A DUPUCH PUBLICATION OVER 60 YEARS OF EXCELLENCE An international supplement of the BAHAMAS HANDBOOK Fall/Winter 2019 New horizon for banking Real estate boom FDI drives growth in property Record-breaking tourism Visitor numbers hit new highs Deltec’s CEO Odetta Morton leads the way Future of funds Updated legislation creates robust funds industry Luxury yacht charters Five-star cruises to tour The Bahamas
4 The Bahamas Investor contents 18 Real estate boom in paradise sales rocket on the back of foreign direct investment 24 The sky’s no limit for international airport Lynden pindling International airport builds for the future 30 Big players drive investment cruise lines behind major new developments 34 The future of funds in The Bahamas securities commission creates a robust modern industry 38 Investment opportunities for Bahamians soar new platform enables locals to invest in global markets 40 Building Bahamian businesses small Business Development centre encourages local entrepreneurs 46 Grand Bahama attracts tech talent Global software company joins growing ranks of tech expertise in Freeport 50 Record-breaking tourism Visitor numbers soar thanks to new global campaign Volume 14, Issue 2 | Fall/Winter 2019 INVESTING BUSINESS WEALTH MANAGEMENT 58 A new horizon for banking in The Bahamas cEo odetta Morton at Deltec is a young Bahamian leading the way p a T r I c k r o B n s o n / © D U p U c h ON THE COVER EXECUTIVE FOCUS 7 Publisher’s message 9 Bahamas at a glance 10 In brief 14 Events 16 Bahamas map 17 Top 10 reasons to invest in The Bahamas 72 Real estate things to know 74 Bahamas Marketplace 77 Business Directory 81 Advertisers Index 82 Online INDUSTRY
54 Luxury yacht charters Five-star cruises to tour The Bahamas 58 A new horizon for banking in The Bahamas odetta Morton, cEo at Deltec leads the way 66 Abaco on the upswing hotels, tours and real estate driving an economic boom 70 Lyford Cay’s philanthropy Foundations 50 years of investment in education SECTOR WATCH ISLAND SPOTLIGHT LIFESTYLE EXECUTIVE FOCUS ETIENNE DUPUCH JR PUBLICATIONS LTD PO Box N-7513, Nassau, The Bahamas Tel 242-323-5665 • Fax 242-323-5728 e-mail info@dupuch com Copyright © 2019 ETIENNE DUPUCH JR PUBLICATIONS LIMITED All rights reserved No part of this publication editorial matter or advertising, may be reproduced or transmitted without written permission from the publisher DUPUCH PUBLICATIONS and the D device are registered trademarks of Etienne Dupuch Jr Publications Limited Prices and information in this book are subject to change Information in this publication was accurate at press time, June 1, 2019 The Bahamas Investor 5 c o U r T E s y E n G E L & V ö L k E r s Follow RSS feed to get the latest news and articles www.thebahamasinvestor.com 66 46 24 c o U r T E s y n a s s a U a r p o r T D E V E L o p M E n T c o M p a n y © B a h a M a s M n I s T r y o F T o U r I s M a n D a V I a T o n Also inside: Pages 77-80 Bahamas Business Directory a directory of businesses for investors. complete guide available at www thebahamasinvestor com 54 s a r a a p p L E T o n / © D U p U c h
in this issue, The Bahamas Investor focuses on the many strands of investment activity that are paving the way in creating a modern, robust and competitive international financial centre. From investment in real estate and infrastructure to developing local talent and updating financial services legislation, The Bahamas is working across all fronts to maintain and enhance its attractiveness for international investors
The cover feature takes a close look at a local success stor y. At just 42 years old, Bahamian Odetta Morton is heading up one of the jurisdiction’ s most prominent private banks, Deltec Bank & Trust Ltd “Deltec is a different kind of bank,” she says in the Executive Focus feature “I like to think of us as a bank that is just not your traditional private bank. We really are different. Deltec is an extremely innovative company and we are always tr ying to explore new boundaries ”
As well as human resources, there is much investment in real estate in The Bahamas and particularly across the second-home market as more foreign investors look to follow their money to paradise. The top stor y in the Investing section examines how overall residential sales throughout the countr y have increased by 48 per cent since 2014, with foreign direct investment as a critical component to The Bahamas’ growth.
