The financial projections section of an investment group business plan is based on a number of unique factors. Among these include the compensation of the
analyst team, the fund fee structure, and the amount of capital under management. It can be challenging to determine exactly how much capital will be committed over time, so we suggest preparing a scenario analysis to provide information
about the prospective profits under various conditions given the investment group performance. The most effective method of preparing the financial projections for the investment group is to base them on the historical performance
of the company. If this information lacks anything, form reasonable assumptions about the assets under management and forecasted returns. Be careful to provide a spectrum here and communicate that any returns are contingent upon a
number of factors outside the company’s control. Unlike a very standard company, such as a laundromat or trucking business, it is not always possible to form assumptions based on comparable companies at the startup phase. However,
remaining versatile and providing a spectrum of scenarios will provide a reasonable basis to project returns and identify key risk areas both internally and for investors.