Merchant Bank

Merchant bank
Financial institution that specializes in services such as acceptance of bills of exchange, hire
purchase or installment buying, international trade financing, long-term loans, and
management of investment portfolios. Merchant banks also advise on (and invest own
funds in) acquisitions, mergers, and takeovers. In the US, a merchant account provider is
sometimes called a merchant bank.(Business Dictionary)
FUNCTIONS OF MERCHANT BANK:-
Portfolio management
Issue management
Project finance
Leasing
Loan syndication
Portfolio management
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Portfolio Management may refer to:
• Portfolio manager, in investment management

• IT portfolio management
• Project management
Portfolio manager

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Please help improve this article by adding citations to reliable sources. Unsourced material
may be challenged and removed. (August 2008)
A portfolio manager is a person who makes investment decisions using money other people
have placed under his or her control. In other words, it is a financial career involved in
investment management. They work with a team of analysts and researchers, and are ultimately
responsible for establishing an investment strategy, selecting appropriate investments and
allocating each investment properly for a fund- or asset-management vehicle.
Portfolio managers are presented with investment ideas from internal buy-side analysts and sell-
side analysts from investment banks. It is their job to sift through the relevant information and
use their judgment to buy and sell securities. Throughout each day, they read reports, talk to
company managers and monitor industry and economic trends looking for the right company and
time to invest the portfolio's capital.
Portfolio managers make decisions about investment mix and policy, matching investments to
objectives, asset allocation for individuals and institutions, and balancing risk against.
performance.
Portfolio management is about strengths, weaknesses, opportunities and threats in the choice of
debt vs. equity, domestic vs. international, growth vs. safety, and other tradeoffs encountered in
the attempt to maximize return at a given appetite for risk.
In the case of mutual and exchange-traded funds (ETFs), there are two forms of portfolio
management: passive and active. Passive management simply tracks a market index, commonly
referred to as indexing or index investing. Active management involves a single manager, co-
managers, or a team of managers who attempt to beat the market return by actively managing a
fund's portfolio through investment decisions based on research and decisions on individual
holdings. Closed-end funds are generally actively managed.
Investment management

"Asset management" redirects here. For other uses, see Asset management (disambiguation).
Investment management is the professional management of various securities (shares, bonds

and other securities) and assets (e.g., real estate), to meet specified investment goals for the
benefit of the investors. Investors may be institutions (insurance companies, pension funds,
corporations etc.) or private investors (both directly via investment contracts and more
commonly via collective investment schemes e.g. mutual funds or exchange-traded funds) .
The term asset management is often used to refer to the investment management of collective
investments, (not necessarily) whilst the more generic fund management may refer to all forms
of institutional investment as well as investment management for private investors. Investment
managers who specialize in advisory or discretionary management on behalf of (normally
wealthy) private investors may often refer to their services as wealth management or portfolio
management often within the context of so-called "private banking".
The provision of 'investment management services' includes elements of financial statement

analysis, asset selection, stock selection, plan implementation and ongoing monitoring of
investments. Investment management is a large and important global industry in its own right
responsible for caretaking of trillions of dollars, euro, pounds and yen. Coming under the remit
of financial services many of the world's largest companies are at least in part investment
managers and employ millions of staff and create billions in revenue.
Fund manager (or investment adviser in the United States) refers to both a firm that provides
investment management services and an individual who directs fund management decisions.
IT portfolio management
IT portfolio management is the application of systematic management to large classes of items

managed by enterprise Information Technology (IT) capabilities. Examples of IT portfolios
would be planned initiatives, projects, and ongoing IT services (such as application support). The
promise of IT portfolio management is the quantification of previously mysterious IT efforts,
enabling measurement and objective evaluation of investment scenarios.
Contents
[hide]
• 1 Overview
• 2 Benefits of using IT portfolio
management
• 3 Implementing IT portfolio management
• 4 IT portfolio management vs. balanced
scorecard
• 5 History
o 5.1 McFarlan's IT portfolio matrix
• 6 Relationship to other IT disciplines
• 7 See also
• 8 References
• 9 Further reading
[edit] Overview
Debates exist on the best way to measure value of IT investment. As pointed out by Jeffery and
Leliveld (2004) [1], companies have spent billions of dollars on IT investments and yet the
headlines of mis-spent money are not uncommon. Nicholas Carr (2003) has caused significant
controversy in IT industry and academia by positioning IT as an expense similar to utilities such
as electricity.
IT portfolio management started with a project-centric bias, but is evolving to include steady-
state portfolio entries such as application maintenance and support in portfolios is that IT budgets
tend not to track these efforts at a sufficient level of granularity for effective financial tracking.[2]
The concept is analogous to financial portfolio management, but there are significant differences.
IT investments are not liquid, like stocks and bonds (although investment portfolios may also
include illiquid assets), and are measured using both financial and non-financial yardsticks (for
example, a balanced scorecard approach); a purely financial view is not sufficient.
Financial portfolio assets typically have consistent measurement information (enabling accurate
and objective comparisons), and this is at the base of the concept’s usefulness in application to
IT. However, achieving such universality of measurement is going to take considerable effort in
the IT industry. (See Val IT.)
IT Portfolio management is distinct from IT financial management in that it has an explicitly

directive, strategic goal in determining what to continue investing in versus what to divest from.
At its most mature, IT Portfolio management is accomplished through the creation of two
portfolios:
• Application Portfolio - Management of this portfolio focuses on
comparing spending on established systems based upon their relative
value to the organization. The comparison can be based upon the level
of contribution in terms of IT investment’s profitability. Additionally,
this comparison can also be based upon the non-tangible factors such
as organizations’ level of experience with a certain technology, users’
familiarity with the applications and infrastructure, and external forces
such as emergence of new technologies and obsolesce of old ones.
• Project Portfolio - This type of portfolio management specially address
the issues with spending on the development of innovative capabilities
in terms of potential ROI and reducing investment overlaps in
situations where reorganization or acquisition occurs. The
management issues with the second type of portfolio management can
be judged in terms of data cleanliness, maintenance savings, suitability
of resulting solution and the relative value of new investments to
replace these projects.
Information Technology portfolio management as a systematic discipline is more applicable to

larger IT organizations; in smaller organizations its concerns might be generalized into IT
planning and governance as a whole.
[edit] Benefits of using IT portfolio management
Jeffery and Leliveld (2004) have listed several benefits of applying IT portfolio management
approach for IT investments. They argue that agility of portfolio management is its biggest
advantage over investment approaches and methods. Other benefits include central oversight of
budget, risk management, strategic alignment of IT investments, demand and investment
management along with standardization of investment procedure, rules and plans.
[edit] Implementing IT portfolio management
Jeffery and Leliveld (2004) have pointed out a number of hurdles and success factors that CIOs
might face while attempting to implement IT portfolio management approach. To overcome
these hurdles, simple methods such as proposed by Pisello (2001) can be used.
-Plan-
- -
- -
build retire
- -
- -
Maintain
Other implementation methods include (1) risk profile analysis (figure out what needs to be
measured and what risks are associated with it), (2) Decide on the Diversification of projects,
infrastructure and technologies (it is an important tool that IT portfolio management provides to
judge the level of investments on the basis of how investments should be made in various
elements of the portfolio), (3) Continuous Alignment with business goals (highest levels of
organizations should have a buy-in in the portfolio) and (4) Continuous Improvement (lessons
learned and investment adjustments).
There is no single best way to implement IT portfolio approach and therefore variety of
approaches can applied. Obviously the methods are not set in stone and will need altering
depending upon the individual circumstances of different organizations.
[edit] IT portfolio management vs. balanced scorecard
The biggest advantage of IT portfolio management is the agility of the investment adjustments.
While balanced scorecards also emphasize the use of vision and strategy in any investment
decision, oversight and control of operation budgets is not the goal. IT portfolio management
allows organizations to adjust the investments based upon the feedback mechanism built into the
IT portfolio management.
[edit] History
McFarlan [3] is considered to be the first to propose portfolio management approach to IT assets
and investments. Further contributions have been made by Weill and Broadbent,[4], Aitken,[5]
Kaplan, [2] and Benson, Bugnitz, and Walton[6]. The ITIL version 2 Business Perspective[7] and
Application Management[8] volumes and the ITIL v3 Service Strategy volume also cover it in
depth.
Various vendors have offerings explicitly branded as "IT Portfolio Management" solutions.
ISACA's Val IT framework is perhaps the first attempt at standardization of IT portfolio

management principles.
In peer-reviewed research, Christopher Verhoef has found that IT portfolios statistically behave
more akin to biological populations than financial portfolios.[9] Verhoef was general chair of the
first convening of the new IEEE conference, "IEEE Equity," March 2007, which focuses on
"quantitative methods for measuring, predicting, and understanding the relationship between IT
and value."[1]
[edit] McFarlan's IT portfolio matrix
High
^
|---------------------------------------------------
------------|
|strategic | Turnaround |
Impact |---------------------------------------------------
------------|
of IS/IT |Critical to achieving |May be critical to
|
applications |future business strategy. |achieving future
|
on future | (Developer) |business success |
industry | | (Entrepreneur)
|
competitiveness |Central Planning |
|
| |Leading Edge/Free Market |
|---------------------------------------------------
------------|
|Critical to existing business |Valuable but not
critical |
|operations |to success |
| (Controller) | (Caretaker) |
| | |
|Monopoly |Scarce Resource |
|_______________________________|
_______________________________|
|Factory | Support |
|
<---------------------------------------------------------------
Low
High
Value to the business of existing applications.
[edit] Relationship to other IT disciplines