Later in the same section, we look at the complementar y investment in the nation’s infrastructure, with the state-of-the-art Lynden Pindling International Airport (LPIA) leading the way Operated by Nassau Airport Development Co (NAD), The Bahamas’ premier airline hub has seen a massive multimillion-dollar overhaul over the last few years and with a runway revamp, expanding capacity and additional facilities all in the pipeline, investment in growth is ongoing
In her article in this issue, NAD president and chief executive officer Vernice Walkine notes that the airport processed more than 3 5 million passengers last year, an increase of 11 per cent over calendar year 2017 “Last year saw the highest year-over-year increase and the largest number of passengers to move through our facilities,” she writes. “LPIA was built for growth. To create more capacity, we are undertaking key measures at our facilities in the short- and long-term to better serve our passengers and stakeholders ”
Not only are more people coming to The Bahamas by air, there are also increasing numbers of cruise passengers. It’s a competitive market and the government is determined to maintain the countr y ’ s market share through key partnerships with major investors. The project with the biggest potential initial impact is the redevelopment of the Nassau Cruise Port in the heart of downtown Nassau, with UK-listed Global Port Holdings set to invest $250 million in the new facilities. The project will transform the dock area of the capital and create a landmark symbol of The Bahamas’ continued commitment to growth and modernization
The Bahamas Investor 7
c o u r t e s y s l a n d y a c h t s
The 100,000-square-mile (258,998-square-kilometre) archipelago of The Bahamas begins just 50 miles (80 km) off Florida’s east coast at the island of Bimini and stretches more than 500 miles (804 km) southeast in a chain comprised of some 700 islands and cays in the atlantic ocean Total land mass is estimated at 5,382 sq mi (13,939 sq km) The capital, nassau, is on new providence, while Freeport and Lucaya combined on Grand Bahama are regarded as the nation’s second city
Time zone History
Eastern standard Time*, same as new york, Boston, Miami and Toronto at 12 noon in nassau, it is 9am in Los angeles, 5pm in London, 6pm in Geneva, 1am in Beijing and hong kong and 2am in Tokyo
columbus became The Bahamas’ first celebrity visitor when he “discovered” the new World, landing on san salvador in 1492 over the next three centuries, the islands became key waypoints for explorers and adventurers along routes linking the old World with the new During the late 17th century, the islands became a hotbed of pirates and privateers who preyed upon merchant ships The Bahamas became an official crown colony of Great Britain in 1717 slavery was fully abolished in 1838 Limited self-rule was granted in 1964, and The Bahamas became an independent, self-governing nation on July 10, 1973, which is celebrated as Independence Day
Gover nment Economy Population
The Bahamas has enjoyed political stability since independence, and its popularly elected parliament traces its heritage to the house of assembly, which first met in 1729 The political system is based on the British Westminster model with a governor general, a prime minister and a parliament Queen Elizabeth II is the nation’s sovereign. The two primary political parties are the incumbent Free national Movement (FnM), which was elected by a landslide May 10, 2017, and had previously governed from 1992 to 2002 and 2007 to 2012; and the progressive Liberal party (pLp) which held power from 1967 to 1992, 2002 to 2007 and 2012 to 2017. Dr hubert Minnis, the nation’s fourth prime minister, presides over a 39-member parliament (35 FnM and 4 pLp).
