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Shaky Global Economy Alters Investment Focus For Family Offices – Forbes

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The year 2019, a year filled with hot headlines such as heatwaves in a desert. The economic downturn and fear of recession were the top concerns amongst smart money and family offices. These concerns were on the back of the tumultuous trade war between the U.S. and China. This trade war kept the global central banks on their toes and they took a weapon of mass protection out, once again—the dovish monetary policy. 

This monetary policy drove bond yields to the ground, the Treasury yields in the U.S. touched levels that haven’t been witnessed in decades. The feeble global growth and lower bond yields have shifted the investment focus among family offices and High Net Worth (HNW) individuals. They struggled to find bonds with positive yields and the scarcity of these assets altered their investment strategy. They have started to favour “impact investing”.  

At its core, impact investing combines financial returns with social impact or a friendly environmental outcome. Since 2018, this term has been more of a buzz word. However, this niche investment attracted the attention of the new European Central Bank’s head, Christine Laggarde. The ECB’s new asset purchase program is going to include green funds—funds focused on investments that have a friendly environment outcome. 

Smart money and family offices have paid close attention to this trend and they believe it is likely that central banks may expand their umbrella of investment from green funds to other funds with a different social impact. They believe that impact investing will attract more capital flow into 2020. 

Sir Anthony Ritossa from the Ritossa Family Office who held the 10th family office event in Dubai said “family offices are deeply committed to supporting philanthropic causes where they can improve society. Impact and social responsibility are definitely at the top of our minds as we enter a new year with new opportunities to make a difference. Family offices have generated tremendous multi-generational wealth through the years by cherry-picking the best off-market co-investment deals.”  

Ahmad AR. BinDawood, CEO of Danube & BinDawood, BinDawood Family office said “for us, it is imperative that any investment we make has a social angle. Our current investment is having a positive impact on 10,000 households (employees) in Saudi Arabia and we are making sure that our employees have full educational support because we promote employees to top roles within our organisation.”

Other areas of considerable thought among family offices are megatrends. Saudi Arabia sits on top of this ladder. Since Crown Prince Mohammed bin Salman announced Vision 2030 in 2016, various economic and social reforms are geared to diversify the economy away from its traditional dependence on oil.  

The reason that family offices are interested in Saudi Arabia is that Vision 2030 aspires to grow household spending on entertainment to 6% by creating a SAR 30 billion market. Saudi Arabia has already eased off the process of tourist visas and this is the direct result of Vision 2030 which aims to develop more Saudi historical and heritage sites. The plan is to double the number of sites that are currently registered with UNESCO. This means a massive new infrastructure development to support tourism.

Ahmad’s family group, the BinDawood family office, is making an investment to support the tourism industry through its investment in hospitality in the Kingdom and as well as BinDawood Holding’s networks of supermarkets across the kingdom.

Mr. Ritossa said “global attention is on Saudi Arabia as a true powerhouse with tremendous future business potential. Aramco’s IPO’s massive valuation is indeed a big win for Saudi Arabia and further solidifies the region’s position as a strong and transformational economy. Also, we envision more major deals and IPOs in the coming year as the region continues to expand.” 

To conclude, the exuberant volatility and feeble global economic growth have altered the habits of family offices. Impact investment and megatrends are their focus. In my opinion, this investment strategy is going to become more famous in 2020. They see the European Central Bank’s involvement in the impact investment area as a positive sign. Finally, they are also ready to bet on the Saudi tourist and entertainment industry given the potential of Vision 2030 and the outcome of Aramco’s IPO. 

  

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The sale of MEC to a foreign investment firm feels like a betrayal – The Globe and Mail

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A MEC store is seen in Vancouver, B.C. on Sept. 15, 2020.

JONATHAN HAYWARD/The Canadian Press

Charlotte Gill is the author of Eating Dirt, a book about trees and tree-planting.

When I walked into Mountain Equipment Co-op for the first time, I’d just been hired as a tree-planter. I was still a teenager and owned little in the way of camping gear. The store was like a small island nation of outdoor enthusiasm. Crossing the threshold was, and still is, like entering a gearhead’s paradise in which every kayak paddle, stove part or topo map known to humanity was within reach. Its sales model was encyclopedic. They sold flashy new lines but also vintage fan favourites, plus all the parts required to repair those items. Each aisle represented an epic adventure waiting to unfold.

