rather an asset management business is primarily vital. Also, raising funds for business, thereby, investing in a competitive market explicitly illustrates the direction of a particular entity. Distinctively, a group of individuals based in London intends to invest into vintage cars and art pictures. The highlighted business necessitates myriad clarifications with regards to the investment. Essentially, the suggested business is majorly embattled with limited funds. The paper endeavors to establish whether to raise funds from a developed country or an underdeveloped market, coupled with recognizing the advantages in each market. Additionally, the paper intends to expound on where to find the investors and relevant ways of attracting investors.
Categorically, funding is essential for the success of the investment on vintage cars and art pictures. Typically, financial instruments such as bonds and shares are fundamental in raising funds. Also, the mentioned investment can primarily acquire funds through the closed-end mutual funds, often an example of the mutual funds. The cited mutual funds often refer to bonds, as well as, allotting of shares to the public (Bolge, 2010). The mentioned shares get issued only once to the public after creation from an initial public offering. Then, the shares get listed on a stock exchange for trading. Specifically, it would, therefore, be sound to acquire funds from a developed country. A developed country with regards to stability is undoubtedly reliable for raising funds through trading. Also, developed country poses coupon rates that are economically feasible (Jervis, 2011). Conversely, underdeveloped markets bare high financial risk and uncertainty that could adversely impact on the business in the event of a crisis. As per the highlighted reasons, acquiring funds from a developed nation would be a bonus.
Both a developed country and underdeveloped market bear myriad advantages. In the developed country, there exists a wide established market for the investment. The specified markets would practically mean that the business possess homogeneous competitive means of operation. Additionally, in developed country, there exist trusted investors. The mentioned investors would gladly purchase shares, thereby, allotting the much-needed capital investment into vintage cars and art pictures. In developed country, attracting and convincing investors is an advantage. A step by step engagement with investors is often specified under certain favorable terms and conditions, thus, assuring an investor of proper returns coupled with low uncertainty (Maheshwari, 2008). Emphatically, in underdeveloped markets, there exists few or no companies involved the investment into vintage cars and art pictures. Therefore, the cited investment would enjoy a monopoly, thus, extending its success. Also, in underdeveloped markets, shares and bonds would be sold cheaply with a minimal coupon. The holders of the bonds would propose affordable and friendly interest rates towards the company. The cited interest rates would mean that the company on its traded shares would still possess an efficient amount of fund. Additionally, due to the monopolistic nature of the market, the mentioned company would gladly dictate the amount each share and determine the coupons accompanying them. The highlighted would spearhead the success of the vintage cars and art pictures Company.
Seemingly, investors are from the general public. The myriad populace in United Kingdom would be advised to purchase shares. The said shares would then be issued to each member whose application is successful. Additionally, large corporations available in the United Kingdom would explicitly purchase the shares. Through investments and trading of the mentioned shares, adequate capital would be acquired (Mobius, 2007). Through the application of Closed-end mutual fund, shares from investors would be bought back at a premium but only once. The net asset value calculated at a premium, with regards to the shares traded. The mentioned would help in faster collection of capital. Reason being, shares would be sold or rather issued to investors who would then issue them to other investors, thereby, increasing the market size. Apparently, increased market size would mean more funds available.
In order to attract investors, several considerations ought to occur. Initially, through the use of closed-end fund, investors would be attracted. Notably, closed-end mutual funds sell shares once to the public. The shares then get listed in the stock exchange for trading where the investors often participate fully. The mentioned act significantly builds public trust and confidence, thereby, prompting more subscriptions from the investors. Similarly, the availability of assets for investment that gets efficiently used as security attracts investors. The individuals intend to invest into vintage cars and art pictures, a company with huge asset value. The cited asset value greatly attracts investors, since; the shares from the mentioned investors often get priced at a premium of an asset value (Hagin, 2004). A huge asset value would mean more coupons to the investors that are undoubtedly attractive. Additionally, due to the several years of experience together with a well-established structure, investors would be attracted. The eminent stability and confidence would convince the investors thus attracting them. The stated structure involves the presence of professional investment individuals, who would categorically monitor the appropriate buying and selling of financial securities. Typically, investors who do not intend to extend their investment on the close-fund would sell their shares to another investor present in the market. Categorically, the price they would get would be significantly different from the asset value. For instance, with regards to the net asset value, the price would be at premium, thereby, allowing investors to earn more (Haslem, 2010). The mentioned would greatly attract investors.
Therefore, in order to be successful in the vintage cars and art pictures investment, the individuals ought to critically consider investing in a developed nation. Also, through the stock exchange trading, the public investors would significantly add to the success of the investment. Thus, the highlighted various means of attracting public investors by the closed-end fund would perform magic to the individuals.
References
Bolge, J. C. (2010). Common Sense on Mutual Funds. New Jersey: John Wiley & Sons, Inc.
Hagin, R. L. (2004). Investment Management: Portfolio Diversification, Risk, and Timing- Fact and Fiction. New Jersey: John Wiley & Sons, Inc.
Haslem, J. A. (2010). Mutual Funds: Portfolio, Structures, Analysis, Management and Stewardship. New Jersey: John Wiley & Sons, Inc.
Jervis, A. R. (2011). 365 Ways to Raise Funds for your Nonprofit: Practical Ideas for Every Not-For- Profit Organization. Florida: Universal-Publishers.
Maheshwari, Y. (2008). Investment Management. New Delhi: PHI Learning Pvt. Ltd.
Mobius, M. (2007). Mutual Funds: An Introduction to Core Concepts. Singapore: John Wiley & Sons, Inc.
