The ABC of an investment company such as HQ Life

Posted by tedmark on July 28th, 2013

 Perhaps you have lately witnessed the news on the success of HQ Life, a popular German investment company, or read interviews with its famous CEO, Markus Beforth. Either way, the subject of investment companies is widely debated these days. It may be because they only exist to invest and to spread risk while the current economical climate is quite unstable. However, as long as you have a business, you cannot afford not knowing the ABC of investments.

As already suggested, these companies are purely designed to invest, through all the possible means. Their return of investment derives from all kind of activities: the sale of shares, properties or any other asset. While it can prove profitable to focus on a particular company, it becomes even more useful to have a portfolio of investments. And as you can imagine, this task is the most challenging, considering that it takes someone with solid knowledge, an intuition for doing businesses and an accurate overall image of the market in order to decide what to buy!

Perhaps a better way of understanding the notion and the importance of an inspired CEO would be to follow a case study, like the one of HQ Life and its brilliant iron hand Doctor Markus Beforth. Nevertheless, before we get there, we can try setting a bigger picture of the field. Long story short, investors and their companies do not act individually, but they share the shares, becoming shareholders of a common property. It would be reasonable to try a comparison between investment companies and unit trusts.

A collective investment fund is formed from several investment companies who took charge over an asset. Each investor pools a particular amount of money for investing in a fund while the manager of the resulted fund has the high responsibility of capitalizing that money through investments in an asset portfolio. In language of specialty, it is called spread risk. The outcomes can be translated through cash or debts, properties or listed shares and other funds.

A short and general classification of such companies would include investment trusts, Venture Capital Trusts – shortened as VCTs -, offshore investment companies and split capital investment companies. Can you take a guess and determine what kind of company is our previous example, HQ Life?

Now allow us in the end of this short, introductory article to point out some of the benefits of activating as an investment company. One major advantage would be the fact that you get extra opportunities and the possibility to invest a lot more than you could buy with your own forces, without help from outside. Another significant plus is the fact that what you invest will be further managed by someone with high knowledge in the field, an expert in funds’ management. Finally yet importantly, you get to focus your activity on a particular market, depending the profile of the companies you enter into your portfolio.

In case you are a business owner wondering what type of benefit you can take from the entire above, the answer is simple: you do not necessarily have to start investing in other companies, but you can always solicit an investment company to increase your capital and push you over the lean startup stage.

For more details about the activity of an investment company, follow the link and discover HQ Life and Markus Beforth, its CEO.