This section does not cite any references or sources.
Please help improve this article by adding citations to reliable sources.
Unsourced material may be challenged and removed. (March 2008)
IT portfolio management is an enabling technique for the objectives of IT Governance. It is

related to both IT Service Management and Enterprise Architecture, and might even be seen as a
bridge between the two. ITIL v3 calls for Service Portfolio Management which appears to be
functionally equivalent.
Project management
Project management is the discipline[1] of planning, organizing, and managing resources to

bring about the successful completion of specific project goals and objectives. It is often closely
related to and sometimes conflated with program management.
A project is a temporary endeavor, having a defined beginning and end (usually constrained by
date, but can be by funding or deliverables[2]), undertaken to meet particular goals and
objectives[3], usually to bring about beneficial change or added value. The temporary nature of
projects stands in contrast to business as usual (or operations)[4], which are repetitive, permanent
or semi-permanent functional work to produce products or services. In practice, the management
of these two systems is often found to be quite different, and as such requires the development of
distinct technical skills and the adoption of separate management.
The primary challenge of project management is to achieve all of the project goals[5] and
objectives while honoring the preconceived project constraints.[6] Typical constraints are scope,
time, and budget.[2] The secondary—and more ambitious—challenge is to optimize the allocation
and integration of inputs necessary to meet pre-defined objectives.
Contents
[hide]
• 1 History of project management

• 2 Project management approaches
o 2.1 The traditional approach
o 2.2 Critical Chain Project Management
o 2.3 Extreme Project Management
o 2.4 Event chain methodology
o 2.5 PRINCE2
o 2.6 Process-based management
• 3 Project development stages
o 3.1 Initiation
o 3.2 Planning and design
o 3.3 Executing
o 3.4 Monitoring and Controlling
o 3.5 Closing
o 3.6 Project control systems
• 4 Project management topics
o 4.1 Project managers
o 4.2 Project Management Triangle
o 4.3 Work Breakdown Structure
o 4.4 Project Management Framework
o 4.5 International standards
o 4.6 Project portfolio management
• 5 See also
• 6 References
• 7 External links
[edit] History of project management

Roman Soldiers Building a Fortress, Trajan's Column 113 AD
Project management has been practiced since early civilization. Until 1900 civil engineering
projects were generally managed by creative architects and engineers themselves, among those
for example Vitruvius (1st century BC), Christopher Wren (1632–1723) , Thomas Telford (1757-
1834) and Isambard Kingdom Brunel (1806–1859) [7] It was in the 1950s that organizations
started to systematically apply project management tools and techniques to complex projects.[8]
Henry Gantt (1861-1919), the father of planning and control techniques.
As a discipline, Project Management developed from several fields of application including

construction, engineering, and defense activity.[9] Two forefathers of project management are
Henry Gantt, called the father of planning and control techniques[10], who is famous for his use of
the Gantt chart as a project management tool; and Henri Fayol for his creation of the 5
management functions which form the foundation of the body of knowledge associated with
project and program management.[11] Both Gantt and Fayol were students of Frederick Winslow
Taylor's theories of scientific management. His work is the forerunner to modern project
management tools including work breakdown structure (WBS) and resource allocation.
The 1950s marked the beginning of the modern Project Management era. Project management
was formally recognized as a distinct discipline arising from the management discipline.[1] In the
United States, prior to the 1950s, projects were managed on an ad hoc basis using mostly Gantt
Charts, and informal techniques and tools. At that time, two mathematical project-scheduling
models were developed. The "Critical Path Method" (CPM) was developed as a joint venture
between DuPont Corporation and Remington Rand Corporation for managing plant maintenance
projects. And the "Program Evaluation and Review Technique" or PERT, was developed by
Booz-Allen & Hamilton as part of the United States Navy's (in conjunction with the Lockheed
Corporation) Polaris missile submarine program;[12] These mathematical techniques quickly
spread into many private enterprises.
PERT network chart for a seven-month project with five milestones
At the same time, as project-scheduling models were being developed, technology for project
cost estimating, cost management, and engineering economics was evolving, with pioneering
work by Hans Lang and others. In 1956, the American Association of Cost Engineers (now
AACE International; the Association for the Advancement of Cost Engineering) was formed by
early practitioners of project management and the associated specialties of planning and
scheduling, cost estimating, and cost/schedule control (project control). AACE continued its
pioneering work and in 2006 released the first integrated process for portfolio, program and
project management (Total Cost Management Framework).
The International Project Management Association (IPMA) was founded in Europe in 1967,[13] as
a federation of several national project management associations. IPMA maintains its federal
structure today and now includes member associations on every continent except Antarctica.
IPMA offers a Four Level Certification program based on the IPMA Competence Baseline (ICB)
http://www.ipma.ch/publication/Pages/ICB-IPMACompetenceBaseline.aspx. The ICB covers
technical competences, contextual competences, and behavioral competences.
In 1969, the Project Management Institute (PMI) was formed in the USA.[14] PMI publishes A
Guide to the Project Management Body of Knowledge (PMBOK Guide), which describes project
management practices that are common to "most projects, most of the time." PMI also offers
multiple certifications.
[edit] Project management approaches
There are a number of approaches to managing project activities including agile, interactive,
incremental, and phased approaches.
Regardless of the methodology employed, careful consideration must be given to the overall
project objectives, timeline, and cost, as well as the roles and responsibilities of all participants
and stakeholders.
[edit] The traditional approach
A traditional phased approach identifies a sequence of steps to be completed. In the "traditional

approach", we can distinguish 5 components of a project (4 stages plus control) in the
development of a project:
Typical development phases of a project
• Project initiation stage;

• Project planning or design stage;
• Project execution or production stage;
• Project monitoring and controlling systems;
• Project completion stage.
Not all the projects will visit every stage as projects can be terminated before they reach
completion. Some projects do not follow a structured planning and/or monitoring stages. Some
projects will go through steps 2, 3 and 4 multiple times.
Many industries use variations on these project stages. For example, when working on a brick
and mortar design and construction, projects will typically progress through stages like Pre-
Planning, Conceptual Design, Schematic Design, Design Development, Construction Drawings
(or Contract Documents), and Construction Administration. In software development, this
approach is often known as the waterfall model[15], i.e., one series of tasks after another in linear
sequence. In software development many organizations have adapted the Rational Unified
Process (RUP) to fit this methodology, although RUP does not require or explicitly recommend
this practice. Waterfall development works well for small, well defined projects, but often fails
in larger projects of undefined and ambiguous nature. The Cone of Uncertainty explains some of
this as the planning made on the initial phase of the project suffers from a high degree of
uncertainty. This becomes especially true as software development is often the realization of a
new or novel product. In projects where requirements have not been finalized and can change,
requirements management is used to develop an accurate and complete definition of the behavior
of software that can serve as the basis for software development[16]. While the terms may differ
from industry to industry, the actual stages typically follow common steps to problem solving —
"defining the problem, weighing options, choosing a path, implementation and evaluation."
[edit] Critical Chain Project Management
Critical Chain Project Management (CCPM) is a method of planning and managing projects that
puts more emphasis on the resources (physical and human) needed in order to execute project
tasks. It is an application of the Theory of Constraints (TOC) to projects. The goal is to increase
the rate of throughput (or completion rates) of projects in an organization. Applying the first
three of the five focusing steps of TOC, the system constraint for all projects is identified as are
the resources. To exploit the constraint, tasks on the critical chain are given priority over all other
activities. Finally, projects are planned and managed to ensure that the resources are ready when
the critical chain tasks must start, subordinating all other resources to the critical chain.
Regardless of project type, the project plan should undergo Resource Leveling, and the longest
sequence of resource-constrained tasks should be identified as the critical chain. In multi-project
environments, resource leveling should be performed across projects. However, it is often
enough to identify (or simply select) a single "drum" resource—a resource that acts as a
constraint across projects—and stagger projects based on the availability of that single resource.
Planning and feedback loops in Extreme Programming (XP) with the time
frames of the multiple loops.
[edit] Extreme Project Management
In critical studies of Project Management, it has been noted that several of these fundamentally
PERT-based models are not well suited for the multi-project company environment of today.
[citation needed]
Most of them are aimed at very large-scale, one-time, non-routine projects, and
nowadays all kinds of management are expressed in terms of projects.
Using complex models for "projects" (or rather "tasks") spanning a few weeks has been proven
to cause unnecessary costs and low maneuverability in several cases. Instead, project
management experts try to identify different "lightweight" models, such as Agile Project
Management methods including Extreme Programming for software development and Scrum
techniques.
The generalization of Extreme Programming to other kinds of projects is extreme project

management, which may be used in combination with the process modeling and management
principles of human interaction management.
[edit] Event chain methodology
Event chain methodology is another method that complements critical path method and critical
chain project management methodologies.
Event chain methodology is an uncertainty modeling and schedule network analysis technique
that is focused on identifying and managing events and event chains that affect project schedules.
Event chain methodology helps to mitigate the negative impact of psychological heuristics and
biases, as well as to allow for easy modeling of uncertainties in the project schedules. Event
chain methodology is based on the following principles.
• Probabilistic moment of risk: An activity (task) in most real life

processes is not a continuous uniform process. Tasks are affected by
external events, which can occur at some point in the middle of the
task.
• Event chains: Events can cause other events, which will create event
chains. These event chains can significantly affect the course of the
project. Quantitative analysis is used to determine a cumulative effect
of these event chains on the project schedule.
• Critical events or event chains: The single events or the event
chains that have the most potential to affect the projects are the
“critical events” or “critical chains of events.” They can be determined
by the analysis.
• Project tracking with events: Even if a project is partially
completed and data about the project duration, cost, and events
occurred is available, it is still possible to refine information about
future potential events and helps to forecast future project
performance.
• Event chain visualization: Events and event chains can be
visualized using event chain diagrams on a Gantt chart.
[edit] PRINCE2
The PRINCE2 process model
PRINCE2 is a structured approach to project management, released in 1996 as a generic project