The Bahamas, while actually located in the atlantic, is a member state in the caribbean community (carIcoM) secretariat, although not its common market. about 50 per cent of the country’s gross domestic product (GDp) is related to tourism, which employs over half of the workforce. new investments in hotels, resorts and developments range from billion-dollar megaprojects on new providence to distinctive communities in the Family Islands as an attractive locale for offshore banking and investment, the next biggest economic driver is the financial services industry, which accounts for between 15 and 20 per cent of GDp The construction industry drives 10 per cent agriculture and fisheries comprise less than five per cent of the economy Mineral resources are salt and aragonite
The 2010 census recorded the population at 353,658 The projected population for 2019 is 385,340. More than 70 per cent of the population resides on new providence. about three in 10 people are under 15; 69.6 per cent are between 15 and 64 years old; 6.9 per cent are 65 and older.
The Bahamas has carved out a specialized niche as a leading offshore financial centre, largely favoured by canadian, swiss and Us institutions. The Bahamas has around 250 licensed banks and trust companies. as of December 2017, 62 institutions are licensed to provide fund administration and around 151 are licensed to provide broker-dealer and/or investment advisory services. one of the greatest appeals of using The Bahamas as a domicile for corporate and financial services is its low-tax status; no taxes are levied on personal income, capital gains, corporate earnings, inheritance or dividends There is a value added tax (VaT) of 12 per cent on most goods and services
The Bahamas Investor 9
*Daylight savings time is observed from the second sunday in March to the first sunday in november
nassau Miami new york Los angeles Toronto London paris Geneva Beijing hong kong singapore Tokyo 12 noon 12 noon 12 noon 9am 12 noon 5pm 6pm 6pm 1am 1am 1am 2am EsT 185 miles 1,100 miles 2,520 miles 1,290 miles 4,330 miles 4,490 miles 4,680 miles 7,890 miles 9,070 miles 10,600 miles 7,625 miles 295 km 1,770 km 4,055 km 2,076 km 6,960 km 7,226 km 7,531 km 12,699 km 14,597 km 17,059 km 12,267 km *Daylight savings time is observed from the second sunday in March to the first sunday in november 1 6 The Bahamas Investor Global
relative time difference for 12 noon in nassau based on Eastern standard Time* and distances to major world centres GRAND BAHAMA ABACO BERRY ISLANDS BIMINI UNITED STATES OF AMERICA MIAMI 105 miles MIAMI 185 miles NEW PROVIDENCE ANDROS ELEUTHERA GRE EXU RAGGED ISLAND N At O Northeast Providence Channe Northwest Providence Channel Great Bahama Bank Little Bahama Bank Exuma Sound Tongueofthe Ocean Walker’s Cay Cooper’s Town Green Turtle Cay Treasure Cay Marsh Harbour Hope Town Cherokee Sound Moore’s Island Sandy Point Spanish Wells Harbour Island Gregor y Town Governor’s Harbour Rock Sound Little San Salvador (Half Moon Cay) A George Town Little Exuma Nicholl’s Town Nassau Paradise Island Alice Town North Bimini Freeport Lucaya South Bimini FLORIDA Miami West End High Rock Duncan Town Eight Mile Rock McLean’s Town Great Sale Cay Gorda Cay (Castaway Cay) Hole in the Wall Great Stirrup Cay Great Harbour Cay Little Harbour Cay Bonds Cay Whale Cay Chub Cay Joulter Cays Ocean Cay Cat Cay Lyford Cay Rose Island The Current Deep Creek Smith Bay Allan’s CaysHighbourne Cay Norman’s Cay Long Cay Staniel Cay Rolleville Moss Town Rudder Cut Cay Jumentos Cays Tarpum Bay Red Bays Fresh Creek Andros Town Cargill Creek Moxey Town Driggs Hill Kemps Bay
Islands of opportunity
Top 10 reasons to invest in The Bahamas
1 close proximity to major north american and Latin american financial centres
2 Within 50 miles of the world’s largest economy
3 same time zone as new york and Toronto (EsT)
4 peaceful and stable democracy since 1729
5 Independent nation with compliant legislation and consultative legislative approach
6 no local taxes on capital gains, inheritance, corporate and personal income, dividends and interest
7 proactive incentives for investment
8. highly trained industry professionals and an English-speaking workforce
9 Essential public services and modern infrastructure
10. Ideal climate and lifestyle with many islands and cays to explore
Numbers of note
• There are around 250 banks and trust companies licensed in The Bahamas, including subsidiaries of institutions originating from 21 countries, such as switzerland, canada, Brazil, spain, the Uk and the Us.
