September 19th, 2012
Some of the best opportunities in global value investing today are in highly inefficient and largely undermined special situations – such as in the surging natural resource deals between China and Latin America.
Erik Bethel, founder of SinoLatin Capital, got there first. He was arguably the first investor out of China to be on the ground in force in Latin America – just as the resource deal boom took off. While most China-based investors are now going to Brazil for the first time, he and his team have been flying past Brazil and hunting for deals in Paraguay, Guyana and other frontier markets.
We spoke with Erik about his investment strategies and what catches his attention in emerging markets.
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August 28th, 2012
South Korea is one of those economies that global value investors pay attention to. It is export-driven. It is relatively small. And it sits adjacent to emerging market behemoth China. The entire economy could almost be considered a cross-border special situation. In this, it has a lot of inefficiencies that global value investors hunt for.
This month we spoke with Chan Lee and Albert Yong at Petra Capital Management, an investment advisory and portfolio management firm based in Seoul, South Korea. Petra focuses on undervalued Korean public companies whose market prices are significantly discounted to their intrinsic value. Since inception, Petra’s investment portfolio has returned 27.2% annualized, net of all fees to investors. We spoke with them about CJO Home Shopping and its joint venture with Shanghai Media Group (continued here)
August 28th, 2012
The Middle East is an unusual emerging market. It attracts investors with its oil wealth (+40% of the world’s proven oil reserves). Its consumer and competitive dynamics are fairly stable and predictable. And it has a +70-year history of successful deals with Western partners. All of these things make it particularly attractive and manageable for global value players.
But the number of companies in the region – and deals – is quite small. Especially when compared with the large amount of local capital. So stocks and public bids attract too much money. And attractive private deals are hard to access. Typically, the biggest challenges for the MENA investor are deal access and valuation.
With this in mind, we spoke with Fadi Arbid, the CEO of Riyadh-based Amwal Al Khaleej, one of the Middle East’s first private equity firms. Launched in 2004, Amwal has delivered one of its most successful PE track records. We discussed with Fadi how the financial crisis has impacted the region and where the opportunities are likely to be in the next several years. (continued here)
March 2nd, 2011
This is going to be a big week in Saudi Arabia and, as someone who has developed +$10B of high profile projects in that country, I have been getting asked about it. So a few thoughts.
First, there were uprisings in Tunisia, Egypt, and Bahrain. Then violence in Libya. And now there have been calls for a March 11 “Day of Rage” in Saudi Arabia. In response to all of this, King Abdullah has returned to Saudi from his post-surgery recuperation – and he has quickly released a +$35 billion package of reforms. All eyes are turning to Saudi Arabia and it is going to be a fairly tense week in the world’s other magic Kingdom.
Read The Rest →
February 25th, 2011
My home is in New York and Shanghai. My office is mostly in the Middle East. I teach in Beijing and Cambridge. And I am quite possibly a genius at manipulating flight schedules to ensure regular stop-overs in fun places such as Nice, Paris and Hong Kong.
Global value investing has fully arrived and many of us are now living fully global lives. And it’s fantastic. Really, really fantastic.
Read The Rest →
February 8th, 2011
Yes it can. Egypt is located 30 minutes from 60% of the world’s oil and 45% of its natural gas. It sits in a sea of investment capital that could rapidly transform it, like Dubai, into a modern economy (hopefully with a little less speculation). But whether Egypt becomes the next Dubai or the next Yemen, will depend almost entirely on the major GCC investors.
It is the Waleeds and Olayans of Saudi Arabia and the Mubadalas and Emaars of the UAE that are the capitalist engine of the Middle East. It was the GCC investors and entrepreneurs that fueled Dubai’s rise in logistics, real estate and banking; moved Saudi Arabia and Qatar downstream into energy-intensives; and brought Egypt’s pop stars to the Arab world. They are the prime movers of the region’s private sector.