management method.[17] It combined the original PRINCE methodology with IBM's MITP
(managing the implementation of the total project) methodology. PRINCE2 provides a method
for managing projects within a clearly defined framework. PRINCE2 describes procedures to
coordinate people and activities in a project, how to design and supervise the project, and what to
do if the project has to be adjusted if it does not develop as planned.
In the method, each process is specified with its key inputs and outputs and with specific goals
and activities to be carried out. This allows for automatic control of any deviations from the plan.
Divided into manageable stages, the method enables an efficient control of resources. On the
basis of close monitoring, the project can be carried out in a controlled and organized way.
PRINCE2 provides a common language for all participants in the project. The various
management roles and responsibilities involved in a project are fully described and are adaptable
to suit the complexity of the project and skills of the organization.
[edit] Process-based management
Capability Maturity Model, predecessor of the CMMI Model
Also furthering the concept of project control is the incorporation of process-based management.
This area has been driven by the use of Maturity models such as the CMMI (Capability Maturity
Model Integration) and ISO/IEC15504 (SPICE - Software Process Improvement and Capability
Estimation).
Agile Project Management approaches based on the principles of human interaction management
are founded on a process view of human collaboration. This contrasts sharply with the traditional
approach. In the agile software development or flexible product development approach, the
project is seen as a series of relatively small tasks conceived and executed as the situation
demands in an adaptive manner, rather than as a completely pre-planned process.
[edit] Project development stages
Traditionally, project development includes a number of elements: four to five stages, and a
control system. Regardless of the methodology used, the project development process will have
the same major stages.
The project development stages[18]
Major stages generally include:
• Initiation
• Planning or development
• Production or execution
• Monitoring and controlling
• Closing
In project environments with a significant exploratory element (e.g., Research and development),
these stages may be supplemented with decision points (go/no go decisions) at which the
project's continuation is debated and decided. An example is the Stage-Gate model.
[edit] Initiation
Initiating Process Group Processes[18]

The initiation stage determines the nature and scope of the development. If this stage is not
performed well, it is unlikely that the project will be successful in meeting the business’s needs.
The key project controls needed here are an understanding of the business environment and
making sure that all necessary controls are incorporated into the project. Any deficiencies should
be reported and a recommendation should be made to fix them.
The initiation stage should include a plan that encompasses the following areas:
• Analyzing the business needs/requirements in measurable goals

• Reviewing of the current operations
• Conceptual design of the operation of the final product
• Equipment and contracting requirements including an assessment of
long lead time items
• Financial analysis of the costs and benefits including a budget
• Stakeholder analysis, including users, and support personnel for the
project
• Project charter including costs, tasks, deliverables, and schedule
[edit] Planning and design
Planning Process Group Activities[18]
After the initiation stage, the system is designed. Occasionally, a small prototype of the final
product is built and tested. Testing is generally performed by a combination of testers and end
users, and can occur after the prototype is built or concurrently. Controls should be in place that
ensure that the final product will meet the specifications of the project charter. The results of the
design stage should include a product design that:
• Satisfies the project sponsor, end user, and business requirements

• Functions as it was intended
• Can be produced within acceptable quality standards
• Can be produced within time and budget constraints
[edit] Executing
Executing Process Group Processes[18]
Executing consists of the processes used to complete the work defined in the project
management plan to accomplish the project's requirements. Execution process involves
coordinating people and resources, as well as integrating and performing the activities of the
project in accordance with the project management plan. The deliverables are produced as
outputs from the processes performed as defined in the project management plan. type of design..
[edit] Monitoring and Controlling
Monitoring and Controlling consists of those processes performed to observe project execution
so that potential problems can be identified in a timely manner and corrective action can be
taken, when necessary, to control the execution of the project. The key benefit is that project
performance is observed and measured regularly to identify variances from the project
management plan.
Monitoring and Controlling Process Group Processes[18]
Monitoring and Controlling includes:
• Measuring the ongoing project activities (where we are);

• Monitoring the project variables (cost, effort, scope, etc.) against the
project management plan and the project performance baseline
(where we should be);
• Identify corrective actions to address issues and risks properly (How
can we get on track again);
• Influencing the factors that could circumvent integrated change control
so only approved changes are implemented
In multi-phase projects, the Monitoring and Controlling process also provides feedback between
project phases, in order to implement corrective or preventive actions to bring the project into
compliance with the project management plan.
Project Maintenance is an ongoing process, and it includes:
• Continuing support of end users

• Correction of errors
• Updates of the software over time
Monitoring and Controlling cycle
In this stage, auditors should pay attention to how effectively and quickly user problems are
resolved.
Over the course of any construction project, the work scope may change. Change is a normal and
expected part of the construction process. Changes can be the result of necessary design
modifications, differing site conditions, material availability, contractor-requested changes, value
engineering and impacts from third parties, to name a few. Beyond executing the change in the
field, the change normally needs to be documented to show what was actually constructed. This
is referred to as Change Management. Hence, the owner usually requires a final record to show
all changes or, more specifically, any change that modifies the tangible portions of the finished
work. The record is made on the contract documents – usually, but not necessarily limited to, the
design drawings. The end product of this effort is what the industry terms as-built drawings, or
more simply, “as built.” The requirement for providing them is a norm in construction contracts.
When changes are introduced to the project, the viability of the project has to be re-assessed. It is
important not to lose sight of the initial goals and targets of the projects. When the changes
accumulate, the forecasted result may not justify the original proposed investment in the project.
[edit] Closing
Closing Process Group Processes.[18]
Closing includes the formal acceptance of the project and the ending thereof. Administrative
activities include the archiving of the files and documenting lessons learned.
This phase consists of:
• Project close: Finalize all activities across all of the process groups to
formally close the project or a project phase
• Contract closure: Complete and settle each contract (including the
resolution of any open items) and close each contract applicable to the
project or project phase
[edit] Project control systems
Project control is that element of a project that keeps it on-track, on-time and within budget.
Project control begins early in the project with planning and ends late in the project with post-
implementation review, having a thorough involvement of each step in the process. Each project
should be assessed for the appropriate level of control needed: too much control is too time
consuming, too little control is very risky. If project control is not implemented correctly, the
cost to the business should be clarified in terms of errors, fixes, and additional audit fees.
Control systems are needed for cost, risk, quality, communication, time, change, procurement,
and human resources. In addition, auditors should consider how important the projects are to the
financial statements, how reliant the stakeholders are on controls, and how many controls exist.
Auditors should review the development process and procedures for how they are implemented.
The process of development and the quality of the final product may also be assessed if needed
or requested. A business may want the auditing firm to be involved throughout the process to
catch problems earlier on so that they can be fixed more easily. An auditor can serve as a
controls consultant as part of the development team or as an independent auditor as part of an
audit.
Businesses sometimes use formal systems development processes. These help assure that
systems are developed successfully. A formal process is more effective in creating strong
controls, and auditors should review this process to confirm that it is well designed and is
followed in practice. A good formal systems development plan outlines:
• A strategy to align development with the organization’s broader

objectives
• Standards for new systems
• Project management policies for timing and budgeting
• Procedures describing the process
• Evaluation of quality of change
[edit] Project management topics
[edit] Project managers
A project manager is a professional in the field of project management. Project managers can
have the responsibility of the planning, execution, and closing of any project, typically relating to
construction industry, architecture, computer networking, telecommunications or software
development. Many other fields in the production, design and service industries also have project
managers.
A project manager is the person accountable for accomplishing the stated project objectives. Key
project management responsibilities include creating clear and attainable project objectives,
building the project requirements, and managing the triple constraint for projects, which is cost,
time, and scope.
A project manager is often a client representative and has to determine and implement the exact
needs of the client, based on knowledge of the firm they are representing. The ability to adapt to
the various internal procedures of the contracting party, and to form close links with the
nominated representatives, is essential in ensuring that the key issues of cost, time, quality and
above all, client satisfaction, can be realized.
[edit] Project Management Triangle
The Project Management Triangle.
Like any human undertaking, projects need to be performed and delivered under certain
constraints. Traditionally, these constraints have been listed as "scope," "time," and "cost".[2]
These are also referred to as the "Project Management Triangle," where each side represents a
constraint. One side of the triangle cannot be changed without affecting the others. A further
refinement of the constraints separates product "quality" or "performance" from scope, and turns
quality into a fourth constraint.
The time constraint refers to the amount of time available to complete a project. The cost
constraint refers to the budgeted amount available for the project. The scope constraint refers to
what must be done to produce the project's end result. These three constraints are often
competing constraints: increased scope typically means increased time and increased cost, a tight
time constraint could mean increased costs and reduced scope, and a tight budget could mean
increased time and reduced scope.
The discipline of Project Management is about providing the tools and techniques that enable the
project team (not just the project manager) to organize their work to meet these constraints.
[edit] Work Breakdown Structure

Example of a Work breakdown structure applied in a NASA reporting
structure.[19]
The Work Breakdown Structure (WBS) is a tree structure, which shows a subdivision of effort
required to achieve an objective; for example a program, project, and contract. The WBS may be
hardware, product, service, or process oriented.
A WBS can be developed by starting with the end objective and successively subdividing it into
manageable components in terms of size, duration, and responsibility (e.g., systems, subsystems,
components, tasks, subtasks, and work packages), which include all steps necessary to achieve
the objective.[16]
The Work Breakdown Structure provides a common framework for the natural development of
the overall planning and control of a contract and is the basis for dividing work into definable
increments from which the statement of work can be developed and technical, schedule, cost,
and labor hour reporting can be established.[19]
[edit] Project Management Framework
Example of an IT Project Management Framework.[18]

The Program (Investment) Life Cycle integrates the project management and system
development life cycles with the activities directly associated with system deployment and
operation. By design, system operation management and related activities occur after the project
is complete and are not documented within this guide.[18]
For example, see figure, in the US United States Department of Veterans Affairs (VA) the
program management life cycle is depicted and describe in the overall VA IT Project
Management Framework to address the integration of OMB Exhibit 300 project (investment)
management activities and the overall project budgeting process. The VA IT Project
Management Framework diagram illustrates Milestone 4 which occurs following the deployment
of a system and the closing of the project. The project closing phase activities at the VA
continues through system deployment and into system operation for the purpose of illustrating
and describing the system activities the VA considers part of the project. The figure illustrates
the actions and associated artifacts of the VA IT Project and Program Management process.[18]
[edit] International standards
There have been several attempts to develop Project Management standards, such as:
• Capability Maturity Model from the Software Engineering Institute.

