Last week, on Thursday, February 15, the Ethiopian Government&#8217;s investment arm, <a href="https://eih.et/" target="_blank" rel="noreferrer noopener">Ethiopian Investment Holdings</a> (EIH), signed a memorandum of understanding with Hong-Kong-based West Data Group&#8217;s Center Service PLC to commence mining bitcoin.



The partnership is under a general agreement for a groundbreaking $250 million data mining project &#8220;that is dedicated to establishing cutting-edge infrastructure for data mining and artificial intelligence training operations in Ethiopia,&#8221; according to the EIH. Ethiopia is positioning itself as a leader in the data centre space in Africa, which is estimated to grow to $5.4 billion by 2027, according to Aritzon Advisory and Intelligence.



As noted by Kal Kassa, CEO for Ethiopia at&nbsp;<a href="https://www.hashlabsmining.io/" target="_blank" rel="noreferrer noopener">Hashlabs Mining</a>, “the development is part of the Ethiopian Government&#8217;s aim to drive economic growth by leveraging technology and energy sources to attract foreign investments.”



The EIH has yet to confirm the details of its bitcoin mining operations or respond to requests for comment by other publications. Nevertheless, as the project matures, we can expect to get more clarity from them on the particulars of the arrangement.



<h2 class="wp-block-heading" id="h-bitcoin-mining-in-ethiopia">Bitcoin Mining In Ethiopia</h2>



Despite the ban on crypto trading in the country, 2022 saw the ratification of favorable data mining laws that permit &#8220;high-performance computing&#8221; and &#8220;data mining,&#8221; which is where bitcoin mining falls under. In the last two years, this has opened the floodgates to miners seeking its comparatively positive reception to bitcoin mining, coupled with its abundance of energy sources—chiefly hydro—to its optimal weather and cheap energy costs.



According to data from Bitcoin mining services company Luxor Technologies, in 2023, Ethiopia ranked fourth behind the USA, Hong Kong, and Asia as one of the top destinations for Bitcoin mining rigs. Russian bitcoin mining company Bitcluster has already built the first 120 MW bitcoin mining facility, and companies such as Hashlabs Mining have started building bitcoin mines in Ethiopia for their global clients.



In a few years, according to a forecast by a senior executive at Bitmain and reported by Bloomberg, Ethiopia&#8217;s energy potential could rival Texas&#8217;s generation capacity, which currently accounts for an astounding 28.5% of the US&#8217;s 40% global hash rate.



Nevertheless, bitcoin miners are cautious about the future of regulation in the country. As other regions have shown, bitcoin mining has no permanent regulatory cushion. It is also too early to predict whether Ethiopia will switch its stance on bitcoin mining as Iran and Kazakhstan did when it started competing with domestic energy demand.



Regardless, the government is keen on expanding its inflow of foreign currency to mitigate its economic challenges and views mining as a compelling investment opportunity to realise that goal.



<h2 class="wp-block-heading" id="h-the-future-of-nation-state-mining-in-africa">The Future Of Nation State Mining In Africa</h2>



With the energy infrastructure yet to match demand on the ground for electricity in several African countries, using bitcoin mining has continued to become an attractive avenue to bring electricity to millions.



In Ethiopia, for example, over 40% of its population, roughly 120 million people, are without electricity. Yet, the country has an installed capacity generation of over 5,000 MW and anticipates a projected additional install capacity generation of ~5,150 MW following the completion of the Grand Ethiopia Renaissance Dam (GERD), the largest hydroelectric project in Africa.



Following the examples of mining projects elsewhere in Africa, such as&nbsp;<a href="https://www.forbes.com/sites/abubakarnurkhalil/2023/05/24/africans-are-pioneering-the-bright-yet-complicated-green-future-of-bitcoin-mining/?sh=6d70d31654ac">Gridless</a>&nbsp;and&nbsp;<a href="https://www.forbes.com/sites/digital-assets/2023/11/20/nigerian-bitcoin-miner-trojan-mining-launch-500kw-hydro-mining-site/">Trojan Mining</a>, Ethiopia too can leverage its abundant excess green energy to provide electricity to its citizens via bitcoin mining. It can serve as a blueprint for other African countries with comparable energy sources to follow and navigate similar economic problems.



Further, the inclusion of bitcoin mining into the Ethiopian economy could contribute $2 &#8211; $4 billion to its GDP, according to data from&nbsp;<a href="https://projectmano.com/" target="_blank" rel="noreferrer noopener">Project Mano</a>, an open collective seeking to educate the government on the potential benefits of bitcoin to the country’s economy.



The economic benefits of Ethiopia strategically leveraging its abundant energy resources for Bitcoin mining are vast and far-reaching. It is only a matter of time before other African nations join the bandwagon.



Bitcoin mining will ultimately be a pivotal tool in addressing the economic challenges of various African countries.

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Ethiopia To Become The First African Country To Start Bitcoin Mining

Last year, PayPal&nbsp;<a href="https://www.forbes.com/companies/paypal" target="_blank" rel="noreferrer noopener">PYPL</a>&nbsp;<a href="https://www.forbes.com/companies/paypal">+0.6%</a>&nbsp;CEO Dan Schulman commissioned a study to understand how many of his employees were financially strapped. “I was almost positive the response would be, ‘No, we’re not, because you’re paying so well,’” Schulman said Wednesday at Forbes’ JUST 100 virtual summit. Internal research had shown that staff salaries were at or above market rates.



But the study’s results painted a different picture. “In all of our call centers and among our entry-level employees—more than 10,000 people inside of PayPal—two-thirds of that employee base struggled to make ends meet. That was such a huge wake-up call for me,” he said.&nbsp;



Hedge fund manager and philanthropist Paul Tudor Jones II spoke on the panel with Schulman and noted that, for every year he has done research for the&nbsp;<a href="https://www.forbes.com/just-companies/#11977d772bf0">JUST 100 list</a>&nbsp;of the most responsible public companies, “The number-one element of what makes a just company is pay and living wage.” The research polls thousands of Americans to identify what factors they deem most important in defining fair corporate behavior.



In October 2019, Schulman responded to the troubling survey results by lowering the cost of healthcare for employees by 60%. He gave every worker equity in PayPal, raised salaries and rolled out a financial education program to encourage saving. The changes reportedly cost <a rel="noreferrer noopener" href="https://www.fastcompany.com/90490899/how-paypal-ceo-dan-schulman-is-leading-a-more-inclusive-way-forward" target="_blank">tens of millions</a> of dollars. 



ee if the changes had an impact. “Employees were four times more engaged, and three times less likely to leave the company,” Schulman said.



Higher morale creates a workforce that serves customers better and leads to better shareholder returns, the CEO believes. His company’s stock has risen nearly 90% this year, reaching a market value of $235 billion. “This idea that making a profit and having a purpose as a company are at odds with each other is fundamentally wrong. I actually think if you don&#8217;t have a purpose as a company, you don’t see your workers as your most valuable asset and you minimize your profitability.”



