Approach
We carry out few transactions each year. The method below describes what happens between the first conversation and the disposal of the asset.
Origination
Transactions reach us by three routes: direct relationships with sellers, professional intermediation, and competitive processes. We do not buy lists and we do not respond to unsolicited canvassing.
The first screening is carried out against written criteria. Most of the transactions analysed do not pass this stage.
Analysis
Before any commitment, the transaction is subject to documentary, legal and financial analysis.
In real estate, this includes the land registry and tax register position of the property (situação registal e matricial), charges and encumbrances, licensing, and physical inspection of the condition of the asset.
In company acquisition and in going-concern transfer (trespasse), it includes the review of accounts, declared and undeclared liabilities, contracts with clients and suppliers, the employment position, and effective title to the elements that make up the business establishment (estabelecimento).
In early-stage holdings, it includes the capital structure, the existing shareholders' agreements (acordos parassociais), intellectual property and the obligations assumed towards earlier investors.
When the analysis reveals a fact that changes the premise of the transaction, the transaction stops. This happens often and it is the expected result of the process.
Structuring
Each transaction is structured within a separate company, with its own accounts and its own perimeter of liability. No transaction answers for the obligations of another.
The transaction company is the counterparty to all contracts relating to that transaction, including the capital subscription agreements. Realchain, S.A. is not the issuer of the subscriptions.
The subscription agreements are contracts for participation in the outcome of the transaction. The capital invested is exposed to the risk of total loss. There is no promise of repayment of capital and no promise of fixed remuneration.
Execution and monitoring
After closing, the transaction moves to active monitoring. Periodic reporting to those who take part, based on the accounts of the transaction company itself.
The monitoring covers what went as planned and what did not. Reporting frequency to be confirmed.
Exit
Each transaction has an estimated horizon and an exit route identified at the point of entry. Both may change, and the reporting records when they change and why.
The distribution of results, where it occurs, is made at the level of the transaction company and in accordance with what is contracted.
What we do not do
- We do not enter transactions that we cannot explain in writing on one page.
- We do not enter transactions whose thesis depends solely on an increase in market value.
- We do not enter transactions in which title to the asset cannot be verified by documentation.
- We do not accept capital from anyone who does not understand that they may lose the whole of the amount invested.