structuring for growth

A good portion of my funds invested are from borrowings. Hence I am fairly ruthless when it comes to evaluating both a stock's current performance and it's future potential. Doesn't mean I'm always right, as I'm sure some here won't like my current portfolio.

CIY is a stock that stands out to me as being intelligently managed. Why? The key business is taking investors funds and lending them out to make a smallish margin and good fee income. With over $700 million of funds under management growing at $30 million per month, however, I could imagine that maximising borrowed funds is something that needs a lot of attention. This will particularly be the case in 12 months when a lot of the current borrowings will be repaid meaning both fund inflow and "old" money will need to be lent.

It is clear that CIY is developing strategic relationships, and equity partnerships, that will provide a channel for a large part of these funds. CIY holds over 50% of the list CP1 Limited (CPK), a listed development company. As per CIYs recent announcement another development vehicle is being listed called Indigo Pacific Ltd of which CIY will own 25%, and Indigo Group another 25% (apparently Indigo Group is a large development company in Qld).

In short, they are building a platform that is ready and waiting to receive funds from CIY. There will be a known base of projects taking some of the uncertainty out of the game.

To me this is a sound strategy. Any thoughts appreciated.

MJS