-By Jeff Kauflin, Forbes Staff

Fast Company Innovation Festival – Day 3

PayPal CEO Dan Schulman Explains His Strategy For Investing In Employees’ Financial Health

Millions of cryptocurrency investors&nbsp;have been scammed out of massive sums of real money. In 2018, losses from cryptocurrency-related crimes amounted to&nbsp;US$1.7 billion. The criminals use both old-fashioned and new-technology tactics to swindle their marks in schemes based on digital currencies exchanged through online databases called blockchains.



From&nbsp;researching&nbsp;blockchain,&nbsp;cryptocurrency&nbsp;and&nbsp;cybercrime, I can see that some cryptocurrency fraudsters rely on&nbsp;tried-and-true Ponzi schemes&nbsp;that use income from new participants to pay out returns to earlier investors.



Others use&nbsp;<a href="https://www.buzzfeednews.com/article/ryanmac/cryptocurrency-scammers-are-running-wild-on-telegram">h</a>ighly automatized and sophisticated processes, including automated software that interacts with Telegram, an internet-based instant-messaging system popular among people interested in cryptocurrencies. Even when a cryptocurrency plan is legitimate, fraudsters can still&nbsp;manipulate its price in the marketplace.



An even more basic question arises, though: How are unsuspecting investors attracted to cryptocurrency frauds in the first place?



RELATED | <a href="https://www.forbesafrica.com/investment/2019/04/01/is-forex-a-scam-or-money-goals/">Is Forex A Scam Or Money Goals?</a>



<h4 class="wp-block-heading">Fast-talking swindlers</h4>



Some cryptocurrency fraudsters appeal to people’s greed, promising big returns. For example, an unknown group of entrepreneurs runs the scam bot iCenter, which is a&nbsp;<a href="https://medium.com/@nickcryptoltc/ponzi-investment-schemes-new-and-improved-on-the-blockchain-icenter-co-f9ee68f6c8fe">P</a>onzi scheme for Bitcoin and Litecoin. It doesn’t provide information on investment strategies, but somehow&nbsp;promises investors 1.2% daily returns.



The iCenter scheme operates through a group chat on Telegram. It starts with a small group of scammers who are in on the racket. They get a referral code that they share with others, in blogs and on social media, hoping to get them to join the chat. Once there, the newcomers see encouraging and exciting messages from the original scammers. Some newcomers decide to invest, at which point they are assigned an individual bitcoin wallet, into which they can deposit bitcoins. They agree to wait some period of time – 99 or 120 days – to receive a significant return.



During that time, the newcomers often use&nbsp;social media to share their own referral codes&nbsp;with friends and contacts, bringing more people into the group chat and into the investment scheme. There’s no actual investment of the funds in any legitimate business. Instead, when new people join, the person who recruited them gets a percentage of the new funds, and the cycle continues, paying out to earlier participants from each round of newer investors.



Some members work especially hard to bring in new funds, posting&nbsp;<a href="https://www.buzzfeednews.com/article/ryanmac/cryptocurrency-scammers-are-running-wild-on-telegram">t</a>utorial videos and pictures of themselves holding large amounts of money&nbsp;as enticements to join the scam.



<h4 class="wp-block-heading">Lies and more lies</h4>



Some scammers go for straight-up deception. The founders of scam cryptocurrency OneCoin&nbsp;defrauded investors of $3.8 billion&nbsp;by convincing people their&nbsp;nonexistent cryptocurrency was real.



Other scams are based on impressing potential victims with jargon or claims of specialized knowledge. The Global Trading scammers claimed they took advantage of&nbsp;price differences on various cryptocurrency exchanges&nbsp;to profit from what is called arbitrage – simply buying cheaply and selling at higher prices. Really they just took investors’ money.



Global Trading used a bot on Telegram, too – investors could send a balance inquiry message and&nbsp;get a response with false information&nbsp;about how much was in their account, sometimes even seeing balances&nbsp;climb by 1% in an hour. With returns looking like that, who could blame people for&nbsp;sharing the scheme&nbsp;with their friends and family on social media?



<h4 class="wp-block-heading">Exploiting friends and family</h4>



Once a scheme has started, it stays alive – at least for a while – through social media. One person gets taken in by the promise of big returns on cryptocurrency investments and spreads the word to&nbsp;<a href="https://news.bitcoin.com/crypto-scams-comprise-0-6-fraud-australian-consumer-watchdog/">f</a>riends and family members.



Sometimes big names get involved. For instance, the kingpin behind&nbsp;GainBitcoin&nbsp;and other alleged scams in India convinced a number of Bollywood celebrities to&nbsp;promote his book, “Cryptocurrency for Beginners.” He even tried to make himself&nbsp;a bit of a celebrity, proclaiming himself a “cryptocurrency guru,” as he&nbsp;led&nbsp;efforts&nbsp;that&nbsp;costinvestors between&nbsp;$769 million and $2 billion.



Not all the celebrities know they’re involved. In one blog post, iCenter featured a video that purported to be an&nbsp;endorsement by Dwayne “The Rock” Johnson, holding a sign featuring iCenter’s logo. Videos of Justin Timberlake and Christopher Walken were deceptively edited so they appeared to praise iCenter, too.



<h4 class="wp-block-heading">Fraudulent initial coin offerings</h4>



Another popular scam technique is called an “initial coin offering.” A potentially legitimate investment opportunity, an initial coin offering essentially is a way for a startup cryptocurrency company to raise money from its future users: In exchange for sending active cryptocurrencies like bitcoin and ethereum, customers are promised a discount on the new cryptocoins.



Many initial coin offerings have&nbsp;turned out to be scams, with organizers engaging in cunning plots, even renting fake offices and creating fancy-looking marketing materials. In 2017, a lot of hype and media coverage about cryptocurrencies fed a huge wave of initial coin offering fraud. In 2018,&nbsp;about 1,000 initial coin offering efforts&nbsp;collapsed, costing backers at least $100 million. Many of these projects had no original ideas –&nbsp;more than 15% of them&nbsp;had copied ideas from other cryptocurrency efforts, or even plagiarized supporting documentation.



Investors looking for returns in a new technology sector are still interested in blockchains and cryptocurrencies – but should beware that they are complex systems that are new even to those who are selling them. Newcomers and relative experts alike have fallen prey to scams.



In an environment like the current cryptocurrency market, potential investors should be very careful to research what they’re putting their money into and be sure to find out who is involved as well as what the actual plan is for making real money – without defrauding others.



&#8211;Nir Kshetri; Professor of Management, University of North Carolina – Greensboro



&#8211;The Conversation



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How Cryptocurrency Scams Work

Most people give up on their resolutions by mid-February. As we usher in the second quarter &#8211; a reminder that it’s never too late for investment goals. 



<hr class="wp-block-separator"/>



The year is firmly underway and investors are searching high and low for new opportunities to grow their financial portfolios. Being abreast of these of investment trends gives some insight into how they are most likely to move.



Sonja Saunderson, Chief Investment Officer at Momentum Investments, speaks to us about seven cyclical trends and longer structural investment trends they see dominating 2019 and what they mean for investors. 