• These institutions have an asset base of nearly $200 billion under administration, according to The central Bank of The Bahamas
• There are approximately 4,000 people employed in the banking and trust sector
• More than 1,200 lawyers belong to the Bahamas Bar association
• More than 360 chartered accountants are licensees of the Bahamas Institute of chartered accountants (BIca)
The Bahamas Investor 1 7
SALVADOR R UM CAY AT MA LONG ISLAND
INAGUA North lantic Ocean el
CAT ISLAND SAN
MAYAGUANA ACKLINS GREAT
Arthur’s Town Cockburn Town
Samana Cay Clarence Town
Abraham’s Bay a
y New Bight
Colonel Hill Chesters Plana Cay
Delectable Bay Betsy Bay
paradise real estate boom in
Bahamian real estate firms are anticipating this year to be a banner one, thanks mainly to an influx of new residential developments and a surge of interest by foreign investors in the single-home and holiday rental markets.
According to a five-year study recently released by Engel & Völkers Bahamas, overall residential sales throughout the countr y have increased by 48 per cent since 2014 The report analysed more than 1,800 residential sales on The Bahamas’ listings and sales database, the Multiple Listing Ser vice.
“ The Bahamas’ real estate market generally follows the performance of the US real estate market and has experienced similar growth over the past five years, ” says the report. “[The year] 2019 will be a ver y dynamic year
both 2018 and 2019. It cut its economic expansion prediction for this year from 2.5 per cent to 2.3 per cent, while reducing its 2019 estimate by just 0 1 per cent–from 2.2 per cent. ”
New residential projects
Three major developments are under way, which are expected to boost Nassau and Paradise Island’s residential inventor y.
The GoldWynn condo-hotel and residences project, a $120 million development by Paul Wynn of The Wynn Group of Companies, is taking shape east of Goodman’s Bay, in the popular Cable Beach area a few miles west of downtown Nassau Construction on the project commenced July last year and is scheduled to be completed by December 2020.
for The Bahamas’ real estate industr y as a number of luxur y market condo projects break ground and bring a new volume of contemporar y amenity-driven real estate projects to Nassau and Paradise Island ”
The report also states that “foreign direct investment is a critical component to The Bahamas’ growth.” Due to this, the report says that “in October 2018, the International Monetary Fund chose to shave–rather than slash–its gross domestic product growth forecasts for The Bahamas for
Once finished, the condo hotel’s residential component, The Residences at GoldWynn, will comprise a five-storey, upscale boutique, beachfront development with 75 exclusive residences Amenities will include an infinity pool, rooftop terrace, state-of-the-art fitness centre, spa, tennis club, theatre and oceanfront dining, to name a few
Prices for the residences range from around $500,000 to more than $4 million. Additionally, buyers can opt in to GoldWynn’s onsite rental programme, where owners
sales of second homes and
properties are rocketing on the back of foreign direct investment
By Gillian Beckett
1 8 The Bahamas Investor INVESTING
“Overall residential sales throughout the country have increased by 48 per cent since 2014.”
can occupy their residence for up to three months per year, while enjoying tax-free rental income for the rest of the year. When opened, GoldWynn will operate under the Kimpton Hotel and Restaurant brand and be managed by Small Luxur y Hotels
Another condo-hotel project generating interest among real estate investors is One Particular Harbour at The Pointe, located near the British Colonial Hilton along the waterfront in downtown Nassau.