Ever since then, I’ve been a heavy MEC user and have amassed a basement full of outdoor equipment, much of it acquired there, some of it still going strong after 30 years of abuse. I’m one of the many customers who still has a square of laminated cardboard, a first membership at “The Co-op,” as it’s still often called, no further modifiers necessary. That membership kept me company through many years of planting trees and through all my travels around the world. The Vancouver store has provisioned me with trail running shoes, ski gloves, sleeping bags, hydration bladders, energy gels, bike pedals, sporks, carry-on bags and multiday backpacks. It’s kept me covered through tears and sweat and shivers, through half a dozen sporting pursuits I never thought I’d even try let alone fall in love with. To me, and to legions of devoted fans, the sale of MEC to an American investment company isn’t just another sign of the retail apocalypse. It’s something like a betrayal.

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MEC was originally the brainchild of six Vancouver mountaineers who started in the 1970s making small, cross-border runs to outdoor equipment retailer REI, whose co-operative structure MEC shares. Gear was bought and sold out of the back of a powder-blue VW van, a replica of which is housed inside the new flagship megastore in Vancouver’s Olympic Village. The first catalogue was a one-page list taped to the door of the Student Union Building at the University of British Columbia, and through its early iterations, the store was run by volunteers.

By the time I discovered MEC 20 years later, it had built a solid trade catering to dirtbag climbers but also to birdwatchers and first-time hikers as well as professional bike couriers and tree-planters like me, all of whom shared an urgent need for comfortable, tough, relatively well-priced equipment. Sales staff knew every product’s precise location, constituent materials and field performance because they’d used it all themselves, often thrashing it to tatters, just as their customers did with repeated use.

The resulting community was a multigenerational, interdisciplinary and remarkably tolerant mixture of experts and beginners, old-school hippies, mountaineers, families and urban weekend warriors. The co-op understood its own history and mandate because its shareholders were also its customers. MEC cared about the environment, and conducted its business accordingly, because its members cared.

Over the years, MEC has donated $44-million to community and conservation groups. Through its endowment fund it has supported the acquisition and preservation of many parks and protected areas. MEC is a founding partner or member of organizations such as Leave No Trace Canada and 1% for the Planet. The co-op has hosted countless races, rides, clinics, meet-ups, gear swaps and outdoor learning programs. Even its warrantied product returns are given to charity.

But MEC seemed to drift from this grassroots ethic over time, a development not lost on its loyal clientele. The co-op faced new competition from online retailers and knock-off brands, some of whom opened their doors just a short jog away. A long reach into streetwear and athleisure markets accompanied several bricks-and-mortar expansions. Enter a new chief executive with big-box credentials.

All of this felt like bloat if not a straying from core values, which also faced scrutiny for their seemingly myopic focus on a white, cis-gendered, thin and able-bodied membership, an oversight that management only began to address very recently. A final irony, the pandemic that brought record numbers of Canadians into the great outdoors this summer was also the force that hastened the demise of the co-op that had equipped them in the first place.

When the sale was announced on Monday, the outcry was swift and passionate. MEC’s five million-plus members were never consulted about the takeover or granted a chance to vote or otherwise rescue their beloved co-operative from $74-million in liabilities. No one agreed to donate their $5 membership shares, nor to give away their consumer data to a foreign-owned private equity firm. At the time of this writing, a petition to block the privatization had reached more than 73,600 signatures.

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Short of a miracle or a successful class action, Kingswood Capital Management will soon own the MEC brand, with “Co-op” removed from its name. This may not be the last stand for the iconic green logo, but it still feels like the beginning of the end for a community institution, a heartbreaking close for the people’s outdoor store.

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Alberta outlines government-wide strategy for attracting new investment to province – Shoreline Beacon

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The program is not just aimed at Alberta’s traditional sectors such as agriculture and energy, but also technology, aviation and other sectors

‘Investment and Growth Strategy’ is a $75-million program aimed at bringing investment and creating jobs.