<h4 class="wp-block-heading">Cyclical trends:</h4>



1.Better valuation in growth-orientated asset classes Valuations are more attractive in equity and property assets in emerging and developed markets – with the United States (US) being the laggard. This is largely due to market corrections in 2018.



2. Moderating global growth This trend has been in the headlines with 2019s growth forecasts being revised down. There is potential for a recession in the US in 2020, although there is some debate as to whether this would only be a further slowdown. 



READ MORE | <a href="https://www.forbesafrica.com/woman/2019/03/11/the-businesses-of-the-future-20-new-wealth-creators-on-the-african-continent/" target="_blank" rel="noreferrer noopener" aria-label="Businesses Of The Future: 20 New Wealth Creators On The African Continent (opens in a new tab)">Businesses Of The Future: 20 New Wealth Creators On The African Continent</a>



3.Geopolitical factors One of the biggest ticket items this year is the US-China trade war and its direction – whether it will escalate or moderate. Regional trade integration is coming to the fore more prominently. 



In South Africa, Eskom and the elections are two big geopolitical issues this year. General elections take place on May 8 and the results are eagerly anticipated, as is the action thereafter. 



Eskom, South Africa’s power utility that is struggling with a debt of $30 billion and power supply problems, poses a systemic risk and could affect economic growth and the country’s sovereign credit rating.



Investor take out: We are expecting a year of volatility, which gives active investment managers opportunities and strengthens the case for investing in alternative asset classes such as private equity. 



<h4 class="wp-block-heading">Longer structural trends:</h4>



1.Lower returns A lower return from asset classes is expected, in part due to the significant overhang of debt. Extreme volatility will mask this at times, but we expect lower returns in the medium to longer term.



2.Hunt for returns The expectation of lower returns means the hunt for yields is on. This will lead to continuing innovation in listed and unlisted markets such as smart-beta investing, and the growth of alternative asset classes where higher returns can still be found. Although, these investments are more complex and restrictive. 



READ MORE | <a href="https://www.forbesafrica.com/investment/2019/02/26/three-big-ideas-in-warren-buffetts-2018-letter-to-berkshire-investors/" target="_blank" rel="noreferrer noopener" aria-label="Three Big Ideas In Warren Buffett’s 2018 Letter To Berkshire Investors (opens in a new tab)">Three Big Ideas In Warren Buffett’s 2018 Letter To Berkshire Investors</a>



3.Pressure on fees The pressure on asset management models will continue with the focus on lower fees. Surviving models will either be a scale approach where the volume of assets can pay for the costs of asset management, or the boutique model where smaller teams can justify higher costs on a smaller asset base. 



4.Outcome-based investing The long-term investment trend is not just about delivering a return against a benchmark, it is meeting clients’ needs and goals. This is the focus of outcome-based investing which simplifies the investment process by helping investors remain focused on what matters – staying invested.



Investor take out: Having a trusted adviser will be key to ensuring investors can develop sensible financial plans. Regular engagement with advisers will help navigate the bumps in the road and stay the course, which has proven to be the best investment strategy. Along with this, investors need to have a diversified investment portfolio. 



– As told to Melitta Ngalonkulu

The Top 7 Investment  Trends That Have Been Identified In 2019

Key contributors to the growth of the Nigerian economy, they have redefined banking by leveraging technology and connecting people to market. From just £100 in his bank account, Pascal Dozie has built a business empire his son Uzoma is taking to the future.



<a href="https://www.forbesafrica.com/cover-story/2018/11/26/the-money-men-of-nigerias-banking-industry/">READ: The Money Men Of Nigeria’s Banking Industry</a>

Photo by: Kelechi Amadi-Obi (www.kelechiamadiobi.com)

WATCH | Father-Son Duo Pascal & Uzoma Dozie on Cover of Forbes Africa November Issue

Gar Lippincott and Daniel Ryan of Atlantic American Partners were in South Africa recently looking for high net-worth individuals wanting to invest in the US.

It’s a warm spring day in Johannesburg in September, and Gar Lippincott and Daniel Ryan are in formal corporate attire. It is Lippincott’s first time in the country, and he is jet-lagged.
A little over two months ago, he was booked to fly to South Africa from the United States (US) but was turned back at immigration. A complete irony for a man who helps people move to the US.
“At Atlanta airport, the lady looked at Daniel’s visa and let him through and she looked at my visa and she said ‘I am afraid you can’t get on the plane because you have to have a blank page on your passport’. I said ‘I have three blank pages’ and she said ‘no, it’s supposed to be the one that says visa on it’. She said it’s the rules in South Africa so I had to sadly go back home… now when I was coming, I was told that’s not an issue anymore so I am happy they have made traveling into the country easier,” says Lippincott.
With a brand-new passport, he’s here looking for people who want to invest in the US in exchange for a green card. Lippincott says he has always been interested in South Africa for its growth prospects.
<a href="https://www.forbesafrica.com/investment/2018/10/02/investing-in-memories-not-material/" target="_blank" rel="noopener">READ MORE: Investing In Memories, Not Material</a>
“From what I understand, the things that are causing short-term decline in the economy in South Africa are set up to provide long-term growth and hopefully people will understand this,” he says. 
Ryan agrees: “I lived in Malawi for 12 years and South Africa is still considered the shining one throughout the continent. Even with all the problems, everyone still wants to come here because of the opportunities.”
According to an AfrAsia Bank report, South Africa comes second to Mauritius in having the highest number of high-net-worth individuals. These are the kind of people Ryan and Lippincott target through their work at Atlantic American Partners. The company has real estate investors and professional private equity fund managers that manage money for banks, insurance companies, and pension funds. In addition, they help people get US green cards and ultimately US citizenship through the US government’s EB-5 Immigrant Investor Visa Program.
“Basically we look for people who want to move to the United States and we help them do so legally by investing and the nice thing is, with our program, they are also able to get a nice return on investment,” he says.
According to Lippincott, for a $500,000 investment that creates 10 jobs for American workers, you could get a green card in about two years and be a US citizen in about six or seven years.
“Twenty seven countries have an investor visa program but with most of them, it’s essentially a fee you pay. For example, you pay $1.5 million in Australia… The fee is a one-time fee and you never get it back. One of the biggest advantages with our program is you actually invest the $500,000 into a fund. We act as a trustee of that money and within five to seven years, they get that money back with a bit of return on investment and you are a permanent citizen in the US.”
Atlantic American Partners invests the money in real estate developments like hotels, apartments and student accommodation.
“What’s nice about the programme is it doesn’t only cover the investor; it covers the spouse and children under 21. Our biggest family was a Hungarian family with seven children so they got nine green cards for $500,000,” says Lippincott.
The company says it has had a positive response in South Africa.
“Two months ago, we were here and we had scheduled six presentations for 100 people and we ended up speaking to 450 people. Most were business people, people worried about the economy, people worried about the political future of South Africa and people concerned about the education future of their children,” says Ryan.
According to Lippincott, despite the news on the clampdown on immigration, the US economy is booming and will perish without immigration. In the era of Trump, that’s heartening news indeed.

