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Illiquid assets · room 03 of 13
One illiquid asset class taken to the bottom on one jurisdiction, from the entry instrument to the certificate that releases the last tranche. Thirteen rooms stand open in this family, and the discipline they run on does not change when the asset class does.
Where complexity arises · Illiquid assets · thirteen rooms
01 · The position
Where the work sits
An investment committee in one country, an entity chain in another, a register in a third language and a delivery machine on the ground: the architecture has to carry all four, and it has to carry them for a decade. Structuring discipline, governance a committee can defend and control that does not dilute with distance are the things a structure can be built to hold. They are the whole subject of this reading.
We are appointed by the manager, and by no one else, for the life of the mandate. The chain that keeps that true is set out at Independence.
02 · The structural questions
Settled at entry
The delivery mechanism
Brief, team, cost, programme, contract and completion each sit under a named authority. Which authority, held by whom, and answerable to which document, is a structural choice taken at entry. We design it. The party the manager appoints holds it.
The entry question
Entry route, site control, the diligence the route requires and the appraisal it has to survive. This is the work that settles whether the exposure can be built at all, and it is cheap only while every option is still open.
The verification cycle
What evidence releases a drawdown, on what cycle, tested by whom, and what happens when the evidence does not arrive: those are terms of the instrument, not habits of a site visit. We specify the cycle and the test. An appointed party runs it and answers for it.
The procurement route
Route, tender and contract strategy decide where risk sits and who carries it. Compared and stress-tested while the choice is still reversible, which is before the route is selected and not after.
The land test
Before capital stands on it, the position clears a fixed documentary threshold of six heads: chain, records, possession, consents, charges and disputes, with the defects named in writing before commitment.
03 · Sectors
Where structure decides the outcome
Sector
Where the eventual buyer underwrites the file as well as the building, the specification, the certifications and the evidence behind them are structural terms rather than finishes, and they have to be fixed before the appraisal is built on them.
Sector
Where connection, allocation and long-lead equipment sit ahead of ground in the dependency chain, the consent calendar and the drawdown test have to be drawn against those dates, not against the construction programme.
Sector
Where the position has to be aggregated before it can be built, the entity chain carries an assembly problem and a construction problem at once, and the phase map that answers one of them is rarely the map that answers the other.
04 · India
The entry conditions
Construction development in India carries one hundred per cent foreign investment without an approval committee. The structural work is in the conditions attached to it, because each one is a term of the way out: a lock-in that runs per tranche, an exit gated on completion as the municipality defines it, and a prohibition on land trading that sits one drafting error away from most structures.
The rulebook is treated as part of the site. Structured on day one, diarised for the life of the scheme, evidenced when the exit comes.
05 · The instrument
Inside Mobilise
The firm's method runs in six moves: define, map, design, compare, stress-test, mobilise. On a development asset the last of the six unfolds into eight capital decisions, each closed by a named deliverable, from entry structuring to the memorandum that evidences the exit conditions item by item. The eight are the delivery sequence for this asset class. The six are the method underneath every asset class.
The Eight Gates
A gate is a decision with a deliverable, and the deliverable is what an investment committee reads three years later.
06 · What is published
The readings
Four readings stand in the open, each taken to the point where it binds: where structures break, what a transaction can be built out of, which steps cannot be taken a second time, and the questions the published instruments leave unsettled.
Failure points
Each entry names the assumption underneath it, the instrument that creates the constraint, the stage at which it usually surfaces, what it costs to find it there, and the question that would have caught it first.
Structures
The vehicle, the chain beneath it, the financing, the security, the way out and the economics. Each reading takes one structural question and follows it to the point at which it binds.
Critical path
Mandate to first drawdown, in order, with every step marked reversible, expensive to reverse, or a one-way door. The order is not a preference.
Open questions
What the texts do and do not say, what turns on the answer commercially, the position taken in the meantime, and what would close it. Dated, because they are expected to move.
07 · Thirteen rooms
The rooms
No gate stands here: the family is published whole. Two rooms state the asset class without a jurisdiction under it, and eleven work one jurisdiction to the bottom. Enter anywhere. Every reading names the room beside it, and every reading ends by naming the next.
Two rooms sit outside this family and are read beside it: Independence, which sets out the chain that keeps one duty of care intact, and Our views, which is expected to move.
We are an independent specialist transaction-architecture firm. The investment decision is taken by the manager before we are engaged; what we design is the architecture through which it can be implemented, and the parties the manager appoints operate it.
Built for managers who cross borders.
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