Running Head: Cadim: China & India Real Estate Deals Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

QUESTION 1

Market Entry: Identify the major challenges for a pension fund when investing in a new country? Why should CADIM consider projects in India and China? Why does CADIM place such a high emphasis on assessing the partners before all else? What is the significance of the varied partner evaluation factors in the overall assessment framework? Would you recommend any additions/ deletions?

This case basically emphasizes upon the investments of Cadim, a division of Cuisse De Depot et Placement du Quebec, in the emerging markets of the world. The specific emerging markets that have been considered in this case which are the next choice of Cadim are India and China. Cadim is basically a pension fund and there are many challenges that are faced by such pension funds when they look out to invest in the emerging markets of the world.

The first significant challenge that is normally faced by pension funds is planning for the due diligence. The whole due diligence process is a complex process and it is also based upon certain assumptions. For instance, the value of an investment in the emerging markets is estimated with the help of the financial models. These financial models are themselves based upon certain assumptions. These assumptions might not always prove to be correct resulting in inappropriate valuations of investments.

Therefore, the identification of the most certain and realistic assumptions is one of the significant factors. Secondly, finding an experienced investing partner along with the partnership for the investment could be formed. From the point of view of investment. Cadim could consider the real estate projects in India and China, because Atlantis, Forepeak Properties and Strong land have all approached Cadim with offers for investment in India and China.

Further, from a diversification point of view, if a single deal requires 25% of investment in one city then it is not ideal from a diversification point of view. Therefore in order to diversify, Cadim should consider to invest in different emerging countries to maximize the total portfolio return and minimize the risks faced from entering new emerging markets. Therefore, the assessment of the partners is also an important factor since the success of the deal and the returns generated for the managing partner all depend on both the partners.

The risk landscape proves to be complex specifically for the large international investments. Therefore, in order to control these risks and mitigate their emphasis a checklist for the assessment of the partner has been designed by Cadim to plan the whole due diligence process. It lists some of the most important factors for assessing the true worth of the partner. However, some of the important additions could also be made to the checklist.

For instance, the investment evaluations previously performed and the real outcome of this deals could be evaluated for the partner. Finally, the impact of project failure if in case it occurs on the partner’s goodwill as well as business should also be evaluated by Cadim.

QUESTION 2

Risk Metrics: What are the Key risks for India? What are the Key risks for China? How do you gauge risk when investing in these countries? How helpful are country risk assessment measures? What are the similarities and differences between investing in the two countries?

Both the counties India and China are experience fast economic growth and both the countries are considered as a representative of emerging countries of the world. The gross domestic product for both the economies has been growing at a rate of about 9.2% and 10.7% respectively which is a good percentage.

Running Head Cadim China & India Real Estate Deals Case Solution

The most common similarities between both the countries are that both of these countries are highly populated and the population within both the countries is accelerating at a very strong growth rate. Further, urbanization between both the countries is also increasing at a much higher rate and both the countries offer significant opportunities for many good real estate investment opportunities which could be considered as lucrative.

Further, if we talk about the differences between both the countries then there are also many significant differences between India and China. For instance, the local conditions and the culture of both the countries is completely different. Further, China has excelled in facilitation and liberalization investment as compared to India. Although a single party pattern for democracy is followed by China, but there are less obstacles and intervention from the government once the company obtains permission from the country government........................

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