online-edit

Offering The American Dream To African Investors

Gar Lippincott and Daniel Ryan of Atlantic American Partners were in South Africa recently looking for high-net-worth individuals wanting to invest in the US.
It’s a warm spring day in September, and Gar Lippincott and Daniel Ryan have just arrived in South Africa. It is Lippincott’s first time in the country, and he is jet-lagged.
A little over two months ago, he was booked to fly here from the United States (US) but was turned back at immigration.
“At Atlanta airport, the lady looked at Daniel’s visa and let him through and she looked at my visa and she said ‘I am afraid you can’t get on the plane because you have to have a blank page on your passport’. I said ‘I have three blank pages’ and she said ‘no, it’s supposed to be the one that says visa on it’. She said it’s the rules in South Africa so I had to sadly go back home… now when I was coming, I was told that’s not an issue anymore so I am happy they have made traveling into the country easier,” says Lippincott.
With a brand-new passport, he’s here with Ryan looking for people who want to invest in the US in exchange for a green card.
Lippincott, the Managing Partner of Atlantic American Partners, says he has always been keen on South Africa for its growth opportunities and prospects.
“From what I understand, the things that are causing short-term decline in the economy in South Africa are set up to provide long-term growth and hopefully people will understand this,” he says. Ryan, the company’s Managing Director of Emerging Markets – Africa, agrees: “I lived in Malawi for 12 years and South Africa is still considered the shining one throughout the continent. Even with all the problems, everyone still wants to come here because of the opportunities.”
According to an AfrAsia Bank report, South Africa comes second to Mauritius in boasting the highest number of high-net-worth individuals.
These are the kind of people Ryan and Lippincott target through their work at Atlantic American Partners. The company has real estate investors and professional private equity fund managers that manage money for banks, insurance companies, and pension funds. In addition, they help people get US green cards and ultimately US citizenship through the US government’s EB-5 Immigrant Investor Visa Program.
“Basically we look for people who want to move to the United States and we help them do so legally by investing and the nice thing is, with our program, they are also able to get a nice return on investment,” he says.
According to Lippincott, for a $500,000 investment that creates 10 jobs for American workers, you could get a green card in about two years and be a US citizen in about six or seven years. “Twenty seven countries have an investor visa program but with most of them, it’s essentially a fee you pay, or you need to be actively engaged in the day-to-day operation of a business. For example, you invest $1.5 million in Australia, but you need to hire employees and generate a certain amount of revenue. One of the biggest advantages with our program is you actually invest the $500,000 into a fund. We act as a trustee of that money and within five to seven years, they get that money back with a bit of return on investment and you are a permanent citizen in the US.”
Atlantic American Partners invests the money in real estate developments like hotels, apartments and student accommodation.
“What’s nice about the program is it doesn’t only cover the investor; it covers the spouse and children under 21. Our biggest family was a Hungarian family with seven children so they got nine green cards for $500,000,” says Lippincott.
The company says it has had positive response in South Africa. “Two months ago, we were here and we had scheduled six presentations for 100 people and we ended up speaking to 450 people. Most were business people, people worried about the economy, people worried about the political future of South Africa and people concerned about the education future of their children,” says Ryan.
According to Lippincott, despite the news of the clampdown on immigration, the US economy is booming and will perish without immigration. In the era of Donald Trump and his anti-immigrant views, that’s heartening news indeed.

AAP-Logo-Centered

Offering The American Dream

From rock ‘n’ roll roadie to corporate speaker and entrepreneur, Richard Mulholland has run Missing Link, a presentation firm in South Africa, for 21 years. The self-described hobbyist talks finance, investments and expensive tattoos.

How does your company generate profit?
Different entities do it in different ways; Missing Link is a service organization where we basically sell our brain for the pound, whereas TalkDrawer and The Sales Department have a subscription and retainer model respectively. Exploring different business models intrigues me; it’s something I believe all entrepreneurs should embark on. You won’t be killed off by a better business; you’ll be killed off by a better business model.
&nbsp;
What is your investment philosophy? 
I know my weaknesses and this is one. As such I have a set-it-and-forget-it mentality. I find smart people that I like with diversified philosophies and leave them to it. The obvious exception to that is when we invest in starting new businesses.
&nbsp;
What is your most prized investment? 
I hate to be a cliché, but I timed crypto pretty well and have been pretty lucky there. My most prized investment would have to be starting a business though, that has certainly reaped the biggest dividend.
&nbsp;
What advice would you give someone interested in investing? 
In spite of what you’re told, unless you are super rich and have money to blow, investing isn’t a hobby. Find someone smarter than you to do it. Or, if you’re like me, find diverse, smart people and share the investment love.
<a href="http://www.forbesafrica.com/investment/2018/10/02/investing-in-memories-not-material/" target="_blank" rel="noopener">READ MORE: Investing In Memories, Not Material</a>
Legacy or innovation? Which would you invest in and why? 
Again, diversity is key. All that is old is not bad, and all that is new isn’t great.
&nbsp;
Your biggest investment blunder? 
I’ve invested in businesses as a complete outsider, and not given the love and support that they needed at the beginning to get traction. That has never worked… and I never seem to learn.
&nbsp;
What do you spend most of your money on? 
Of late, board games and electric skateboards.
&nbsp;
What is the most expensive item in your wardrobe? 
A motorcycle riding jacket.
&nbsp;
How much were you earning as a rock n’ roll roadie? 
R400 ($27) per week, or R600 ($40) per week while on tour.
&nbsp;
What is the most you spent on a tattoo? 
About R15,000 ($1,000) for a tattoo on my back.
&nbsp;
Would you invest in longevity (prolonging your life) and why/not? 
Only in so far as staying healthy.
 
What is the most interesting thing you have invested in? 
Other people’s businesses. Troop Travel is one I’m quite enamoured with at the moment.

Meandmymoney2

From Rock ‘n’ Roll To Corporate Speaker and Entrepreneur

Cézanne Britain is the founder and CEO of Britain Renecke, a 100% black, female-owned commercial law firm in South Africa. Her tips for a debt-free life and why she counts memories, not money.

