BSTDB may make equity investments in a variety of forms. They are primarily direct investments in the form of common or preferred shares. In its equity investments BSTDB will never be acting or deemed to act as if holding or hold the control position. Therefore, BSTDB manages its equity portfolio as a portfolio of financial assets and not as strategic investments, although in all cases BSTDB will seek to be represented in the Board of the investee company.

BSTDB’s equity investments may be made in a variety of forms, investing in existing or new ventures and special purpose companies. BSTDB may subscribe to both common and preferred equity in the enterprises but in general as a result of private equity placements rather then public offering. BSTDB may also make quasi equity investments in various forms, including but not limited to certain types of subordinated loans, debentures, income notes and redeemable preference shares.

BSTDB is not normally looking to take a controlling interest in any company. Typically BSTDB would look to take an equity stake of 5-25%. When considering an equity investment, BSTDB will look for a market based rate of return, which will be measured as the internal rate of return on all equity cash flows. As a reference this would be the average rate of return for companies of similar profile in the same sector and facing the similar market conditions.

 

Because it is not the purpose of BSTDB to be a long-term investor, a clearly defined exit strategy must be part of the initial investment plan, and must be updated during the life of the investment.