RANDY VANDERVEEN

EDMONTON — Alberta is promising a government-wide strategy to attract investment to the province, and sector-specific investments to help the economy recover as Canada emerges from the COVID-19 pandemic.

“We have to be able to keep up with a very fast economy that is ever-changing,” said Doug Schweitzer, the minister of jobs, economy and innovation, in an interview with the National Post on Thursday. “We have to make sure that we’re there to complement and keep up with the speed of the private sector.”

On Thursday, Schweitzer announced the “Investment and Growth Strategy,” a $75-million program aimed at bringing new investment, creating a diversified economy and stimulating jobs. The program is not just aimed at Alberta’s traditional sectors such as agriculture and energy, but also technology, aviation, financial services and other fast-growing sectors.

“This is the beginning of a whole bunch of other announcements,” said Schweitzer.

Alberta, even before the COVID-19 pandemic, was floundering under the pressures of decreasing oil prices and challenges transporting the province’s main export because of the lack of pipeline capacity. Billions of dollars in investment have left the province in recent years, and Jason Kenney’s United Conservatives were elected on promises to turn the economy around.

Since the pandemic started, things have gotten worse.

Alberta sits at 12 per cent unemployment, and there have been staggering drops in economic activity that are putting pressure on government budgets. Last month’s fiscal update showed an $11.5 billion decrease in revenue flowing into government coffers, attributable mainly to the effects of the pandemic.

The investment strategy aims to sell Alberta abroad, pitching it as an attractive jurisdiction for companies, with low taxes and spending on infrastructure.

“We are showing the world that Alberta’s entrepreneurial spirit will endure with determination and confidence,” says a document outlining the strategy.

Rachel Notley, the leader of the Alberta New Democrats, asked about the investment plan at an unrelated press conference, said the government should restore diversification programs brought in under the NDP.

“The plan they talk about is really, it’s a plan to make a plan, to someday have a plan to incent diversification,” she said. “We do not need to be wasting time with these non-announcements.”

The strategy encompasses many of the things the government has already done during its time in its time in power, including dropping the corporate tax to eight per cent on July 1 — a year and a half ahead of schedule — and creating a new investment corporation to seek out money abroad.


A pumpjack near Acme, northeast of Calgary.

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It also highlights Alberta’s workforce, one of the youngest in the country, with a median age of 36.9 years, and with 71 per cent of those over the age of 25 having some form of post-secondary education.

“Coming into this pandemic, it’s forced us in Alberta to rethink how we move forward,” said Schweitzer.

In July, the United Conservative government outlined a new Crown corporation to attract investment, citing aggressive competition for new investment as justification for the organization. The $6 million annually for Invest Alberta is part of the $75 million for the innovation plan.

“We did launch that earlier on as a concept,” Schweitzer said. “Now it’s being refined and turned into action on our end.”

The province has promised several measures, such as aligning the investment strategies of Alberta’s international offices, more proactively going after potential investors, and offering “concierge” service for those who decide to spend in Alberta.

Schweitzer said there will be sector-specific announcements in the coming weeks covering multiple sectors of the economy.

This includes reform of intellectual property laws, a key portion of Thursday’s announcement, so that ideas and research can be turned into businesses and jobs. Reform will include consultation with the technology sector.

“We’re not going to have all the answers today … but we’re going to set and put a marker in the ground that we’re going to do this faster than all the other jurisdictions in Canada right now that are looking at the exact same issue,” said Schweitzer. “Game on, we’re making sure Alberta’s here to play.”

Trevor Tombe, a University of Calgary economist, said “the devil is always in the details when a government says it is pursuing ‘diversification’ strategies.”

• Email: tdawson@postmedia.com | Twitter:

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Kitchener start-up draws $70M in new round of investment – KitchenerToday.com

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Kitchener-based ApplyBoard says it has raised another $70 million in a new round of investment.

The new money brings the balooning tech start-up to $170 million raised in its Series C investment, saying this new funding is part of a Series C extension.

ApplyBoard offers a school-application platform geared toward international students.

The company employes a team of more than 500 across 20 countries.

In a release, ApplyBoard says the new funding will be spent “developing its school and student services, expanding its destination markets, and serving a broder diversity of students and recruitment partners globally.”

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