What is your investment philosophy?
I tend to have a conservative investment philosophy that is long-term orientated rather than short-term focussed. While I believe in doing research, I am also guided by my gut feel when making investment decisions.
What advice you would give anyone who wants to invest?
I take a very conservative and long-term view on investments. From a very young age, my focus has been to save as much as you possibly can of your salary and to try and be debt-free as soon as you can. And if you can steer away from short-term credit like credit cards and short-term loans from the get go in your career, that’s probably a good thing. You are going to need to build up your credit but make sure that, for example, if you spend money on your credit card, settle the full amount at the end of the month. Don’t let it draw interest.
What is the most interesting investment decision you ever made?
When my husband and I got married, we didn’t buy wedding rings. We didn’t buy bedroom suites. We spent our money on travel. After the first financial year of business, I wanted to give my husband something to show him and thank him for all his support and I bought him a wedding band and that was two and a half years ago. And it was quality but it didn’t cost a fortune.
<a href="http://www.forbesafrica.com/investment-guide/2018/08/03/fashion-fame-and-finances-with-sa-designer-david-tlale/" target="_blank" rel="noopener">READ MORE: Fashion, Fame and Finances With SA Designer, David Tlale</a>
What was your first big investment?
Buying my first apartment. I have generally invested in immovable property and shares and my education. Of the three, I paid for my own education and worked five jobs a year. Because I didn’t want to have debt when I started this [company] when I was 18 years old. It meant five jobs a year but it meant I graduated without a loan. There were lots of bruises along the way. But I was debt-free. The second thing I had on my list was to buy property. I then bought a bachelors apartment when I finished my articles…I was going on 23.
What lessons have you carried with you since your childhood?
I was fortunate to have parents who taught me the value of discipline, responsibility and hard work from a young age. I think most important of all, have a dream and vision and a fierceness, fearlessness and resilience to succeed.
What is the most expensive item you have?
I don’t tend to collect material things. I tend to spend money on traveling and making memories. Four years ago, I took my mom to Mauritius for the first time. I wanted her to experience what I experience. We spend our money on giving people experiences and giving ourselves experiences because memories last a lifetime. When I talk about long-term investment, I also talk about memories lasting a lifetime. You can’t get those back.
The most expensive trip you have ever taken?
A trip around the world seven years ago.
How do you describe your leadership style?
I learned a long time ago we have to use our power responsibly. I don’t have one type of leadership style, but rather a combination of autocratic, transformational, coaching and visionary leadership.

CB-Pic-standing

Investing In Memories, Not Material

The award-winning men’s fashion designer on the business of fashion and dressing up no less than the South African president.

1. Who you would like to dress and why? 
I would like to dress our [South Africa’s] head of state Cyril Ramaphosa; that would be really good on my CV. But not only that, simplicity is the ultimate sophistication. When you look at ministers and presidents, they look simple yet sophisticated. What people don’t realize is the most simple outfits are the most difficult to make. You can’t over-accessorize, you just can’t over-design. You have to keep it very clean and minimalistic and also in harmony with the person’s character…So I am ready for that challenge.
2. As a designer, when is the right time to start expanding to retail? 
As designers, we all have different business strategies. What works for one designer does not necessarily work for the other. But the best time to start is when as you fully understand the business of fashion and have completed your internship. The one thing I always advise upcoming designers is to not be too much in a hurry to establish their brand, because you will end up being an overnight sensation.
3. What does it take to build a brand like Palse Homme? 
Blood, sweat and water from the moon. It’s a long journey that does not have milestones in between, the reason I say that is that it’s like running a marathon that does not have a finish line. You have to strive to get somewhere and the day you get there, that is when you get to retire.
4. How do you stay disciplined with your money? 
I am very prudent when it comes to my finances. As an entrepreneur, you cannot do it all by yourself… so I have outsourced my public relations and finance services to the experts.
5. What is your most expensive indulgence? 
Sunglasses. I once spent R6,000 ($450) on them. I am a hoarder of good sunglasses; I don’t even know how many pairs I have.
6. What is the biggest challenge you have faced in the fashion industry? 
It’s very difficult for designers to attract potential investors. People don’t understand that to be able to showcase my designs during fashion week, it means we have to pay to be part of fashion week, most importantly, we have to raise capital, and the overheads become extremely insane because you have to come up with money to be able to put together your collection. Simultaneously, when you do that, you are even unable to take orders. You are stressing about that fashion week night that will take only five to 10 minutes. Mind you, while you are working on that, you have overheads like salaries and rent.
7. What do you spend your money on? 
Traveling! I always say to people I enjoy being out of the city and the country. There is something about traveling that just shifts your mind-set and makes you more appreciative of what you have back home [South Africa]…You realize that we have it all, in terms of food to the most amazing hotels; the energy people exude is phenomenal. We live in a very beautiful country.