I spent much of the last ten years working for Prince Waleed, the most prominent of the GCC investors. Based in Riyadh, I worked on his one mile skyscraper, his housing development the size of Manhattan, his internet companies, his banks, his hospitals, his schools, his Four Seasons Hotels, his Saks Fifth Avenue stores and so on. The projects in the Middle East eventually exceeded twenty billion dollars – but I never once considered Egypt.
For thirty years, the major GCC investors have avoided Egypt and its sclerotic politico-economic environment.
Egypt under Mubarak has been a story of the repression of political but also economic liberty. A story of centralized political power leading to highly concentrated economic opportunity. As a result, the economic state of Egypt today is completely unsurprising – a few powerful individuals controlling most of a stagnant economy and the bulk of the population living off the scraps. This is not an environment in which major investors will bet their fortunes and futures. But that may be changing at the current time.
The political upheaval in Egypt has focused most attention on democratic vs. autocratic questions. But the primary factor for Egypt’s future – and the critical challenge for virtually every Middle Eastern government today – is economic freedom and the creation of a more dynamic private sector. Absent a diversification of the economy away from a few government-driven industries, Egypt’s political future, regardless of form, will be one of continued economic stagnation and exclusion. And this brings us back to the GCC investors as the ultimate deciders of Egypt’s fate.
The good news is that GCC investors could easily move tens of billions of dollars into a new Egypt in the next several years – as well as the brain power required to turn it into successful private enterprises. They view Egypt as their home market and they are comfortable with limited press and rule-of-law environments, in a way European and American investors are not. Additionally, Dubai’s hyperactive bankers and lawyers now enable capital to move quite freely within the region (perhaps too freely) so structuring the investments is relatively easy. Even Egypt’s decayed infrastructure is not that much of a deterrent. GCC investors are equally good at building shopping centers and water treatment facilities (the GCC is the project finance capital of the world). They could start deploying very large capital into Egypt this year.
The bad news is that Egypt does have three serious hindrances to attracting GCC investment and resuscitating its private sector: perceived instability, limited private property rights, and a “3 c’s” government (chaotic, corrupt, and crony). These are all deal-breakers for attracting large GCC dollars and unfortunately, these are deeply entrenched problems that Egypt can only solve over time.
The way around this is to copy Dubai. Launch special economic zones that sit outside the entrenched politico-bureaucratic system. Copy the Jebel Ali Free Zone and specific developments such as Dubai Internet City and Dubai Media City in which foreign investors have clear property rights and favorable government policies. These zones also place foreign businesses and their capital beyond the reach of government officials, which is critical.
A Dubai-type approach makes intuitive sense for Egypt:
First, large investment dollars could begin to enter the country almost immediately. There is a significant construction and fixed assets component to this approach so much of the investment happens in year one.
Second, Middle Eastern investors are generally crazy about real estate. If they will build an underwater hotel in Dubai and buy every third building in Knightsbridge, they will build resorts in Sharm El Sheikh, revitalize a Cairo district or design a new sunny suburb outside of Alexandria.
Third, high profile GCC investors can easily be brought in to lead these types of self-contained projects. The involvement of a reputable lead investor like Waleed would have a dramatic impact on the comfort level of every other GCC investor.
There is no reason why Egypt cannot follow Dubai on a rising economic path. Political freedom is still an unknown in the Middle East, but the roadmap to economic freedom is proven and can be copied. Remove the current deal-breakers, bring in a few high profile GCC investors and then focus on incremental, but gradually increasing successes. Successful private sector projects will quickly create confidence and naturally open the doors to the region’s vast sea of petrodollars. That’s how a new Egypt becomes Dubai and not another Yemen.
