More than a decade ago the world was shaken up like a snow globe by the global financial crisis.
In America, a country whose economy was particularly ravaged by the world economic collapse, a 37-year-old man took an astonishing gamble by investing every cent of his personal $40 million fortune into his beleaguered companies. This was the risk strategy of this entrepreneur on how he saved and lifted his companies from near bankruptcy amidst the global financial crisis.
Today, Elon Musk’s Tesla is worth more than $208 billion while SpaceX is valued at $46 billion.
Every day, every single one of us takes market risks. Most are small, seemingly inconsequential financial risks which we barely give a second thought.
But sometimes we are faced with more daunting risks; decisions that require intense and careful consideration. While these decisions are unlikely to ever be quite of the scale of Elon Musk’s bold venture back in 2008, they might still scare us a little. Or a lot. Massive gambles rarely pay off in quite such spectacular style.
The principal focus of private lending is capital preservation underpinned by expert risk mitigation and due diligence. At Vado Private, we pride ourselves on providing an expedient service while resolutely maintaining a robust risk strategy and compliance framework.
We don’t ‘feel the fear and do it anyway’, because we don’t “do” fear.
Just like checking a racing car’s brakes, engine and tires is essential before a big race, we have to be vigilant about all components within a private lending transaction before giving the green light (or raising the green flag…).
We carry out comprehensive and thorough appraisals and make decisions based on common sense and first-class business practice.
Real success is almost impossible to achieve without accepting some levels of financial risks, but making the right investment decisions means removing any element of recklessness from risk.
Rather than avoiding it altogether, an effective risk strategy framework therefore effectively captures and oversees all market risks to which parties in a transaction are exposed.
According to Governor Philip Lowe, Australians should not expect the cash rate to go up again for three years, guaranteeing historically low rates. The Reserve Bank strategically slashed the cash rate to 0.1% under a $200B loan program to help revive the economy from the global financial crisis.
Diminishing returns for investors’ banked cash means private lending presents an ever more attractive prospect and an increasingly recognised opportunity for astute real estate investor partners to access enhanced returns at minimal financial risks.
In the last 38 months, Vado Private has circulated more than $150 Million into the private lending market across 53 transactions.
I invite you to reach out for either a confidential discussion or an Information Memorandum on our investment opportunity, annual returns and strategy.