Oversees Private Investment Corporation (OPIC)www.opic.gov
Willis Tower Watsonwww.willis.com
The State Finance Institution for Innovation – up to 20% of capital for every deal from Ukrainian Government
Ernst & Young –
due diligence for UGTI Inc. deal flow for UGTI deal flow
Total Quality Control – an independent Ukrainian firm to systematically audit operations in Ukraine
Emerging markets are considered relatively risky because they carry additional political, economic and currency risks. They certainly aren't for those who value safety and security above all else. An investor in emerging markets should be willing to accept volatile returns - there is a chance for large profits at the risk of large losses. An upside to emerging markets is that their performance is generally less correlated with developed markets. As such, they can play a role in diversifying a portfolio (and thus reducing overall risk).
The key to successful investments in any Emerging Market is risk identification, intermediately with organizational network in the market, access to information, government relations and comprehensive investment management system.
UGTI Inc. developed a proprietary “Risk Mitigation System” to inform and assist our clients. Our ability to identify and manage risks related to all investments provides strong competitive advantage to all of our clients doing business in Ukraine.
1) Country Country risk can reduce the expected return on an investment and must be taken into consideration whenever investing abroad.
2) Political Political risk is the risk an investment's returns could suffer as a result of political changes or instability in a country
3) Currency Currency risk, commonly referred to as exchange-rate risk, arises from the change in price of one currency in relation to another.
4) Emerging Market Economy An emerging market economy is a nation's economy that is progressing toward becoming advanced, as shown by some liquidity in local debt and equity markets and the existence of some form of market exchange and regulatory body.
5) Corruption Corruption is dishonest behavior of those in positions of power, such as managers or government officials.
6) Liquidity Liquidity describes a degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
7) Legislative The risk that legislation by the government could significantly alter the business prospects of one or more companies, adversely affecting investment holding in that company.
8) Counterparty risk Counterparty risk is the risk to each party of a contract that the counterparty will not live up to its contractual obligations.
9) Delivery The risk that a counterparty in a transaction may not be able to fulfill its side of the agreement by failing to deliver the underlying asset or the cash value of the contract.
The Security Risk level of a system is a combination of the importance of maintaining: - The Availability of that system.
- The Integrity of data housed on or managed by that system.
- The Confidentiality of sensitive information stored on that system.
11) General Infrastructure Infrastructure is the basic physical systems of a business or nation. These systems tend to be high-cost investments; however, they are vital to a country's economic development and prosperity.
12) IT Infrastructure Without the information technology (IT) infrastructure, many businesses struggle to share and move data in a way that promotes efficiency within the workplace
13) Transaction Exposure Transaction exposure is the risk, faced by companies involved in international trade, that currency exchange rates will change after the companies have already entered into financial obligations.
14) Price Price risk is the risk of a decline in the value of a security or a portfolio that can be minimized through diversification unlike market risk.
15) Inflation Looking at results without taking into account inflation is the nominal return. The value you should care about is the growth of your purchasing power, referred to as the real return.
16) Judicial System Although judicial independence exists in principle, in practice there is little separation of juridical and political powers. Judges are subjected to pressure by political and business interests. Ukraine's court system is widely regarded as corrupt.
17) Tax Policy In Ukraine all taxes or levies are national or local. Tax collection procedures and tax incentives may be established only by law. According to the Tax Code in Ukraine nowadays there exist 23 taxes and levies, 18 of which are national and 5 local.
18) Import / Export tariffs Governments may impose tariffs to raise revenue or to protect domestic industries from foreign competition, since consumers will generally purchase foreign-produced goods when they are cheaper.
19) Information Information Risk encompasses all the challenges that result from an organisation’s need to control and protect its information.
20) Labor force Number of individuals in an economy who either are employed or are seeking for employment.
21) Corporate Governance Corporate governance is the system of rules, practices and processes by which a company is directed and controlled.
22) Intermediary Agencies As a practical matter, intermediary risk is important not only because it affects individual investors but also because it can be systemic. The failure of an inter-mediary can cause a chain reaction of failures of institutions that have invested in assets held by the intermediary.
23) Cultural Integration Cultural integration is a form of cultural exchange in which one group assumes the beliefs, practices and rituals of another group without sacrificing the characteristics of its own culture.
24) Communication Exchange of information and opinions, and establishment of an effective dialogue, among those responsible for assessing, minimizing, and regulating risks and those who may be affected by the outcomes of those risks.
25) Investment Management A common definition for investment risk is deviation from an expected outcome. We can express this in absolute terms or relative to something else like a market benchmark.