TLH_1302

7 Questions with Award Winning Designer – Paledi Segapo

From November 7-9, Africa Inc. will convene in South Africa’s Gauteng Province, the continent’s seventh largest economy, for the inaugural Africa Investment Forum (AIF).
An initiative of the African Development Bank (AfDB), it was announced in May in Johannesburg by AfDB President Akinwumi Adesina with Gauteng premier David Makhura.
“It will be the continent’s first-ever investment market place,” said Adesina, formerly Nigeria’s minister of agriculture.
“South Africa is open for business again, and as Gauteng, we are ready to host the forum on behalf of not only South Africa, but for Africa,” said Makhura, calling the forum “the Davos of Africa”.
A platform to close the investment gap, Adesina called it a game-changing initiative.
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“It cannot be business as usual, it must be business unusual,” he said.
With Africa’s population set to be two billion by 2050, its development needs will require an estimated $600-$700 billion per annum. So accelerated development will be the forum’s focus.
“The forum will be 100% transactional. There will be no political speeches. The only thing allowed will be transactions, transactions and transactions,” said Adesina. In attendance in November will also be African heads of state who will be present as the CEOs of their countries.
In a sit-down interview with FORBES AFRICA, the AfDB president shared more about new investments, and the bread baskets and Silicon Valleys of Africa:
How will AIF take Afro-optimism and the African growth story further? 
African economies have been growing relatively well in a very difficult global environment. Despite the global economic downturn, in 2016, they grew at roughly 2.2%; in 2017, they grew at 3.6%. In 2018, they are projected to grow at 4.1%. And that’s still above the global average.
So Africa’s head is above the water. But it’s more than about keeping your head above the water that matters, it is about how fast you can swim. I think Africa needs to swim fast and needs a lot of oxygen to do that. And that means a lot of firepower in terms of capital to close the infrastructure gap. To be able to drive millions of people out of poverty, Africa should be growing at double digits.
To be able to do that we have to deal with the problem of lack of electricity, make sure there is a lot more investment to allow trade to happen. Africa could contribute a lot more be it is rail, ports, national highways or aviation. It has to change lives on the ground and quiet honestly when people ask if I am an Afro-optimist, I am a very proud African. Africa is a beautiful place and has tremendous potential so we shouldn’t always just talk about the potential because nobody eats potential. We have to unlock that potential. So that is what the Africa Investment Forum is all about. Be it oil, gas, minerals or agricultural commodities, Africa is awash with rich resources.
The question is how to turn them into real dividends with significant amounts of revenue that allows a better quality of life for the people. For that, you need to deal with the infrastructure deficit. We used to say it is about $15 billion. But that has changed. The AfDB recently released the African Economic Outlook report and the deficit is anywhere between $67 billion to $107 billion every year, so which means we must do a faster job pulling capital together because the rest of the world is not waiting.
How long will it take to close that gap? 
I think within the next decade. But it’s going to take a lot of work…
What about the youth dividend; what are the future industries? 
Africa is at the very top in fintech and mobile money… but as we look at new types of industries, we have to look at them in the context of the fourth industrial revolution… I get excited when I see the youth in Africa well-educated, they are all on social media, know how to use apps, which means they already have a leg up. So the key is how to re-tool them to operate in that kind of a new economy. The AfDB is doing that in three ways already. First is we signed up a joint program with Google and Microsoft to help develop young talented Africans in computer technology. We as a bank are already investing in technology parks in Cape Verde, Angola, Kenya, Senegal, Rwanda. These are technology parks where you can have the ICT industries emerge; almost like trying to create the Silicon Valleys of Africa.
When it comes to the new economy, you have to start early. We have a program trying to create 250 coding centers in Africa where you get people with computational knowledge to do coding services that can help in this new world we are moving towards. We are also investing in universities for science and technology across Africa to create this new scientific human capital…We need to give African youth the skills they need for the jobs of the future, not for the jobs of yesterday.
What then are the new wealth generators? 
If you look at where the money is going in Africa, it’s not actually going into oil, gas and natural resources. Most of the foreign direct investment (FDI) is going into the service industry, at least 64%, and also the financial services sector; maybe about 27% goes into the manufacturing sector. So these are the big sectors where you see a lot of FDI. But there are two sectors very important for me. 
One is ICT, because this is going to be the driver of the economy. It’s very important for countries to invest heavily in the ICT industry to give their countries the platforms they need in the knowledge economy.
The second is the food and agriculture industry. Africa has a lot of oil and gas, but nobody drinks oil, nobody smokes the gas. Food is the future. The size of the food and agriculture industry in Africa is going to be $1 trillion by 2030 in Africa. This is where the wealth is supposed to come from. Unfortunately, in Africa, we always walk past gold. Just imagine you are seeing gold, and you see it as dirt and don’t recognize it. That’s the power agriculture has… The food business is the biggest business. Agriculture is not a development sector, it’s not a social sector, it’s a wealth-creating sector. Agriculture is a business and Africa needs to fully unlock that potential. If you look at the amount of arable land left to feed nine billion people in the world by 2050, it is not in Europe, Latin America, Asia, or the US, it’s in Africa – 65% is right here. What Africa does with agriculture will determine the future of food for the world.
How will Africa’s billionaires and capitalists help achieve these goals? 
If you look at the high-networth-individuals in Africa, the majority of them make their money on this continent, and that’s already a strong signal. Aliko Dangote makes his money in Africa. 
So we are going to get them involved on the Africa Investment Forum because it is trying to send a message to the world that we have African businesses that are viable businesses making money and doing well on the continent; so putting capital to help them expand can help them become global multi-national companies…
And investing in African entrepreneurs? 
The issue for entrepreneurs is finding them, nurturing them and then putting the financial backing behind them to thrive. Africa has a lot of young people. Every day, I wake up I read about a young person doing so well. So the best investment that Africa can make is to put its capital at risk on behalf of its young people. Because when you see a young person walk into a financial institution, all you see is risk, risk, risk. We have to change that and try and see creativity, innovation and entrepreneurship. So that way we can put your money at risk to make them more creative, more innovative and unleash their entrepreneurship capacity. That is why at AfDB, we have a program helping to invest in the early-stage businesses of young people. Mark Zuckerberg and Bill Gates didn’t just get there, somebody had to believe in them.
We have a program set up with the European Union called Boost Africa to invest in young people. The other thing we are doing is helping unleash entrepreneurship in the food and agriculture industry. The bank has a program targeted at getting young graduates, medical doctors, engineers… who are all going to agriculture as a business. Last year, AfDB invested over $860 million in that program for about eight countries. Going forward, we expect to invest $1.5 billion dollars every year in that program for the next 10 years. 
I really think unless we change the mindset, the labor composition of the agricultural sector and create a new dynamic group of entrepreneurs in the food industry, we only will have old people left. Every university in Africa has to make entrepreneurship compulsory.
&#8211; By Karen Mwendera and Methil Renuka

Adesina_KM

Investment Marketplace Coming To Africa

The IMF says the global economy is likely to expand 3.7% in 2018. What is your personal investment philosophy? 
A 3.7% growth rate for the world economy is quite thought-provoking when considering that some emerging markets, such as South Africa, are not expected to grow by much more than 2% in 2018. The foundation of my personal investment philosophy is the elimination of debt, starting with the most expensive debt.
Is it mainly cash, stocks or mutual funds where there is growth? Any other preferred financial instruments? 
The organization that I work for restricts me from directly investing in shares, due to independence requirements, and so I generally do not invest in shares. The asset I find attractive is property, followed by unit trusts. Interest rates are currently low, and have been so for some time as a result of the pressure that the global economy has been under, and so I do not consider cash to be an attractive asset class.
What about real estate, art, jewelry, wines, watches…? Do you see them as worthwhile investments too? 
I strongly believe that real estate should form part of any wealth creation and preservation strategy. I have never invested in art, jewelry or wines (as an asset), and so cannot speak with any authority on these type of investments. Over time, and with the exception of the odd property bubble, real estate has proven itself to be able to generate inflation beating returns for relatively low risk. However, one should always be cautious of property bubbles and unrealistic expectations.
How do you balance your portfolio between liquid and fixed assets to build wealth? 
We are fortunate enough to live in a country that still makes it possible to hold a good balance of both, and where fixed investments can be liquidated with relative ease. This is not always guaranteed in other parts of the world. When one is still young, I believe a portfolio should always be weighted towards fixed assets, with the liquidity being prioritized as and when one gets nearer to retirement.
Is investment about getting rich or increasing savings? What are your own long-term goals? 
The first goal of investment should be to secure financial independence and the ability to sustain one&#8217;s lifestyle long after retirement. This does not necessarily translate into being wealthy. After all, wealth is a relative term. With people living longer and longer, the ultimate long-term goal is to have enough to live on after retirement without having to make significant changes to one&#8217;s lifestyle.
What returns do you target from your investments and how do you monitor it? 
As a minimum, one should target for one&#8217;s investments to outstrip inflation and to cover any investment and financing costs associated with that investment. I enlist the services of a broker to monitor performance. 
 
What do think the seven habits of successful investors must be? 
Perhaps not seven in total, but a good mentor once told me the following: 
1. Try and pay off your debt in the shortest possible time. 
2. Do not be greedy. 
3. Do not follow the herd. 
4. Invest for the long-term, and do not be fazed by short-term volatility. 
5. Life is not only about money.
Was there any one time when you thought your plans didn’t work, especially in a volatile market? 
All asset classes come with some exposure and risk. Very few people in the world can claim not to have been impacted in some way or another by the 2008 global financial crisis.
With longevity increasing and global billionaires investing in prolonging life, how best can one be retirement-ready? 
Retirement-readiness is a big problem in society today, and it is an accepted fact that people generally do not save enough for retirement. There is unfortunately no silver bullet to this. The simple fact is that one gets retirement-ready through exercising discipline in saving, and to start saving for retirement at the youngest possible age. Of course, one is always in control of one&#8217;s lifestyle.