Jeffrey Towson is the former Head of Direct Investments for MENA and Asia Pacific for Prince Waleed, and is the author of the forthcoming global investing book from FT Press: What Would Ben Graham Do Now? (May 2011)
January 30th, 2011
菲特早已经开始认真
思考中国了，当史上最好的投资者在脑袋里思索着你的领域时，你应该引起重视了。
巴菲特最近和比尔·盖茨一起来中国，虽是为了宣扬慈善的目的，但可以肯定的是，在这次引人瞩目的旅行中，他大脑中分管投资的那一块从没休息过。他在思考如何投资中国，没错。
他近期放出话来：“中国是个发展中的、令人艳羡的经济体。”2008年投资深圳比亚迪，正是他投资中国的引人注目的一笔。
他手上的股份市值在24个月中，从最初的2.3亿美元增长了6倍。之前，他还向中石油投了4.8亿，目前市值增长到40亿美元。他横跨半个地球做的这些成功投资，让我感到很震撼。
不过无论如何，谢天谢地，巴菲特向我们这些在中国的外国投资者上了重要一课。
第一课 ：到处都有“便宜货”
比亚迪和中石油都是价值投资的良好标的。当巴菲特判断公司的价格低于它的真正价值时，他就出手了。他估计中石油值1000亿，但当时只卖370亿，他就买了一大笔。比亚迪也是如此。他把中国看成一个经常会冒出“便宜货”的地方。
第二课： 新市场和新产品的确很好，但不是投资的理由
我相信巴菲特投资比亚迪的行动被很多人误解了。人们误以为他投了一家生产电动汽车的企业，是奔着新技术和新产品去的，是想要开拓新能源市场（就像在美国一样）。但巴菲特并非投资新技术，他对新产品以及技术成长的关注度很有限，对受到技术变革影响的企业也是如此。因为在他看来，这些都太过投机了！
他只买不受竞争者威胁、且商业模式简单的公司。
他其他的投资标的，包括可口可乐、Geico保险、家具店、铁路等，所有这些都是商业模式比较简单的公司：发展很稳定，不受竞争者威胁。这里面没有一家是类似电动汽车企业的。
我想，巴菲特是把比亚迪当做一家电池生产企业来投资的，而不是一家电动汽车企业。比亚迪的核心业务链，是生产用于手机和其他电子设备的电池——商业模式其实很简单。
电池很容易理解。在电池领域，比亚迪不受竞争者的威胁，因为其规模庞大。我认为，巴菲特只是投资了一家稳定的电池生产企业而已，如果它也同时生产电动汽车，那只是额外的好处。
第三课： 好的管理是必需的，但还不够
巴菲特赞扬了比亚迪和中石油的管理层。对于中石油，他评价管理层“在建立石油和天然气储备方面做得很出色”。对于比亚迪，他公开赞扬过总裁王传福的热情和创业动力。他曾想购买该公司25%的股权，但王传福只同意出让10%。巴菲特说，“这个男人不愿意出售自己的公司。”
不过，虽然巴菲特声称“诚实而有奉献精神的管理层很重要”，但我认为还不够。
他曾说过，他买的企业都是好到白痴也能经营的，“任何一个人早晚都能上手”。管理很重要，但还不够。他要投资的，必须是一家很优异的企业，同时又有非常优秀的管理层。
第四课 ：如果你不是巴菲特，其实到处都有投资机会
中国到处都有好的企业。我们没有巴菲特的弱点——他的投资太大了。他要找一家能投资5亿以上的公司，这样的公司并不多。如果你的投资较小，其实到处都是好的公司。比如说，今年深圳的中小板就有100多家比较优秀的公司上市。
January 30th, 2011
Reprinted from Cai Fu Tang December 1, 2010
I teach investment classes at Peking University in Beijing and Cambridge University in the UK, and I like to start the classes with a quick quiz on famous investors. Without fail, executives and MBA students from China always know the strategies of Warren Buffett and George Soros – and a few can even identify Buffett’s teacher Ben Graham by his photo alone (something few Americans can do). But I find there is always one investor that seems to be completely unknown in China, global real estate guru Tom Barrack.
Los Angeles-based Tom Barrack is arguably the world’s greatest real estate investor. And given Chinese investors’ obsession with real estate, it’s a little surprising he is not widely studied here (although I suspect he is studied in Wenzhou). In Asia, he is best known as the man who bought spent nine years convincing the Singapore government to sell him the Raffles hotel chain for $1b. In Japan he is known as the man who bought the Fukuoka Dome, Japan’s major stadium. And globally he is known as the man who bought Michael Jackson’s house.