• GAPPS, Global Alliance for Project Performance Standards- an open
source standard describing COMPETENCIES for project and program
managers.[20]
• A Guide to the Project Management Body of Knowledge
• HERMES method, Swiss general project management method, selected
for use in Luxembourg and international organisations.
• The ISO standards ISO 9000, a family of standards for quality
management systems, and the ISO 10006:2003, for Quality
management systems and guidelines for quality management in
projects.
• PRINCE2, PRojects IN Controlled Environments.
• Team Software Process (TSP) from the Software Engineering Institute.
• Total Cost Management Framework, AACE International's Methodology
for Integrated Portfolio, Program and Project Management)
• V-Modell, an original systems development method.
[edit] Project portfolio management
An increasing number of organisations are using, what is referred to as, project portfolio
management (PPM) as a means of selecting the right projects and then using project management
techniques[21] as the means for delivering the outcomes in the form of benefits to the performing
private or not-for-profit organisation.
Project management methods are used 'to do projects right' and the methods used in PPM are
used 'to do the right projects'. In effect PPM is becoming the method of choice for selection and
prioritising among resource inter-related projects in many industries and sectors.
Issue management
In business, Issue Management refers to the discipline and process of managing business issues
and usually implies using technology to electronically automate the process. Electronic issue
management has gathered steam as a business and technology movement in recent years[when?] as
mid-sized and large businesses have realized the advantage of implementing systems to manage,
document, and track work.[citation needed]
Early examples of issue management systems appeared in the late 1980s with customer ticketing
systems. Businesses that implemented these systems were often addressing customer complaints
and needed a method to document, track, and manage complaints to successful resolution. These
systems evolved with the widespread introduction of Information Technology departments,
leading to wider deployment of issue management systems in the form of 'help desk' systems.
Today, help desk and ticketing remain the most prevalent roles for issue management systems,
[citation needed]
though common enterprise-wide systems have emerged to consolidate and increase
visibility of issues across an organization.
[edit] Product or software development
Today, issue management systems are commonly used by product development companies to
manage requests, changes to products, and reported defects.
A typical issue workflow might look like this with regard to issue state: [issue submitted] ->
[open] -> [in evaluation] -> [in work] -> [in test] -> [closed] Where the [in test] and [in work]
phases often loop.
A typical issue management electronic workflow might look like this with regard to roles:
1. An issue is submitted by a customer, salesperson, engineer, or test

engineer, often via a web browser.
2. The issue management system logs the issue and relocates the issue
to a predefined representative's inbox.
3. The representative evaluates the issue and assigns it to an appropriate
employee.
4. Work is done on the issue, documented in the system, and closed.
5. In most processes, the originator is notified that the issue has been
resolved.
Any issue management process in which there are well defined inputs and outputs can be
automated electronically.
There are both private and open source issue management software solutions[clarification needed]
available to companies interested in implementing issue management.
Open source issue management systems are steadily improving, but still have some short-
comings compared to commercial solutions.[citation needed] At the time of this writing[when?] they have
not incorporated important system features related to project integration. Specifically, open
source solutions have not yet delivered features that contextualize issues as a part of an overall
project, incorporate dependent and transitional fields, and support multiple workflows within a
single interface.
Issues Management Version 1.1

∅⊃Tryon and Associates Page 1
Process Description:
During the course of any project, it is common for numerous topics, events
or concerns to occur
that are of interest to the Project Organization. Issues Management provides
the process to
record, assign and track each of these issues to resolution.
Process Purpose:
The purpose of Issues Management is to insure that any concerns recognized
during a project are
addressed in a timely manner and do not go unresolved until they become
major problems.
Use Criteria:
Issues Management should be used anytime someone in the Project
Organization recognizes an
subject matter that may be of interest to the project, something that could
effect the project or
may have an influence on some entity beyond project boundaries. These
issues may include but
are not limited to...
New business directions
A change in the scope of the project
New technical directions
A choice between one path over another
A future decision that must be made
An early alert to a potential problem
These issues may at times become linked to one or more Project Change
Request.
Process Flow:
1.0 Document the Potential Project Issue – The Issues Management
process begins with the
recognition of a any topic, event or action that is of concern to the Project
Organization.
The most common source of these issues is from the Status Reports of
Project Team
members. When an issue is recognized, the Project Manager should
document a general
description of the issue, the potential impact of the issues and any
suggested resolution for
the issue.
2.0 Assign Ownership of the Issue - Ownership of the issue should be
assigned to the most
likely individual who can effectively resolve this issue. Ownership may be to
a team
member who will investigate the issue or it may be given to a business
executive to resolve.
If there is any confusion about the ownership of a specific issues, it should be
assigned by
the Project Owner. The date of assignment and any needed resolution date
should also be
identified.
Process Definition
ISSUES MANAGEMENT
Last Date Revised: 12/12/98 Version 1.1
Project finance

Project finance is the long term financing of infrastructure and industrial projects based upon
the projected cash flows of the project rather than the balance sheets of the project sponsors.
Usually, a project financing structure involves a number of equity investors, known as sponsors,
as well as a syndicate of banks that provide loans to the operation. The loans are most
commonly non-recourse loans, which are secured by the project assets and paid entirely from
project cash flow, rather than from the general assets or creditworthiness of the project sponsors,
a decision in part supported by financial modeling.[1] The financing is typically secured by all of
the project assets, including the revenue-producing contracts. Project lenders are given a lien on
all of these assets, and are able to assume control of a project if the project company has
difficulties complying with the loan terms.
Generally, a special purpose entity is created for each project, thereby shielding other assets
owned by a project sponsor from the detrimental effects of a project failure. As a special purpose
entity, the project company has no assets other than the project. Capital contribution
commitments by the owners of the project company are sometimes necessary to ensure that the
project is financially sound. Project finance is often more complicated than alternative financing
methods. Traditionally, project financing has been most commonly used in the mining,
transportation, telecommunication and public utility industries. More recently, particularly in
Europe, project financing principles have been applied to public infrastructure under public-
private partnerships (PPP) or, in the UK, Private Finance Initiative (PFI) transactions.
Risk identification and allocation is a key component of project finance. A project may be
subject to a number of technical, environmental, economic and political risks, particularly in
developing countries and emerging markets. Financial institutions and project sponsors may
conclude that the risks inherent in project development and operation are unacceptable
(unfinanceable). To cope with these risks, project sponsors in these industries (such as power
plants or railway lines) are generally completed by a number of specialist companies operating in
a contractual network with each other that allocates risk in a way that allows financing to take
place.[2] The various patterns of implementation are sometimes referred to as "project delivery
methods." The financing of these projects must also be distributed among multiple parties, so as
to distribute the risk associated with the project while simultaneously ensuring profits for each
party involved.
A riskier or more expensive project may require limited recourse financing secured by a surety
from sponsors. A complex project finance structure may incorporate corporate finance,
securitization, options, insurance provisions or other types of collateral enhancement to mitigate
unallocated risk.[2]
Project finance shares many characteristics with maritime finance and aircraft finance; however,
the latter two are more specialized fields.
Contents
[hide]
• 1 Basic scheme
• 2 Complicating
factors
• 3 History
• 4 See also
• 5 References
[edit] Basic scheme

