Africa has extensive mineral and natural resources. The continent makes up 20% of the world’s land mass and has 89% of the world’s platinum, 12% of its proven oil reserves and 9% of its natural gas. In addition, Africa has a young, growing population of around one billion people. Of the top 10 fastest-growing economies in the world, 6 are in Africa. However, most international businesses are still not very aware of Africa’s investment opportunities.
Rani Jarkas, a global well-known entrepreneur and a recognized leader in the finance industry shares his views on Africa with us, “Forward-looking investors should invest in Africa for its substantial long-term growth potential. Particularly I believe immense investment opportunities could be found in banking and finance, energy and infrastructure and agriculture.”
“The returns in Europe and North America have been low so the only place where you get good higher returns could be Africa. My intention is to provide better understanding how growth opportunities vary across the diverse continent as well as bringing value to local investors and offering my clients access to investment opportunities that capitalize on the rapid growth in the dynamic Asia and Africa and act as a bridge to fill the regional gaps,” added Rani Jarkas.
Rani Jarkas, a global well-known entrepreneur and industry-recognized leader who has years of experience in conducting business in Africa in the field of asset management and financial advisory services, was invited to co-sponsor the Africa Day 2013 – Business and Tourism Forum and the corresponding Gala Cocktail Event in Hong Kong on 20th May 2013 and 22nd May 2013 respectively. The two events were hosted by the African group of Consulates-General and Honorary Consuls in the Hong Kong Special Administrative Region (HKSAR) to celebrate the Golden Jubilee 50th Anniversary of the African Union.
The objective of the events was to promote the investment climate, exciting projects and tourism in Africa to global investors and business people alike. The events were attended by dignitaries, government delegates, distinguished African company executives and preeminent investors. The guest of honor at the gala cocktail was Mr. Gregory So Kam-leung, GBS, JP, Secretary for Commerce and Economic Development, Government of the HKSAR, who delivered a keynote speech.
Sponsorship of events like these exemplifies Rani Jarkas’ on-going commitment to facilitating business and capital flows to emerging markets, including the world’s two fastest-growing continents, Africa and Asia, specially the Greater China region. Rani’s approach is always based on a win-win strategy for investors worldwide in conjunction with local people and companies in each region. Rani is aware that, in Africa, creating job opportunities, enhancing efficiency and building wealth for locals are highly sought-after outcomes and important elements in defining a ‘win’.
Rani Jarkas said, “We look forward to establishing trusted partnerships with local governments and companies in Africa. As direct investors ourselves and advisors to tier-one investors around the globe, we also look forward to exploring a wide range of investment opportunities in Africa, particularly those in our areas of expertise, which include technology, natural resources, energy and clean technology.”
Rani Jarkas is an effective and reliable executive with abilities of overcoming complex business challenges and making high-stakes decisions using experience-backed judgment, strong work ethic and irreproachable integrity with over 20 years of financial service industry experience. “In my opinion, going to a bulge bracket firm is just not the ideal and most effective option for everyone. When you read the story below, you might find the answer,” said Rani Jarkas.
A famous engineer was called to look at a malfunctioning piece of manufacturing machinery. One fourth of a city block in size and completely encased in a shell of concrete, repair of the machine would require breaking through the barrier wall – a correct diagnosis was imperative before work could begin. The engineer set his price for coming to look at the machine at $100,000. The owner of the plant thought that a very high price, but the machinery was vital to his operation and this man was reputedly the very best available, so he agreed to the terms. Having arrived, the engineer walked slowly around the encasement, listening carefully to the workings of the machine inside. At long last, still listening carefully, he took a red Sharpie out of his pocket and drew a small X on the wall. “Tell your mechanic that this is where the problem is”, he said to the plant owner. “What is this?” screamed the owner, “I paid you $100,000 for you to draw an X on the wall?” “No”, said the engineer. “You paid me $100,000 for knowing where to draw it”.
Rules are presumably put in place to protect the investor, but as always, it is the unintended consequences that are the ones that you need to watch out for.
When uncontrollable events take place that cause specific market sectors to fall, whether caused by market failures, acts of God or some other intervention, a well-intentioned money manager has to have the liberty to move assets to those areas that are on the way up, or at least get out of the way of the ones that are falling. Many people lost their pensions and other savings and investments during the 2008 crash due to restrictions to do just this.
One safe haven that was not open to many money managers in the last financial crisis was the option of moving to cash. The stigma of moving assets to cash is based on urban myth, propagated by institutions that have insisted that investors entrust their money to those who were going to actually invest it – any lay person could hold cash! But this is faulty logic. Investors are entrusting their savings to experts who know where to draw the X on the wall. Investors want money managers who know when cash is king and when and what to buy and sell.
Knowledgeable investors have been frustrated by limited alternatives available in the market and passive investors are unaware of the conundrum that exists.
Investors today are looking for independence. They want to employ money managers who have the freedom to make investment choices that are focused on long-term growth and the preservation of wealth, regardless of geographic boundaries, industry segments or asset type. Investors are looking for fund managers who use a variety of research sources to gain their information – without solely relying on a centralized internal research department that provides all company fund managers with the same information, commonly resulting in collective buying and selling and potentially impacting price and performance execution. Investors are also concerned about the bottom line – how the fund actually performs in terms of real gains or losses, not how it performs against a benchmark. Beating a benchmark by 5% is great, unless of course the index was down 50% itself. And finally, over-dependence on fundamental analysis and portfolio size could mean a delay in decision-making to avoid or cut losses or holding on to falling assets for fear of missing out on the chance of a return rally. Investors want money managers who are focused on protecting and growing capital – managers who know precisely where to mark that X on the wall.
Some say that globalization has ‘shrunk’ the world. From Rani’s perspective, the world is still a pretty big and diverse place and there are opportunities everywhere – even when the mainstream media depicts a direr story. From this viewpoint, it made good sense to develop efficient products with built-in resilience to economic environments and market conditions without limitations to specific sectors or geographical focus.
The rise of the independent boutique firm is testament to these ideas – knowing where to draw the X on the wall — by developing and using creative products based on solid constructs, exploring markets and opportunities all around the world and appropriate discretionary investing suitable to an investor’s risk/return tolerance.