Since its’ founding in 1991, his private investment firm, Colony Capital, has invested over $45 billion in over 12,000 assets worldwide. Besides being big, Colony is generally regarded as one of the smartest private equity firms focused solely on real estate. It’s the kind of firm that other good investors listen to.
Barrack’s philosophy is similar to Warren Buffett’s. He is mostly hunting for value that others don’t see. His purchase of the Japanese stadium was based on a calculation that the titanium in the roof was worth more than the selling price. His strategy is about getting a cheap entry price (relative to value) on a handful of investments, not moving lots of money and taking a yield.
He avoids the crowds and goes where most others aren’t looking. He hunts around the world for deals nobody else is seeing. He purchased 55% of Mars Entertainment, the leading movie theater chain in Turkey. He purchased 10% of Megaworld Corporation, a development company based in Manila. He has even purchased private hospitals in Switzerland and pub companies in the UK. His 2005 announcement that he was exiting the US real estate market due to too much capital chasing real estate appears, in retrospect, exceptionally smart.
If “buy it cheap” is strategy #1, “buy it cheap and fix it up” is #2. Everyone who has ever bought a house, fixed it up and sold it knows this strategy. And if you operate across industry classes (hotels, resorts, casinos, apartments, etc.), there is a lot of room for such creativity. He buys old famous hotels, including the Savoy in London, and refurbishes them. He has developed luxury resorts in emerging markets. He has bought hotels or residential complexes and turned part of them into service apartments. He has bought casinos and fixed their management.
I started following his deals about 8 years ago due to his work with my boss at the time, Prince Waleed. They had partnered on quite a few famous investments, most recently the merger of Fairmont and Raffles to create a $5.5 billion luxury hotel chain. This was another example Barrack’s “buy it and fix it up”, but through mergers.
Although what really caught my attention about Tom Barrack was his crazy global lifestyle. He travels almost continually, often in a different a city or country every three days. He lives between Asia, Europe and the US. He is comfortable doing investments everywhere in the world. This sort of global strategy and lifestyle struck as the right approach and level of ambition for a global age. I have built my own lifestyle in similar global fashion; living in New York and Shanghai, investing globally and teaching in Beijing and Cambridge.
However, Tom Barrack’s most important lesson for rising Chinese investors might be ambition. He has left a clear roadmap for how one ambitious person in one lifetime can build their own global empire.
October 10th, 2010
Dubai, which has long drafted Singapore, should note Singapore’s recent launch of the Marina Bay Sands casino. It’s an important lesson in how a city-state can build family-friendly casinos and jump start tourism.
Singapore’s recent opening of the Marina Bay Sands appears to be a glowing success. The $5.5 billion resort has logged approximately 5 million visits since its opening in April 2010. And even this is while it is still in a state of partial, phased opening. According to a recent Wall Street Journal article, they are expecting over 70,000 visitors per day when it is fully completed by the end of the year.
But Singapore’s entrance into the casino business was after a long and agonizing decision by the government. There were concerns that gaming would invite crime. That it would be incompatible with the family-friendly environment of the city and the local sensibilities. That it would change the reputation of the city. They did not want clean, law-and-order, family friendly Singapore to become a casino town like Las Vegas or Macau. These are likely the same concerns that Singapore’s city-state cousin Dubai would have, given their cultural sensitivities.
But Singapore’s casino initiative has now proven four things that Dubai should seriously note:
Lesson #1: Casinos are not incompatible with law-and-order, clean, family-friendly cities. With the right government oversight, they can be introduced in a controlled and limited fashion. You can contain all the gambling within the casinos themselves. You can contain the casinos within specific real estate developments. And you can control entrance to the casinos through fees and other mechanisms.
And Dubai is already comfortable creating such controlled environments. They already limit alcohol, clubs and bars to within specific hotel resorts only. Note the Sands serves coffee and tea, not alcohol, in the casinos. In short, you can get all the benefits without the risks to the city’s reputation or sensibilities.