Hypothetical project finance scheme
Acme Coal Co. imports coal. Energen Inc. supplies energy to consumers. The two companies
agree to build a power plant to accomplish their respective goals. Typically, the first step would
be to sign a memorandum of understanding to set out the intentions of the two parties. This
would be followed by an agreement to form a joint venture.
Acme Coal and Energen form an SPC (Special Purpose Corporation) called Power Holdings Inc.
and divide the shares between them according to their contributions. Acme Coal, being more
established, contributes more capital and takes 70% of the shares. Energen is a smaller company
and takes the remaining 30%. The new company has no assets.
Power Holdings then signs a construction contract with Acme Construction to build a power
plant. Acme Construction is an affiliate of Acme Coal and the only company with the know-how
to construct a power plant in accordance with Acme's delivery specification.
A power plant can cost hundreds of millions of dollars. To pay Acme Construction, Power
Holdings receives financing from a development bank and a commercial bank. These banks
provide a guarantee to Acme Construction's financier that the company can pay for the
completion of construction. Payment for construction is generally paid as such: 10% up front,
10% midway through construction, 10% shortly before completion, and 70% upon transfer of
title to Power Holdings, which becomes the owner of the power plant.
Acme Coal and Energen form Power Manage Inc., another SPC, to manage the facility. The
ultimate purpose of the two SPCs (Power Holding and Power Manage) is primarily to protect
Acme Coal and Energen. If a disaster happens at the plant, prospective plaintiffs cannot sue
Acme Coal or Energen and target their assets because neither company owns or operates the
plant.
A Sale and Purchase Agreement (SPA) between Power Manage and Acme Coal supplies raw
materials to the power plant. Electricity is then delivered to Energen using a wholesale delivery
contract. The cashflow of both Acme Coal and Energen from this transaction will be used to
repay the financiers.
[edit] Complicating factors
The above is a simple explanation which does not cover the mining, shipping, and delivery
contracts involved in importing the coal (which in itself could be more complex than the
financing scheme), nor the contracts for delivering the power to consumers. In developing
countries, it is not unusual for one or more government entities to be the primary consumers of
the project, undertaking the "last mile distribution" to the consuming population. The relevant
purchase agreements between the government agencies and the project may contain clauses
guaranteeing a mimimum offtake and thereby guarantee a certain level of revenues. In other
sectors including road transportation, the government may toll the roads and collect the revenues,
while providing a guaranteed annual sum (along with clearly specified upside and downside
conditions) to the project. This serves to minimise or eliminate the risks associated with traffic
demand for the project investors and the lenders.
Minority owners of a project may wish to use "off-balance-sheet" financing, in which they
disclose their participation in the project as an investment, and excludes the debt from financial
statements by disclosing it as a footnote related to the investment. In the United States, this
eligibility is determined by the Financial Accounting Standards Board. Many projects in
developing countries must also be covered with war risk insurance, which covers acts of hostile
attack, derelict mines and torpedoes, and civil unrest which are not generally included in
"standard" insurance policies. Today, some altered policies that include terrorism are called
Terrorism Insurance or Political Risk Insurance. In many cases, an outside insurer will issue a
performance bond to guarantee timely completion of the project by the contractor.
Publicly-funded projects may also use additional financing methods such as tax increment
financing or Private Finance Initiative (PFI). Such projects are often governed by a Capital
Improvement Plan which adds certain auditing capabilities and restrictions to the process.
[edit] History
Limited recourse lending was used to finance maritime voyages in ancient Greece and Rome. Its
use in infrastructure projects dates to the development of the Panama Canal, and was widespread
in the US oil and gas industry during the early 20th century. However, project finance for high-
risk infrastructure schemes originated with the development of the North Sea oil fields in the
1970s and 1980s. For such investments, newly created Special Purpose Corporations (SPCs)
were created for each project, with multiple owners and complex schemes distributing insurance,
loans, management, and project operations. Such projects were previously accomplished through
utility or government bond issuances, or other traditional corporate finance structures.
Project financing in the developing world peaked around the time of the Asian financial crisis,
but the subsequent downturn in industrializing countries was offset by growth in the OECD
countries, causing worldwide project financing to peak around 2000. The need for project
financing remains high throughout the world as more countries require increasing supplies of
public utilities and infrastructure. In recent years, project finance schemes have become
increasingly common in the Middle East, some incorporating Islamic finance.
The new project finance structures emerged primarily in response to the opportunity presented
by long term power purchase contracts available from utilities and government entities. These
long term revenue streams were required by rules implementing PURPA, the Public Utilities
Regulatory Policies Act of 1978. Originally envisioned as an energy initiative designed to
encourage domestic renewable resources and conservation, the Act and the industry it created
lead to further deregulation of electric generation and, significantly, international privatization
following amendments to the Public Utilities Holding Company Act in 1994. The structure has
evolved and forms the basis for energy and other projects throughout the world.
Leasing
It has been suggested that this article or section be merged into Renting.
(Discuss)
This article relies largely or entirely upon a single source. Please help
improve this article by introducing appropriate citations of additional
sources. (January 2009)
This article is about a property agreement in private law. For leased

territories in international law, see Concession (territory). For leasing of cars,
see Vehicle leasing. For relevant material on the system in the United States,
see Accounting for leases in the United States. For other aspects of leasing,
see leasehold estates.
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must
pay a series of contractual, periodic, tax deductible payments. The lessee is the receiver of the
services or the assets under the lease contract and the lessor is the owner of the assets. The
relationship between the tenant and the landlord is called a tenancy, and can be for a fixed or an
indefinite period of time (called the term of the lease). The consideration for the lease is called
rent. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all
property charges regularly incurred by the ownership
Under normal circumstances, an owner of property is at liberty to do what they want with their
property, including destroy it or hand over possession of the property to a tenant. However, if the
owner has surrendered possession to another (ie the tenant) then any interference with the quiet
enjoyment of the property by the tenant in lawful possession is unlawful.
Similar principles apply to real property as well as to personal property, though the terminology
would be different. Similar principles apply to sub-leasing, that is the leasing by a tenant in
possession to a sub-tenant. The right to sub-lease can be expressly prohibited by the main lease.
Contents
[hide]
• 1 Formality of a lease
• 2 Term of a lease
• 3 Rent
• 4 Leasing of real property
• 5 Leasing of tangible personal property
• 6 Real leases
o 6.1 Private property rental
o 6.2 Commercial leasehold
 6.2.1 Advantages of commercial leasing
 6.2.2 Disadvantages of commercial leasing
• 7 Leasing Internationally
• 8 References
[edit] Formality of a lease
A tenancy for years greater than 1 year must be in writing in order to satisfy the Statute of Frauds
[edit] Term of a lease
The term of the lease may be fixed, periodic or of indefinite duration.
If it is for a specified period of time, the term ends automatically when the period expires, and no
notice needs to be given, in the absence of legal requirements.
The term's duration may be conditional, in which case it lasts until some specified event occurs,
such as the death of a specified individual.
A periodic tenancy is one which is renewed automatically, usually on a monthly or weekly basis.
A tenancy at will lasts only as long as the parties wish it to, and be terminated without penalty by
either party.
It is common for a lease to be extended on a "holding over" basis, which normally converts the
tenancy to a periodic tenancy on a month by month basis.
[edit] Rent
Rent is a requirement of leases in common law jurisdiction, but not in civil law jurisdiction.
There is no requirement for the rent to be a commercial amount. "Pepper corn" rent or rent of
some nominal amount is adequate for this requirement.
[edit] Leasing of real property
(See rental agreement and leasehold estate for more detail.)
There are different types of ownership for land but, in common law states, the most common
form is the fee simple absolute, where the legal term fee has the old meaning of real property, i.e.
real estate. An owner of the fee simple holds all the rights and privileges to that property and,
subject to the laws, codes, rules and regulations of the local law, can sell or by contract or grant,
permit another to have possession and control of the property through a lease or tenancy
agreement. For this purpose, the owner is called the lessor or landlord, and the other person is
called the lessee or tenant, and the rights to possess and control the land are exchanged for some
payment (called consideration in legal English), usually a monthly rent. The acceptance of rent
by the landowner from a tenant creates (or extends) most of the rights of tenancy even without a
written lease (or beyond the time limit of an expiring lease). Although leases can be oral
agreements that are periodic, i.e. extended indefinitely and automatically, written leases should
always define the period of time covered by the lease. In the 1930s, the British government
introduced infinite leases, only to remove the power to create these in the early 1990s. A lease
may be:
• a fixed-term agreement, in other words one of these two:

o for a specified period of time (the "term"), and end when the
term expires;
o conditional, i.e. last until some specified event occurs, such as
the death of a specified individual; or
• a periodic agreement, in other words renewed automatically
o usually on a monthly or weekly basis
o at will, i.e. last only as long as the parties wish it to, and be
terminated without penalty by either party.
Because ownership is retained by the lessor, he or she always has the better right to enforce all
the contractual terms and conditions affecting the use of the land. Normally, the contract will be
express (i.e. set out in full and, hopefully, plain language), but where a contract is silent or
ambiguous, terms can be implied by a court where this would make commercial sense of the
transaction between the parties. One important right that may or may not be allowed the lessee, is
the ability to create a sublease or to assign the lease, i.e. to transfer control to a third party.
Hence, the builder of an office block may create a lease of the whole in favour of a management
company that then finds tenants for the individual units and gives them control.
Under common law, a lease should have three essential characteristics:

1. A definite term (whether fixed or periodic)
2. At a rent
3. confer exclusive possession
[edit] Leasing of tangible personal property
An owner can allow another the use of a vehicle (such as vehicle leasing of a car, a truck or an
airliner) or a computer either for a fixed period of time or at will. This can be a simple leasing
transaction, or it can be a transaction intended to allow the user the right to buy the item at some
future time.
• In a simple lease (rental) of a car, P pays O a rental for the use of the
car during the agreed period which may be a few days (e.g. for a
holiday trip) or longer where it is more economic to pay for use rather
than pay for the ownership of an asset of depreciating value. Normally,
only P will be allowed to use the vehicle and, in such a case, P has
possession and control. But, P could be an employer who allows C the
use of the car to visit clients, and thereby gives C control.
• In a lease with the possibility of purchase, O could allow P to lease the

car for a specified period of time. If all the rental payments are made in
full, P will then be allowed to buy the car at the contractual purchase
option price. In a consumer lease subject to the federal Consumer
Leasing Act and the Truth in Lending Act, the purchase option price
can not be a "bargain" purchase, that is, it cannot be less than the
originally estimated fair market value. A "bargain" purchase creates an
installment sale, to which the Truth in Lending Act (TILA) applies
including the standardized disclosures, most importantly the Annual
Percentage Rate (APR). Typically, the vehicle dealer or other personal
property seller offers the leasing terms and contract of a third party
finance company. Hence, O leases the vehicle to P, and upon execution
of the contract simultaneously sells ownership of the car to F and
assigns the lease contract to F. It is standard for the contractual terms
to prohibit P from parting with possession or control of the car to
another (if P does part with possession, this can be a theft of the car
from F).
There are two principal types of leasing, depending upon the party taking the risk of the value of
the vehicle (or other leased property) at lease end. In the U.S. this is called Closed-end leasing.
In other jurisdictions, it is called hire purchase, lease purchase or finance leasing. These
transactions are complicated. The most common problem arises when O makes specific
representations as to the quality and reliability of the car to P during the initial negotiations. If
what is said induces P to buy the car from O, those representations would usually be enforceable
against O. But, in this transaction, O first sells the car to F who makes no representations to P.
The laws vary from state to state on the extent to which P might be allowed a remedy if the car
proves to be of poor quality.
To clarify the concept, the owner of tangible movables has the power to keep possession and
only to transfer control. This may be for:
• short- or long-term storage (e.g. leaving a passport with hotel staff or