Me & My Money: Dion Shango

Although we sometimes desire change, there is no absolute way to measure change. What we do know is that the future invades the present faster than many entrepreneurs can handle.
We go to bed, only to wake up and see that a company with a lean work force and tiny office is now the fastest growing company in the world. The future of wealth creation and multiplication in Africa worries me because of our slow development of basic infrastructure. If Africa entrepreneurs are to be the future leaders in businesses, then our romance with the old rules will have to give way to more ingenious ways of wealth creation.
Steven Silbiger, who has written many business books, describes wealth in a way that contradicts the definition of wealth held by many African entrepreneurs, especially in the 20th century when land was the major factor of economic activities. Silbiger writes that “wealth is portable, it’s knowledge”.
In Africa, the popular understanding of wealth is that it is tangible and usually associated with the acquisition of property. Many African countries are blessed with lands that are either embedded with mineral resources or fertile for farming. This idea that land was a prerequisite for wealth creation led to Africans valuing tangible substance far above the intangible. That preference still prevails today. From Zimbabwe, to South Africa and Nigeria, there is heated discussion on land matters.
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Africa&#8217;s first entrepreneurs, according to history, were both farmers and traders with extensive trade routes that developed across kingdoms. Famous ancient African business hubs, such as Timbuktu, Ashanti, and Oyo, became wealthy empires due to their wide trade networks of agricultural produce.
Today, many of those business hubs are reduced to passive historical business cities because of an unexpected change that occurred. Have Africans learned lessons from these sudden changes that shocked us in the previous century?
In Nigeria, there is a wave of young entrepreneurs rushing to farming. When I talk to them about starting such a business venture, I see a genuine passion. The challenge is that many of them avoid the discussion on the agriculture value chain. They just want to farm and trade the produce. That was the same thinking of entrepreneurs in the 20th century who had vast cocoa farm, but no factory to produce chocolate.
The dynamics of wealth have shifted from crop farming to agricultural value chain, productive thinking and digital value creation. The rule of wealth creation has extended beyond Adams Smith’s theory of “the rent of the land”.
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In the present business environment, the human brain matters most. An economy with digital technology and an acute investment in the human mind creates an enabling environment for wealth creation. No city can be better than the thinking of the entrepreneurs within it. That is the philosophy that differentiates poor nations from the rich. Business growth now largely depends on workers’ creative ability which cannot be quantified, but explains the underlining factor for all disruptions in business.
Today, creative problem solving and the human mind are the fields for wealth creation. I cannot think of a self-made billionaire who didn’t resolve a problem.
In light of this, an entrepreneur will get rewarded to the degree of the problems they solve. All cities with outstanding development are products of businesses and individuals solving problems and improving existing solutions.
Thinking creatively and prioritizing intelligence will help any business. The next generation of entrepreneurs must embrace creative thinking over tangible assets. &#8211; Written by Victor Mamora

Change The Rules And Be Rewarded

How is it that West Africa only accounts for 5% of foreign direct investment (FDI) into the African continent? The World Bank wondered this in July this year.
This is a region that includes the continent’s largest economy, Nigeria, with gross domestic product (GDP) of $406 billion in 2016, about 29% of sub-Saharan African output of $1.4 trillion. By comparison, South Africa, the continent’s most advanced economy has a size of $294 billion. Furthermore, the largest and most dynamic francophone African country, Ivory Coast, with a $36 billion economy, is also West African. So why the scant foreign investor interest?
Jack Ma, one of Asia’s richest men, led a group of people with similarly deep pockets to East Africa in July. His first stop was Kenya, an economy barely one-fifth of Nigeria’s size. Ma also visited Rwanda, a tiny landlocked neighbor to Kenya.
If corruption, terrorism and the occasional rebellion in Nigeria and Ivory Coast is disturbing, why is Ghana overlooked? With an economy almost as large as Kenya, Ghana has a better democratic record and has proved to be one of the most stable African countries. And just as Nigeria struggles to deal with the Boko Haram terrorist group in its northeast, so does Kenya with Al-Shabaab. Additionally, political violence is more of a problem in Kenya than it is in Nigeria.
So why did Ma and his 38 billionaire friends find relatively smaller African countries more attractive to the larger coastal countries in the West with such cosmopolitan cities like Lagos and Abidjan? The reasons are not farfetched.
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The World Bank asserts cumbersome administrative procedures and corruption at the ports hinder the speedy clearance of goods, for example. These apply to most African countries, though. It attributes access to finance as well. This is not significant though, as foreign investors bring their own capital. But if a country’s exchange rate policy is controlled and not transparent, this can be stymied.
East African countries have been more reliable in this regard, allowing their currencies to trade without much interference and not hindering the free flow of capital in and out of their jurisdictions, even during periods of crisis. Historically, this has not been the case in West Africa, especially Nigeria, which until recently not only rationed hard currency but blocked the repatriation of capital, causing great losses to foreign investors. Also, myriad bottlenecks around doing business in most West African countries are worse than they are in East Africa. Little wonder the World Bank ranks Rwanda and Kenya 56th and 92nd out of 190 countries respectively in its latest ease of doing business index. Ghana and Nigeria are ranked 108th and 169th respectively.
Even though corruption underpins the relatively more difficult business conditions in West African countries, it is not likely the reason they are less attractive investment destinations. Kenya is perceived by some to be more corrupt than Nigeria, for instance. In fact, Transparency International ranks Kenya as more corrupt than Nigeria in its corruption perception index.
The reason could be that East African countries are more economically integrated. In contrast, West African countries, under the Economic Community of West African States (ECOWAS), have been more successful at political integration than economic cohesion.
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A more innovative streak is also a factor, especially with information technology; albeit West African countries, like Ghana, Senegal and Nigeria, are increasingly demonstrating technological progress as well. Facebook’s chief executive, Mark Zuckerberg, visited Nigeria in August 2016, for instance.
So what can West African governments do to attract more FDI? They must make doing business easier. The World Bank is helping via a European Union funded four-year ‘Improved Business and Investment Climate in West Africa Project’. It is hoped the ECOWAS Investment Climate Scorecard will bring quicker progress with integration.
With patronage-based politics continuing to be crucial to the stability of most West African countries, however, there is not much political will towards economic integration. Move too quickly and they might have bigger problems than just being difficult to do business in. &#8211; Written by Rafiq Raji

Why Is West Africa Less Attractive To Investors?