Lesson #2: The benefits are massive. The most powerful benefit is that gaming drives tourism, which happens to be Dubai’s lifeline. Casinos are a powerful mechanism to draw in tourism and it is a particularly stable type of tourism.
Attracting such inbound tourism has always been the strategic objective of Dubai and its industries; feeding the real estate, hotel and retail businesses of the city. But it has always been unstable, depending on warm weather or real estate purchases or retail shopping trips. Casinos create stable inbound tourism. Gaming has supported Las Vegas’ isolated existence in the desert for decades.
And you also get a multiplier effect as people already visiting stay longer on trips. It moves the destination beyond “stop-over” or “weekend-visit” status. So not only do you increase inbound tourism from Russia, Europe, and Middle East; but you also add extra days to all the existing tourism. Dubailand, the still developing theme park, was envisioned with just this objective of increasing the average length of stay.
Lesson #3: In Dubai such a tourism impact could be even larger than in Singapore. The US has Las Vegas. And China and Asia already have Macau. But Europe and the Middle East have no such gaming destination within easy flying distance. Certainly not one capable of combining gaming with mega-real estate and a scenic location. Dubai could be the family-friendly casino town for Europe.
Lesson #4: Casinos directly drive real estate, Dubai’s other growth engine. Dubai has already excelled at real estate but suffers from fluctuating foreign demand. Casinos could re-build and re-invigorate the real estate market likely faster than any other move Dubai could make at this point. Singapore is already reporting an increase in the residential, retail and office demand all around the bay where the Sands is located.
The long and the short is that Singapore has just shown Dubai, its long-time emulator, a potential silver bullet for its current situation. Since its collapse, Dubai has become a well-driven car with a great structure but without much of an engine. A family-friendly casino initiative could provide a powerful engine and could re-launch Dubai. It would be a similarly agonizing decision for Dubai but the lessons from Singapore are worth considering.