depositing valuable property in a bank vault — a hotel or bank holding
property is a bailee); or
• for delivery purposes (e.g. using a carrier to transport goods to a
specific destination); or
• it may be a form of mortgage — a pawnshop holds a pledge over the
goods deposited until the money lent is repaid.
Leasing is a common method by which airlines acquire their aircraft, usually from companies
specialised in the field of Commercial Aircraft Sales and Leasing. Aircraft leasing transactions
are typically divided into finance leasing and operating leasing.
Businesses often choose to lease rather than buy office equipment, including computers. Since
office equipment depreciates rapidly, leasing can be more cost-efficient than ownership.
In addition, more and more unconventional items are becoming available for lease, such as
handbags and luxury watches.
[edit] Real leases
Whether it is better to lease or buy land will be determined by each state's legal and economic
systems. In those countries where acquiring title is complicated, the state imposes high taxes on
owners, transaction costs are high, and finance is difficult to obtain, leasing will be the norm.
But, freely available credit at low interest rates with minimal tax disadvantages and low
transaction costs will encourage land ownership. Whatever the system, most adult consumers
have, at some point in their lives, been party to a real estate lease which can be as short as a
week, as long as 999 years, or perpetual (only a few states permit ownership to be alienated
indefinitely). For commercial property, whether there is a depreciation allowance depends on the
local state taxation system. If a lease is created for a term of, say, ten years, the monthly or
quarterly rent is a fixed cost during the term. The term of years may have an asset value for
balance sheet purposes and, as the term expires, that value depreciates. However, the
apportionment of relief as between business expense and depreciating asset is for each state to
make (all that is certain is that the lessee cannot have a double allowance).
[edit] Private property rental
Rental, tenancy, and lease agreements are formal and informal contracts between an identified
landlord and tenant giving rights to both parties, e.g. the tenant's right to occupy the
accommodation for an agreed term and the landlord’s right to receive an agreed rent. If one of
these elements is missing, only a tenancy at will or bare licence comes into being. In some legal
systems, this has unfortunate consequences. When a formal tenancy is created, the law usually
implies obligations for the lessor, e.g. that the property meets certain minimum standards of
habitability. With a bare licence, some states do not imply any significant lessee protections
A tenancy agreement can be made up of:
• express terms. These include what is in the written agreement (if there
is one), in the rent book, and/or what was agreed orally (if there is
clear evidence of what was said).
• implied terms. These are the standard terms established by custom
and practice or the minimum rights and duties formally implied by law.
[edit] Commercial leasehold
Generally speaking in the modern US legal framework, commercial real property leases fall into
one of just a few categories: Office, Retail, Warehouse, Ground, and a catch-all hybrid often
referred to as "Mixed Use". Each has certain typical characteristics, although Ground leases may
differ somewhat, taking on some characteristics of Retail leasing when associated with a retail
project, like a shopping center; and although Mixed Use projects can vary greatly depending
upon the various inclusions and the size of the overall project, among other things. It is widely
appreciated by those who specialize in commercial leasing, including the business side and the
legal side, that, other than hybrids such as Mixed Use project leasing, Retail leasing can have the
most complexity.
Mixed Use projects often have elements of most or all of the other categories, not infrequently
including a hotel, office building, ground floor retail with residential condominium above and a
parking garage. The interplay of all these different components with each other and the
underlying property documents which describe, define, and control their interactions, operation
and management, as well as the division of costs for the operation of the site, are typically very
complex.
Retail leasing often requires the parties to address issues typically not addressed at all in other
types of commercial leasing which have no retail component. These additional challenges
include such topics as exclusives and restrictive covenants, radius restrictions on near-by self-
competition, co-tenancy, no-build areas and visibility corridors, parking ratio assurances, signage
concerns (including pylons, monuments, and criteria), CAM and CAM caps and controls
(including the "cumulative" and "non-cumulative" concepts), continuous operating covenants,
and much more.
[edit] Advantages of commercial leasing
For businesses, leasing property may have significant financial benefits:
• Leasing is less capital-intensive than purchasing, so if a business has

constraints on its capital, it can grow more rapidly by leasing property
than it could by purchasing the property outright.
• Capital assets may fluctuate in value. Leasing shifts risks to the lessor,
but if the property market has shown steady growth over time, a
business that depends on leased property is sacrificing capital gains.
• Because of investments which are done with leasing, new businesses
are formed. Furthermore, unemployment in that country is decreased.
• Leasing may provide more flexibility to a business which expects to
grow or move in the relatively short term, because a lessee is not
usually obliged to renew a lease at the end of its term.
• In some cases a lease may be the only practical option; such as for a
small business that wishes to locate in a large office building within
tight locational parameters.
• Depreciation of capital assets has different tax and financial reporting
treatment from ordinary business expenses. Lease payments are
considered expenses, which can be set off against revenue when
calculating taxable profit at the end of the relevant tax accounting
period.
[edit] Disadvantages of commercial leasing
For businesses, leasing property may have significant drawbacks:
• A net lease may shift some or all of the maintenance costs onto the
tenant.
• If circumstances dictate that a business must change its operations
significantly, it may be expensive or otherwise difficult to terminate a
lease before the end of the term. In some cases, a business may be
able to sublet property no longer required, but this may not recoup the
costs of the original lease, and, in any event, usually requires the
consent of the original lessor. Tactical legal considerations usually
make it expedient for lessees to default on their leases. The loss of
book value is small and any litigation can usually be settled on
advantageous terms. This is an improvement on the position for those
companies owning their own property. Although it can be easier for a
business to sell property if it has the time, forced sales frequently
realise lower prices and can seriously affect book value.
• If the business is successful, lessors may demand higher rental
payments when leases come up for renewal. If the value of the
business is tied to the use of that particular property, the lessor has a
significant advantage over the lessee in negotiations.
[edit] Leasing Internationally
The practice of leasing is well established in most countries of the world [1] .
However the benefits (in particular the tax benefits) to the lessee and lessor will vary widely
depending on national accounting standards and tax regulations. These largely divide into
countries observing:
• Legal Form: the lessors legal ownership of the property. or

• Substance: the lessee legal right to use the property.
National accounting standards vary in the tests that decide if the lease is a:
• Capital or Finance Lease, which is considered a financing transaction

- as the lessor has less of the risks of ownership, such as the value of
the equipment in future years.
• Operating Lease, whose term is short compared to the useful life of
the asset, where the lessee does not have to show the lease on their
balance sheet.
Lease
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Please help improve this article by adding reliable references. Unsourced
material may be challenged and removed. (August 2008)
It has been suggested that this article or section be merged into Leasehold
estate. (Discuss)
It has been suggested that this article or section be merged with Rental
agreement. (Discuss)
The examples and perspective in this article may not represent a

worldwide view of the subject. Please improve this article and discuss
the issue on the talk page.
See also: leasing and renting

A lease is a contract conferring a right on one person (called a tenant or lessee) to possess
property belonging to another person (called a landlord or lessor) to the exclusion of the owner
landlord, and all others except with the invitation of the tenant. It is a rental agreement between
landlord and tenant.[1] The relationship between the tenant and the landlord is called a tenancy,
and the right to possession by the tenant is sometimes called a leasehold interest. A lease can be
for a fixed period of time (called the term of the lease) but (depending on the terms of the lease)
may be terminated sooner. The consideration for the lease is called rent or the rental.
A lease should be contrasted to a license, which may entitle a person (called a licensee) to use
property, but which is subject to termination at the will of the owner of the property (called the
licensor). An example of a license is the relationship between a parking lot owner and a person
who parks a vehicle in the parking lot.
Under normal circumstances, owners of property are at liberty to do what they want with their
property (for a lawful purpose), including dealing with it or handing over possession of the
property to a tenant for a limited period of time. If an owner has surrendered possession to
another (i.e., the tenant) then any interference with the quiet enjoyment of the property by the
tenant in lawful possession is itself unlawful.
Similar principles apply to real property as well as to personal property, though the terminology
would be different. Similar principles apply to sub-leasing, that is the leasing by a tenant in
possession to a sub-tenant. The right to sub-lease can be expressly prohibited by the main lease,
sometimes referred to as a "master lease".
Contents
[hide]
• 1 Types of tenancies
o 1.1 Fixed-term tenancy or tenancy for years
o 1.2 Periodic tenancy
o 1.3 Tenancy at will
o 1.4 Tenancy at sufferance
• 2 Formalities of a lease
• 3 Term of a lease
• 4 Rent
• 5 Land lease
• 6 History
• 7 References
• 8 See also
[edit] Types of tenancies
[edit] Fixed-term tenancy or tenancy for years

A fixed-term tenancy or tenancy for years lasts for some fixed period of time. Despite the
name tenancy for years, such a tenancy can last for any period of time — even a tenancy for one
week may be called a tenancy for years. At Common law the duration did not need to be certain,
but could be conditioned upon the happening of some event, (e.g., "until the crops are ready for
harvest" or "until the war is over"). In many jurisdictions that possibility has been partially or
totally abolished.[2]
A fixed term tenancy comes to an end automatically when the fixed term runs out or, in the case
of a tenancy that ends on the happening of an event, when the event occurs.
[edit] Periodic tenancy
A periodic tenancy, also known as a tenancy from year to year, month to month, or week to
week, is an estate that exists for some period of time determined by the term of the payment of
rent. An oral lease for a tenancy of years that violates the Statute of Frauds (by committing to a
lease of more than — depending on the jurisdiction — one year without being in writing) may
actually create a periodic tenancy, depending on the laws of the jurisdiction where the leased
premises are located. In many jurisdictions the "default" tenancy, where the parties have not
explicitly specified a different arrangement, and where none is presumed under local or business
custom, is a month-to-month tenancy.
Either the landlord or the tenant may terminate a periodic tenancy at any time by giving the
notice to the other party as required by statute or case law in the jurisdiction. Typically, the
landlord must give six months' notice to terminate a tenancy from year to year. Tenants of lesser
durations must typically receive notice equal to the period of the tenancy - for example, the
landlord must give a month's notice to terminate a tenancy from month to month. However,
many jurisdictions have varied these required notice periods, and some have reduced them
drastically. For jurisdictions that have local rent control laws, a landlord's ability to terminate a
residential tenancy is substantially reduced. For example, in California, the cities of Los Angeles,
Santa Monica, West Hollywood, San Francisco, and Oakland have "rent stabilization
ordinances" that limit a landlord's ability to terminate a periodic tenancy, among other
restrictions.
The notice must also state the effective date of termination, which, in some jurisdictions, must be
on the last day of the payment period. In other words, if a month-to-month tenancy began on the
15th of the month, in a jurisdiction with a last day requirement the termination could not be
effective on the 20th of the following month, even though this would give the tenant more than
the required one month's notice.
[edit] Tenancy at will
A tenancy at will is a tenancy which either the landlord or the tenant may terminate at any time
by giving reasonable notice. It usually occurs in the absence of a lease, or where the tenancy is
not for consideration. Under the modern common law, a tenancy at will is very rare, partly
because it usually comes about if the parties expressly agree that the tenancy is at will and not for
rent. A tenancy at will is common where a family member is allowed to live in a home (a
nominal consideration may be required) without any formal arrangements. In most residential
tenancies for a fixed term, for consideration, the tenant may not be removed except for cause,
even if there is no written lease. (However, an oral lease for more than 12 months is not
enforceable if the statute of frauds in the jurisidction includes leases of more than 12 months.)
Alternatively, a tenancy at will may exist for a temporary period where a tenant wishes to take
possession of a property and the landlord agrees, but there is insufficient time in which to
negotiate and complete a new lease. In this case, the tenancy at will is terminated as soon as a
new lease is negotiated and signed. The parties may also agree on the basis that if the parties fail
to enter into a new lease within a reasonable time period, then the tenant must vacate the
premises.
If a lease exists at the sole discretion of the landlord, the law of the jurisdiction may imply that
the tenant is granted, by operation of law, a reciprocal right to terminate the lease at will.
However, a lease that explicitly exists at the will of the tenant (e.g. "for as long as the tenant
desires to live on this land") generally does not imply that the landlord may terminate the lease;
rather, such language may be interpreted as granting the tenant a life estate or even a fee simple.
A tenancy at will is broken, again by operation of law, if the:
• Tenant commits waste against the property;