Nancy Zevenbergen operates her market-beating $2.4 billion-in-assets investment firm from a canned-sardine-tight corner office overlooking Seattle&#8217;s Space Needle and the Olympic mountains. Inside this 400-square-foot &#8220;war room&#8221; is a pentagonal desk where she and the four other members of her stock-picking team use 15 computer screens displaying stock market and financial data. On the walls hang dry-erase boards with Zevenbergen Capital Investments&#8217; positions and corkboards holding newspaper and magazine clippings relating to long-held winners, such as <a href="https://www.forbes.com/companies/amazon/" target="_blank" rel="noopener">Amazon.com</a>, <a href="https://www.forbes.com/companies/tesla/" target="_blank" rel="noopener">Tesla</a> and <a href="https://www.forbes.com/companies/netflix/" target="_blank" rel="noopener">Netflix</a>. There&#8217;s even an unframed &#8220;Frank Underwood for President&#8221; poster &#8211; a nod to Netflix&#8217;s House of Cards hit.
The team listens via speaker to the earnings calls of the disruptive, entrepreneur-run businesses Zevenbergen favors. Together, she figures, they have a better chance of catching nuances beyond the numbers. Is a CEO excited about a new revenue stream? Losing faith in his strategy? Such cues are crucial because Zevenbergen is a &#8220;high conviction&#8221; investor who discounts value measures like price-to-earnings ratios in her hunt for &#8220;dreamers with way bigger brain capacity than I have&#8221; and the skill to execute. &#8220;My job,&#8221; she says, &#8220;is maybe without full information to make an investment alongside these folks and then track how they are doing.&#8221;
It&#8217;s a job that Zevenbergen, 58, has excelled at since setting up her own investment shop at the age of 28. To pay for college, she worked part-time as a teller at Seattle&#8217;s Rainier Bancorp. After graduation, she was hired by the bank&#8217;s trust department and began managing money. In 1986 she was assigned to vet the initial public offering of local phenom<a href="https://www.forbes.com/companies/microsoft/" target="_blank" rel="noopener">Microsoft</a>. When the IPO shares popped, the trust department quickly sold its allotment to lock in clients&#8217; gains &#8211; a tad shortsighted considering Microsoft&#8217;s 43,000% return since 1987.
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The experience was formative; Zevenbergen saw the huge opportunities created by PCs and the wisdom of holding growth stocks for the long haul. She left to start her own firm with one client and $500,000 in assets and worked from her living room while her husband, mother and a nanny watched her infant and toddler.
By 1992, Zevenbergen had an office, 51 clients and $212 million under management. She needed help and recruited Brooke de Boutray, whom she&#8217;d befriended a decade before when both were studying for their CFA designations. Now 62, De Boutray had also been in the right place at the right time. After the 1984 breakup of <a href="https://www.forbes.com/companies/att/" target="_blank" rel="noopener">AT&amp;T</a>, she was assigned by a regional bank to cover sleepy telecoms &#8211; just before cellular service and local entrepreneur <a href="http://www.forbes.com/profile/craig-mccaw/" target="_blank" rel="noopener">Craig McCaw</a> made the beat exciting. In 1994, Zevenbergen added Leslie Tubbs, now 58, a banker-turned-analyst who specializes in financial and biotechnology stocks. The three women still form the core of the stock-picking operation, with two younger male analysts added in 2011.
Despite dramatic losses during the dot-com bust and the financial crisis, Zevenbergen&#8217;s aggressive strategy has produced impressive long-term results. Her flagship growth equity fund has returned 11.5% annually, net of fees, since 1987, beating the Russell 3000 Growth Index&#8217;s 9.8% return. A smaller, even more growth-focused ZTech fund has returned 12.9% annually net of fees since 1994, trouncing the Russell 3000 Growth&#8217;s 8.8% return during that period.
In August 2015, Zevenbergen launched two mutual funds. The growth-heavy Zevenbergen Genea Fund &#8211; with an expense ratio of 1.4% and minimum investment of $2,500 &#8211; ranks in the top 1% of its category with a one-year return of 50%. The slightly less aggressive Zevenbergen Growth Fund is up 30% over the past year, ranking in the top decile of its category. In addition to proven winners like Amazon, the Genea Fund holds concentrated bets in Shopify and South American e-commerce giant <a href="https://www.forbes.com/companies/mercadolibre/" target="_blank" rel="noopener">MercadoLibre</a> and online education provider 2U.
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The mutual funds have attracted just $10 million and are not for the faint of heart &#8211; or the impatient. &#8220;If you just want to maintain wealth, go for diversification and go passive,&#8221; Zevenbergen says. &#8220;If you want to create wealth, own growth companies and concentrated portfolios. But recognize that they cannot perform every day or every week or every month or even every quarter.&#8221; She calls investing with a less than five-year time frame &#8220;truly speculative.&#8221;
Zevenbergen herself shows extraordinary patience &#8211; if she believes in an entrepreneur. She acquired the firm&#8217;s $167 million Netflix stake at an average split-adjusted cost of $6, mostly prior to 2010. The stock rose to $43, then plunged to $9 in 2011 after cofounder <a href="http://www.forbes.com/profile/reed-hastings/" target="_blank" rel="noopener">Reed Hastings</a> attempted to spin off Netflix&#8217;s cash-cow DVD-rental business to hasten its streaming growth. Hastings reversed course, and Zevenbergen added to her holdings; Netflix now trades at $185.
Note that Zevenbergen bets on entrepreneurs and not just ideas. She shuns companies run by &#8220;rent-a-CEOs&#8221; in favor of founders who are ready to make &#8220;outrageous investment&#8221; decisions that may take years to pay off. And she can be forgiving. She bought Amazon in 1997 when it was newly public but sold when it tanked in 2000. She bought again in 2007 and today has a $157 million position in Amazon with a $60-a-share average basis, meaning her bet on <a href="http://www.forbes.com/profile/jeff-bezos/" target="_blank" rel="noopener">Jeff Bezos</a> has risen sixteenfold.
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High conviction? She bought Facebook&#8217;s initial public offering at $38 and added to the stake after the social-networking company fell by half after its debut. Her $138 million position is up sevenfold. Then there&#8217;s Tesla, which trades at 16 times what Zevenbergen paid. Skeptics abound: $10 billion in short money is betting against it. Zevenbergen is unfazed. She says she worries more about finding the next great entrepreneur.
That search takes Zevenbergen well beyond tech and beyond her Seattle base (though she was early into local winners <a href="https://www.forbes.com/companies/starbucks/" target="_blank" rel="noopener">Starbucks</a> and <a href="https://www.forbes.com/companies/costco-wholesale/" target="_blank" rel="noopener">Costco Wholesale</a>). In 2013, while screening for transportation companies that might benefit from Amazon&#8217;s growth, her team came upon Greenwich, Connecticut-based <a href="https://www.forbes.com/companies/xpo-logistics/" target="_blank" rel="noopener">XPO Logistics</a>, which was growing rapidly through acquisitions. CEO Bradley Jacobs had already done successful roll-ups in construction equipment and waste management. She started buying and added to her position after XPO&#8217;s September 2015 acquisition of trucker Con-way hammered its stock, bringing her average cost down to $32 a share. It now trades at $63.
That&#8217;s not to say Zevenbergen never bets wrong or loses patience. She has recently liquidated positions in <a href="https://www.forbes.com/companies/pandora-media/" target="_blank" rel="noopener">Pandora Media</a>, LendingClub and <a href="https://www.forbes.com/companies/under-armour/" target="_blank" rel="noopener">Under Armour</a> at a loss and has <a href="https://www.forbes.com/companies/snap/" target="_blank" rel="noopener">Snap</a> and Blue Apron on watch.
Jim Martin, the former chief investment officer for the $1.1 billion-in-assets Murdock Trust, put $5 million with Zevenbergen in 1994 and stuck with her through the bad years. The trust now has $94 million under her management. &#8220;For investors who can stand that volatility, we&#8217;ve been rewarded,&#8221; Martin says, adding that with Zevenbergen&#8217;s high conviction you get &#8220;as much manager skill as possible to the bottom line.&#8221; &#8211; Written by <a href="https://www.forbes.com/sites/antoinegara/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Antoine Gara</a>, FORBES STAFF

Tag: Investment

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