June 11th, 2010
如果说沃伦·巴菲特是世界上最出色的投资家，那么，尚能与其争锋者，非沙特王子阿尔瓦利德莫属了。在过去9个年头，作为王子身边的理财顾问，我也经历了一段别开生面的人生旅程。
我相信，阿尔瓦利德王子的经历一定会成为许多中国投资者的标本。上世纪80年代，他怀揣着仅有的3万美元，一头扎进商海。历经20年打拼，总资产攀升到惊 人的280亿美元。与此同时，他也从最初的那个第三世界国家投资者跃升为国际名流，跻身金字塔的顶端。自此，全球媒体开始关注起这位来自阿拉伯的“巴菲 特”。
然而，阿尔瓦利德王子的阿拉伯神话并未落幕。2004年，他被“福布斯财富榜”评为世界第四大富豪、美国最大的私人境外投资者。3年后，他重金入主花旗银 行，成为该行的首席股东。紧接着他更大肆收购传媒公司，成为仅次于默多克的世界第二大传媒大亨。基于这些传奇，甚至连巴菲特都谦虚地称自己为“美国的阿尔 瓦利德”。
阿尔瓦利德王子为人所津津乐道的投资项目，莫过于他在中国银行、花旗银行、时代华纳和苹果等高端企业上的“押宝”。去年春天，他联合世界首富比尔·盖茨， 耗资37亿美元收购了四季酒店集团。从此，酒店资产成为阿尔瓦利德的投资新宠，其名下包括Fairmont、Movenpick等300多家遍及全球的大 酒店。
他的投资几乎渗透到人类生活的各个层面，参股的公司还包括迪斯尼、eBay、princeline.com以及新闻集团。王子的投资狂热从未停歇，投资视 野开始聚焦于房地产市场，他旗下的房地产项目已是整个陆家嘴面积的三倍之大。现如今，他在吉达（Jeddah）建造的摩天大楼高达1500 米，是三幢环球金融中心的总和。
在乘私人波音747奔波于世界各地之余，王子总是在沙特首都利雅得（Riyadh）的办公室内专心工作。在保守的沙漠国度，王子的不动产事业重心——王国 中心，位于利雅得最繁华的大道上。这幢高达300米的摩天大楼已成为沙特首都的地标。有趣的是，作为大楼的主人，王子自己的办公室却只坐落于顶楼一间不起 眼的小房间。
他的办公室弥漫着战争般紧张的氛围，更是各国政商界名人们的必经之所。我在阿拉伯的8年时间里，早已熟识了与这些名人打交道的生活，英国前首相托尼·布莱尔、比尔·盖茨以及亨利·克拉文斯都是此处的常客。
多数时间里，阿尔瓦利德住在位于利雅得北部的行宫里，那儿坐落着他为子女建造的小宫殿，此地在Google地图上很容易查到。可是，每逢周末，王子却保持 着阿拉伯特有的风俗习惯：在广袤的大沙漠中安营扎寨。不过，那个足以容纳数百位客人的营地已经无法满足王子的胃口。于是，他正设法在沙漠的东部兴建一个 120英亩的新营地。
2008年，阿尔瓦利德的惊人之举又让他登上了世界各大报刊的头版，他买下了惟一一架“空客A380”作为自己的私人座驾，这座“飞行城堡”的高度令人咋 舌，相当于5层楼房。每年8月，阿尔瓦利德便开始其遍及10-15个国家的环球之旅。他还从詹姆斯·邦德电影《巡弋飞弹》中汲取灵感，定做了一艘282英 尺长的游艇。他喜欢同家人一起驾着游艇，沐浴在地中海的阳光里，完成一个月的轻松旅途。
对我而言，为王子理财的日子也是我人生中最华彩的篇章。这些年来，我如同一只候鸟，离开纽约的家，来到中东，并最终在上海定居。一路上，我自身的投资经验 也积累不少。最初，我只是负责打理一些建设医院和商场的小项目，时至今日，我已能够应对银行收购、兴建摩天大楼等大型投资项目了。
其实，在王子手下工作绝非易事，他拥有30多年的投资经验，熟悉各类商业投资信息。因此，他手下的经理人必须具备超强的分析和表达能力。另外，他的肾上腺素非常旺盛，难以容忍任何人浪费时间。
我至今还记得第一次向王子陈述简报的“窘境”。2001年6月，我被规定在3分钟时间里向他报告一个有关问题医院的调查分析——我将80页的内容浓缩到三 四页。我汇报完之后，阿尔瓦利德却自顾自地把头转向另一边，一脸凝重地盯着电视机。我一个人呆坐在一边，茫然不知所措。
阿尔瓦利德的办公室里极具个性地安装了6台电视机。在他办公桌的左手边，紧挨着正在处理的日常文书，堆着一大摞报告书；他面前的好几部电话，不时会同时响 起。在他办公室待过的人都知道，他的注意力无时无刻不在各种事情间来回切换，行政人员一刻不停地进出他的办公室，为他端上刚煮好的茶，抑或呈上相关文件。
结果，他的眼神猛然间回到了我这边。让我措手不及的是，他将我之前呈交的报告书递还给我，上面满是他用绿色墨水勾画出来的横线和圈圈。随后，他便像打枪一 样抛出了一连串问题：整个项目需要多少现金？在市场上的比重如何？具体的操作性怎样？他的问题总是鞭辟入里的，并且，任何没有实际意义的回答都会被他无情 打断。10分钟后，我们的会议告一段落，另一小组人马立刻鱼贯而入。跟随在他身边的8年里，我已经熟悉了这种机关枪式的提问方式，而3分钟陈述时间，已经 是他所能给你的极限了。
对于中国的投资者而言，阿尔瓦利德王子的财富人生无疑是最具说服力的。相比巴菲特、索罗斯等世界顶级投资家，他是惟一一个从发展中国家走出来的成功者。他实现了许多中国人梦寐以求的财富梦想——白手起家、本土崛起、海外壮大，最终成就了国际巨头的地位。
（作者为知名投资人，本文专供财富堂，由袁晨雨、任蕙兰编译）