• Tenant attempts to assign the tenancy;
• Landlord transfers his/her interest in the property;
• Landlord leases the property to another person;
• Tenant or landlord dies.
The specifics of these rules differ from jurisidction to jurisdiction
Subject to any notice required by law, a tenancy at will also comes to an end when either the
landlord or the tenant acts inconsistently with a tenancy. For example, the changing of locks by
the landlord is an indication of the end of the tenancy, as is the vacation of the premises by the
tenant. However, in some jurisdictions, such as California, a landlord is prohibited from using a
"self help" remedy, such as changing the locks, to terminate a tenancy, particularly a residential
tenancy. Doing so may constitute a "constructive eviction" and expose the landlord to civil and
criminal liability.
[edit] Tenancy at sufferance
A tenancy at sufferance (sometimes called a holdover tenancy) exists when a tenant remains in
possession of a property after the expiration of a lease, and until the landlord acts to eject the
tenant from the property. Although the tenant is technically a trespasser at this point, and
possession of this type is not a true estate in land, authorities recognize the condition in order to
hold the tenant liable for rent. The landlord may evict such a tenant at any time, and without
notice.
The landlord may also impose a new lease on the holdover tenant. For a residential tenancy, this
new tenancy is month to month. For a commercial tenancy of more than a year, the new tenancy
is year to year; otherwise it is the same period as the period before the original lease expired. In
either case, the landlord can raise the rent, so long as the landlord has told the tenant of the
higher rent before the expiration of the original lease.
[edit] Formalities of a lease
The formal requirements for a lease are determined by the law and custom of the jurisdiction in
which real property is located. In the case of personal property, it is determined by the law and
custom of the jurisdiction in which the rental agreement is made.[3]
A tenancy for a duration greater than one year must be in writing in order to satisfy the Statute of
Frauds.
[edit] Term of a lease
The term of the lease may be fixed, periodic or of indefinite duration.
If it is for a specified period of time, the term ends automatically when the period expires, and no
notice needs to be given, in the absence of legal requirements.
The term's duration may be conditional, in which case it lasts until A specified event occurs, such
as the death of a specified individual.
A periodic tenancy is one which is renewed automatically, usually on a monthly or weekly basis.
A tenancy at will lasts only as long as the parties wish it to, and may be terminated by either
party without penalty.
It is common for a lease to be extended on a "holding over" basis, which normally converts the
tenancy to a periodic tenancy on a month by month basis.
It is also possible for a tenant, either expressly or impliedly, to give up the tenancy to the
landlord. This process is known as a surrender of the lease.
[edit] Rent
Rent is a requirement of leases in some common law jurisdiction, but not in civil law
jurisdiction. In England it was held in the case of Ashburn Anstalt v Arnold that rent was not a
requirement for there to be a lease, however the court will more often construe a licence where
no rent is paid as it is seen as evidence for no intention to create legal relationship. There is no
requirement for the rent to be a commercial amount. "Pepper corn" rent or rent of some nominal
amount is adequate for this requirement.
[edit] Land lease
A land lease or ground lease is a lease in which the tenant rents and uses the land, but owns the
temporary or permanent buildings and other objects placed upon it.
This section requires expansion.
[edit] History
Over the centuries, leases have served many purposes and the nature of legal regulation has
varied according to those purposes and the social and economic conditions of the times. Leases,
for example, were mainly used for agricultural purposes until the late 18th century and early 19th
century when the growth of cities in industrialised countries had made leases an important form
of landholding in urban areas.
The modern law of landlord and tenant in common law jurisdictions retains the influence of the
common law and, particularly, the laissez-faire philosophy that dominated the law of contract
and property law in the 19th century. With the growth of consumerism, consumer protection
legislation recognised that common law principles, which assume equal bargaining power
between the contracting parties, create hardships when that assumption is inaccurate.
Consequently reformers have emphasised the need to assess residential tenancy laws in terms of
protection they provide to tenants. Legislation to protect tenants is now common.
Loan Syndication
What Does Loan Syndication Mean?

The process of involving several different lenders in providing various portions of a loan.
Investopedia explains Loan Syndication

Mainly used in extremely large loan situations, syndication allows any one lender to
provide a large loan while maintaining a more prudent and manageable credit exposure
because the lender isn't the only creditor
Syndicated Loan
What Does Syndicated Loan Mean?
A loan offered by a group of lenders (called a syndicate) who work together to provide
funds for a single borrower. The borrower could be a corporation, a large project, or
a sovereignty (such as a government). The loan may involve fixed amounts, a credit
line, or a combination of the two. Interest rates can be fixed for the term of the loan or
floating based on a benchmark rate such as the London Interbank Offered Rate
(LIBOR).
Typically there is a lead bank or underwriter of the loan, known as the "arranger",
"agent", or "lead lender". This lender may be putting up a proportionally bigger share of
the loan, or perform duties like dispersing cash flows amongst the other syndicate
members and administrative tasks.
Also known as a "syndicated bank facility".
Investopedia explains Syndicated Loan

The main goal of syndicated lending is to spread the risk of a borrower default across
multiple lenders (such as banks) or institutional investors like pensions funds and hedge
funds. Because syndicated loans tend to be much larger than standard bank loans, the
risk of even one borrower defaulting could cripple a single lender. Syndicated loans are
also used in the leveraged buyout community to fund large corporate takeovers with
primarily debt funding.
Syndicated loans can be made on a "best efforts" basis, which means that if enough
investors can't be found, the amount the borrower receives will be lower than originally
anticipated. These loans can also be split into dual tranches for banks (who fund
standard revolvers or lines of credit) and institutional investors (who fund fixed-rate term
loans).
Syndicated loan
The examples and perspective in this article may not represent a

worldwide view of the subject. Please improve this article and discuss
the issue on the talk page.
A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and
administered by one or several commercial or investment banks known as arrangers.
Starting with the large leveraged buyout loans of the mid-1980s, the syndicated loan market has
become the dominant way for issuers to tap banks and other institutional capital providers for
loans.
At the most basic level, arrangers serve the investment-banking role of raising investor funding
for an issuer in need of capital. The issuer pays the arranger a fee for this service, and this fee
increases with the complexity and risk factors of the loan. As a result, the most profitable loans
are those to leveraged borrowers—issuers whose credit ratings are speculative grade and who are
paying spreads (premiums above LIBOR or another base rate) sufficient to attract the interest of
non-bank term loan investors. Though, this threshold moves up and down depending on market
conditions.
Contents
[hide]
• 1 Loan Market Overview

• 2 Types of Syndications
o 2.1 Underwritten deal
o 2.2 Best-efforts syndication
o 2.3 Club deal
• 3 The Syndication Process
• 4 Loan Market Participants
• 5 Credit Facilities
[edit] Loan Market Overview
The “retail” market for a syndicated loan consists of banks and, in the case of leveraged
transactions, finance companies and institutional investors. Before formally launching a loan to
these retail accounts, arrangers will often get a market read by informally polling select investors
to gauge their appetite for the credit. After this market read, the arrangers will launch the deal at
a spread and fee that it thinks will clear the market. Until 1998, this would have been it. Once the
pricing was set, it was set, except in the most extreme cases. If the loans were undersubscribed,
the arrangers could very well be left above their desired hold level. Since the Russian debt crisis
roiled the market in 1998, however, arrangers have adopted market-flex language, which allows
them to change the pricing of the loan based on investor demand—in some cases within a
predetermined range—as well as shift amounts between various tranches of a loan, as a standard
feature of loan commitment letters.
As a result of market flex, loan syndication functions as a “book-building” exercise, in bond-

