Thursday 27 March 2014

What Is Portfolio Acquisition?

Portfolio purchases involve the buying of lease contract packages and the remaining payments or discounted cash flows associated with them. It is regarded as a financial term which denotes the collection of investments done by any business organization or an individual.

Portfolio acquisition is done by many companies. Risk tolerance, Investment objectives and time frame are the factors on which the portfolio is designed. The economic value of each factor influences either the risk or reward ratio of the portfolio. It is referred to as the allocation of factors or assets.

The work of the companies is to make the portfolio in such a way that it maximizes your profiles and minimizes those assets which poses risks to it. They choose the most preferred ones by considering the risks and returns in the trade-off.



Many types of portfolios are available. Two of those are market portfolio and zero- investment portfolio. Depending on the purpose for which the portfolio is prepared, the type is chosen.Asset allocation is managed by different principles and investment approaches such as capitalization-weighting, equal weighting, risk parity, the capital asset pricing model, price-weighting or arbitrage pricing theory. Jeysen index, sharpe index and the treynor index are among the other factors.

Portfolio acquisition helps in growth of the company or individual. Detailed planning should be done before making one. It should help in:
  • Increasing capitals
  • Managing balance sheet concentrations
  • Managing capital ratios.
However it should always be kept in mind that the company for the acquisition should be chosen wisely. They should be successful in ensuring that the measures taken to build up the profile show maximum profit.

To know more about portfolio acquisition log on to Atlanticus Holdings Corporation.

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