Investment Consulting Business Plan

The key to marketing an investment product is to develop a successful product, develop a pattern of success, and show that pattern can be repeated in the future. After which time, successful products should be aggressively marketed if capacity to manage additional assets exists. While a three to five-year period may seem like millennia compared to the technology world, it is really quite reasonable considering the fact that private equity investors in limited partnership vehicles are generally satisfied with a 10-year waiting period that exists prior to a return of their capital investment. Based on the developmental timeline associated with investment products, this plan provides a financial outline of VISTA INVESTORS’ funding requirements for the first few years of operations.

6.1 Sales Strategy

Our firm’s hallmark investment product will be the Vista Total Market Equity strategy and will be initially offered through an SEC registered mutual fund. Technological advancements also permit for other economically feasible distribution channels such as separately managed portfolios for large account sizes.

The chart and table below provide a more detailed look at our projected sales strategy.

6.2 Database

A proprietary database has been developed to monitor these and other factors, including our reason for purchase or sell. Purchase candidates are characterized by one of the following:

1. Value – cheap, based on common valuation measures (relative value, franchise value, discounted cashflow value) and catalyst or change will cause price to appreciate
2. Relative Value – “middle ground”
3. Growth – growing faster than the market average but price does not represent realizable growth opportunities (e.g. P/E to growth rate ratio)

6.3 Turnover

We expect to turn over approximately 1/3 of the portfolio each year. This is consistent with an average holding period of three years. In general, we would like for all holdings to be long-term investments. Thus we attempt to identify stocks with which we would be comfortable with if we were “locked in” for three years. This forces us to look beyond short-term noise in quarter-to-quarter results and focus on the big picture, such as management’s vision for the future and their probability of executing their plan. However, we do realize that quick price changes, especially in volatile markets, may cause us to realize gains (or losses) sooner than anticipated.