market parlance. A loan is originally launched to market at a target spread or, as was increasingly
common by 2008 with a range of spreads referred to as price talk (i.e., a target spread of, say,
LIBOR+250 to LIBOR+275). Investors then will make commitments that in many cases are
tiered by the spread. For example, an account may put in for $25 million at LIBOR+275 or $15
million at LIBOR+250. At the end of the process, the arranger will total up the commitments and
then make a call on where to price the paper. Following the example above, if the paper is vastly
oversubscribed at LIBOR+250, the arranger may slice the spread further. Conversely, if it is
undersubscribed even at LIBOR+275, then the arranger will be forced to raise the spread to bring
more money to the table.
[edit] Types of Syndications
There are three types of syndications: an underwritten deal, “best-efforts” syndication, and a
“club deal.”
[edit] Underwritten deal
An underwritten deal is one for which the arrangers guarantee the entire commitment, then
syndicate the loan. If the arrangers cannot fully subscribe the loan, they are forced to absorb the
difference, which they may later try to sell to investors. This is easy, of course, if market
conditions, or the credit’s fundamentals, improve. If not, the arranger may be forced to sell at a
discount and, potentially, even take a loss on the paper. Or the arranger may just be left above its
desired hold level of the credit.
Arrangers underwrite loans for several reasons. First, offering an underwritten loan can be a
competitive tool to win mandates. Second, underwritten loans usually require more lucrative fees
because the agent is on the hook if potential lenders balk. Of course, with flex-language now
common, underwriting a deal does not carry the same risk it once did when the pricing was set in
stone prior to syndication.
[edit] Best-efforts syndication
A best-efforts syndication is one for which the arranger group commits to underwrite less than
the entire amount of the loan, leaving the credit to the vicissitudes of the market. If the loan is
undersubscribed, the credit may not close—or may need major surgery to clear the market.
Traditionally, best-efforts syndications were used for risky borrowers or for complex
transactions. Since the late 1990s, however, the rapid acceptance of market-flex language has
made best-efforts loans the rule even for investment-grade transactions.
[edit] Club deal
A club deal is a smaller loan—usually $25 million to $100 million, but as high as $150 million—
that is premarketed to a group of relationship lenders. The arranger is generally a first among
equals, and each lender gets a full cut, or nearly a full cut, of the fees.
[edit] The Syndication Process
Before awarding a mandate, an issuer might solicit bids from arrangers. The banks will outline
their syndication strategy and qualifications, as well as their view on the way the loan will price
in market. Once the mandate is awarded, the syndication process starts. The arranger will prepare
an information memo (IM) describing the terms of the transactions. The IM typically will
include an executive summary, investment considerations, a list of terms and conditions, an
industry overview, and a financial model. Because loans are unregistered securities, this will be a
confidential offering made only to qualified banks and accredited investors. If the issuer is
speculative grade and seeking capital from nonbank investors, the arranger will often prepare a
“public” version of the IM. This version will be stripped of all confidential material such as
management financial projections so that it can be viewed by accounts that operate on the public
side of the wall or that want to preserve their ability to buy bonds or stock or other public
securities of the particular issuer (see the Public Versus Private section below). Naturally,
investors that view materially nonpublic information of a company are disqualified from buying
the company’s public securities for some period of time. As the IM (or “bank book,” in
traditional market lingo) is being prepared, the syndicate desk will solicit informal feedback from
potential investors on what their appetite for the deal will be and at what price they are willing to
invest. Once this intelligence has been gathered, the agent will formally market the deal to
potential investors.
The executive summary will include a description of the issuer, an overview of the transaction
and rationale, sources and uses, and key statistics on the financials. Investment considerations
will be, basically, management’s sales “pitch” for the deal. The list of terms and conditions will
be a preliminary term sheet describing the pricing, structure, collateral, covenants, and other
terms of the credit (covenants are usually negotiated in detail after the arranger receives investor
feedback).
The industry overview will be a description of the company’s industry and competitive position
relative to its industry peers.
The financial model will be a detailed model of the issuer’s historical, pro forma, and projected
financials including management’s high, low, and base case for the issuer.
Most new acquisition-related loans are kicked off at a bank meeting at which potential lenders
hear management and the sponsor group (if there is one) describe what the terms of the loan are
and what transaction it backs. Management will provide its vision for the transaction and, most
important, tell why and how the lenders will be repaid on or ahead of schedule. In addition,
investors will be briefed regarding the multiple exit strategies, including second ways out via
asset sales. (If it is a small deal or a refinancing instead of a formal meeting, there may be a
series of calls or one-on-one meetings with potential investors.) Once the loan is closed, the final
terms are then documented in detailed credit and security agreements. Subsequently, liens are
perfected and collateral is attached.
Loans, by their nature, are flexible documents that can be revised and amended from time to
time. These amendments require different levels of approval. Amendments can range from
something as simple as a covenant waiver to something as complex as a change in the collateral
package or allowing the issuer to stretch out its payments or make an acquisition.
[edit] Loan Market Participants
There are three primary-investor consistencies: banks, finance companies, and institutional
investors. Banks, in this case, can be either a commercial bank, a savings and loan institution, or
a securities firm that usually provides investment-grade loans. These are typically large
revolving credits that back commercial paper or are used for general corporate purposes or, in
some cases, acquisitions. For leveraged loans, banks typically provide unfunded revolving
credits, LOCs, and—although they are becoming increasingly less common—amortizing term
loans, under a syndicated loan agreement. Finance companies have consistently represented less
than 10% of the leveraged loan market, and tend to play in smaller deals—$25 million to $200
million. These investors often seek asset-based loans that carry wide spreads and that often
feature time-intensive collateral monitoring.
Institutional investors in the loan market are principally structured vehicles known as
collateralized loan obligations (CLO) and loan participation mutual funds (known as “prime
funds” because they were originally pitched to investors as a money-market-like fund that would
approximate the prime rate). In addition, hedge funds, high-yield bond funds, pension funds,
insurance companies, and other proprietary investors do participate opportunistically in loans.
Typically, however, they invest principally in wide-margin loans (referred to by some players as
“high-octane” loans), with spreads of LIBOR+500 or higher. During the first half of 2008, these
players accounted for roughly a quarter of overall investment.
CLOs are special-purpose vehicles set up to hold and manage pools of leveraged loans. The
special-purpose vehicle is financed with several tranches of debt (typically a ‘AAA’ rated
tranche, a ‘AA’ tranche, a ‘BBB’ tranche, and a mezzanine tranche) that have rights to the
collateral and payment stream in descending order. In addition, there is an equity tranche, but the
equity tranche is usually not rated. CLOs are created as arbitrage vehicles that generate equity
returns through leverage, by issuing debt 10 to 11 times their equity contribution. There are also
market-value CLOs that are less leveraged—typically 3 to 5 times—and allow managers more
flexibility than more tightly structured arbitrage deals. CLOs are usually rated by two of the three
major ratings agencies and impose a series of covenant tests on collateral managers, including
minimum rating, industry diversification, and maximum default basket. By 2007, CLOs had
become the dominant form of institutional investment in the leveraged loan market, taking a
commanding 60% of primary activity by institutional investors. But when the structured finance
market cratered in late 2007, CLO issuance tumbled and by mid-2008, CLO’s share had fallen to
40%.
Retail investors can access the loan market through prime funds. Prime funds were first
introduced in the late 1980s. Most of the original prime funds were continuously offered funds
with quarterly tender periods. Managers then rolled true closed-end, exchange-traded funds in
the early 1990s. It was not until the early 2000s that fund complexes introduced open-ended
funds that were redeemable each day. While quarterly redemption funds and closed-end funds
remained the standard because the secondary loan market does not offer the rich liquidity that is
supportive of open-end funds, the open-end funds had sufficiently raised their profile that by
mid-2008 they accounted for 15% to 20% of the loan assets held by mutual funds.
[edit] Credit Facilities
Syndicated loans facilities(Credit Facilities) also known as type of loans are basically short\long
term financial assistance programs which is designed to help financial institutions and other
institutional investors to draw notional amount as per the requirement.
In general there are four main types of syndicated loan facilities: a revolving credit; a term loan;
an LOC; an acquisition or equipment line (a delayed-draw term loan).
Merchant Banking 4e
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2.
Merchant Banking Principles & Practice
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Portfolio Management may refer to:

• Portfolio manager, in investment management

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Investment management is the professional management of various securities (shares, bonds

The provision of 'investment management services' includes elements of financial statement

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IT portfolio management is the application of systematic management to large classes of items

IT Portfolio management is distinct from IT financial management in that it has an explicitly

Information Technology portfolio management as a systematic discipline is more applicable to

[edit] Benefits of using IT portfolio management

[edit] Implementing IT portfolio management

[edit] IT portfolio management vs. balanced scorecard

ISACA's Val IT framework is perhaps the first attempt at standardization of IT portfolio

[edit] McFarlan's IT portfolio matrix

Value to the business of existing applications.

[edit] Relationship to other IT disciplines

IT portfolio management is an enabling technique for the objectives of IT Governance. It is

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Project management is the discipline[1] of planning, organizing, and managing resources to

• 1 History of project management

[edit] History of project management

As a discipline, Project Management developed from several fields of application including

PERT network chart for a seven-month project with five milestones

[edit] Project management approaches

[edit] The traditional approach

A traditional phased approach identifies a sequence of steps to be completed. In the "traditional

Typical development phases of a project

• Project initiation stage;

[edit] Critical Chain Project Management

[edit] Extreme Project Management

The generalization of Extreme Programming to other kinds of projects is extreme project

[edit] Event chain methodology

• Probabilistic moment of risk: An activity (task) in most real life

PRINCE2 is a structured approach to project management, released in 1996 as a generic project

[edit] Process-based management

Capability Maturity Model, predecessor of the CMMI Model

[edit] Project development stages

The project development stages[18]

Major stages generally include:

Initiating Process Group Processes[18]

• Analyzing the business needs/requirements in measurable goals

[edit] Planning and design

Planning Process Group Activities[18]

• Satisfies the project sponsor, end user, and business requirements

[edit] Monitoring and Controlling

Monitoring and Controlling Process Group Processes[18]

Monitoring and Controlling includes:

• Measuring the ongoing project activities (where we are);

Project Maintenance is an ongoing process, and it includes:

• Continuing support of end users

Monitoring and Controlling cycle

Closing Process Group Processes.[18]

This phase consists of:

[edit] Project control systems

• A strategy to align development with the organization’s broader