Rehabilitating underperforming investments - tips for the financial investor

During the past year, venture capital and private equity funds have invested a significant amount of time and resources dealing with portfolio companies. Difficult times serve to highlight the importance of effectively monitoring investee company performance and identifying potential trouble spots in advance. When cash is tight and investors are being asked to inject additional funds, consideration needs to be given to the measures that may be taken within the investee company to preserve and even generate cash from the balance sheet. These short-term measures to stabilise a financial crisis must not adversely affect strategies that have been drawn up to focus on the longer-term rehabilitation of the portfolio company.