Sir we are offering you an exclusive all expenses paid trip for 2 to Goa. We will pick you up from your house, and drop you back. You fly in a small private aircraft, landing at Goa on a Saturday evening, 4pm. Yes, you can get your kids along. Of Course, Sir, you can get your pet and the pet will be taken care of in the flight and in the 5 star hotel that you stay.
Wow, that’s interesting goes your mind.
Well, it is a fee only adviser offering you an investment opportunity in an EXCLUSIVE PRIVATE EQUITY FUND.
Well, it is a Rs. 10 crore minimum investment – payable in 2 instalments of 5 crores. First one immediately, and the second one in about 12 months time.
You will be given a 3 hour presentation on the portfolio, and it is EXCLUSIVE. No IFA or RIA you know does this sir, and we are only about 5 of us who have this mandate for OUR EXCLUSIVE CLIENTS. We are expecting to raise about Rs. 1000 crores from about 75 clients. There are a few clients who are interested in investing Rs. 50 crores, so we may close earlier than 30th September.
Wov, why did you choose me? did your mind ask or are you now EXPECTING this Platinum club treatment?
Oh of course you have arrived. You drive a Merc you stay in a house costing Rs. 9 crores, with a market value of Rs. 13 crores, your kids are in Ivy League…don’t you DESERVE this treatment? Of course you do. You are exclusive.
Now, be careful. The best run businesses – like my friend who runs a construction business – are very very vary of taking outside money. Outside money as equity is almost a no-no. He takes loans from friends at at rate NEVER exceeding 15% – which is perhaps the rate that he will get in a PSU bank (if at all).
Now come to performance. The adviser is going to tell you the following:
- sir this is exclusive
- your bank RM can’t even think of getting this deal
- no, your IFA or RIA can’t get this deal, just 4 of us on an all India basis….
- SIP of Rs. 5L or Rs. 5000 is passe. It is for the middle class, you are Upper class
What about the companies in which we are going to invest?
Well sir, the fund in which you are investing was an early investor in Mouthshut.com, Makemytrip.com, Yatra.com, Zomato……………..blah blah. So now they are running a VC firm and an Angel funding firm also. You can expect to double your money in 5 years time..giving you about 14% – which is what the first set of investors have got in the past 5 years. Yes they made mistakes too, but over all they have got about 18% cagr in their investments in the past 12 years.
This is hardly about returns. It is about status. You will be able to access deals that nobody else can. You will be meeting a lot of people in the same league. Actors, businessmen, top professionals – not the small time crowd. These people will be talking about Trump, and Visa problems. Not about crowded airports. You see they sit in Lounges – not the Hoi Polli ones.
It is about belonging.
Returns? Oh damn it.
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