As part of China Construction America’s ambitious $250 million, six-acre development, One Particular Harbour will feature 126 studio, one- to four-bedroom residences, each boasting spectacular ocean views, spacious private balconies, refined décor and high-end fixtures Prices start at $900,000
Like the GoldWynn, The Pointe will also offer owners an opportunity to purchase select units as part of its rental programme Prices for rental residences begin at $350,000
Across from Nassau on Paradise Island, home of the Atlantis megaresort, the highly anticipated redevelopment of Hurricane Hole began with a groundbreaking in late Januar y this year and the start of vertical construction in Februar y.
The $250 million, 13-acre redevelopment is being undertaken by Sterling Global Financial, which acquired the property from Brookfield Asset Management, Atlantis’s owner, in 2018
About 250,000 sq ft of the redevelopment has been earmarked for residential use, while 50,000 sq ft will go towards retail, restaurants and office space
Described by developers as “ a city centre for Paradise Island,” the project is being built in three phases Phase One, known as Sterling Commons, is expected to be completed by June 2020 and will include an upgrade and expansion of the 90-slip marina, construction of 16 residential units, commercial retail, restaurants and offices
Residences at Sterling Common will range in price from $700,000-$900,000. The second phase–One Paradise Island–will include 50-70 residential units with prices ranging from $750,000-$1.6 million. More residences will be built during the project’s third phase, with prices set at $2.5-$6 million.
In his address to attendees at the groundbreaking ceremonies of the GoldWynn and Hurricane Hole projects, Prime Minister Dr Hubert Minnis praised foreign investors and the positive impact such developments will have on the Bahamian economy
The Bahamas Investor 1 9 INVESTING
GoldWynn’s Bahamas hotel and residences
Concept for The Pointe’s One Particular Harbour
c o U r T E s y G o L D W y n n c o U r T E s y G o L D W y n n c o u r t e s y t h e P o i n t e
Concept image of GoldWynn’s condo hotel and residences
Paradise Island’s Ocean Club Estates had the greatest jump, nearly $16 million in 2018 compared with $2 million in 2016 Meanwhile, the average sales price of luxury properties in Lyford Cay, Old Fort Bay, Sandyport and, in the island’s east, Port New Providence, ranged from below $2 million to $4 million plus
However, the boost in residential sales isn’t limited to New Providence. Other areas throughout The Bahamas archipelago are seeing an increase in sales activity, particularly the Abacos.
“Developments such as this demonstrate that investors continue to value The Bahamas as a world-class destination and an excellent place for investment,” said
Dr Minnis. “Over the next many years, the second-home market for Bahamians here at home, in the diaspora, and for non-Bahamians, will experience significant growth.”
Most popular properties
While the new condo-hotel projects and redevelopment of Hurricane Hole are expected to generate a sizeable boost to the capital’s real estate portfolio, there has also been a considerable uptick in sales of existing properties throughout New Providence
George Damianos, chief executive officer and managing broker of Damianos Sotheby’s International Realty says that “the most popular sales are taking place within the gated communities, including Sandyport and Old Fort Bay,” with the highest number of sales in the high-networth and ultra-high-net-worth markets at exclusive Lyford Cay and Albany, both found in western New Providence
Tim Rodland, broker and partner at Better Homes and Gardens Real Estate/MCR Bahamas Group agrees that the bulk of residential sales are taking place in the affluent gated communities on the island’s west end.
“In 2018, statistics show that the western side of the island, including locations such as Cable Beach and West Bay Street have shown to be some of the more popular areas in New Providence,” he says. “In the [market’s] higher end, locations such as Old Fort Bay and Paradise Island have shown to be the most popular.”
According to the Engel & Völkers report, the average sales price of single family homes and luxur y properties in Nassau and Paradise Island experienced an increase, 47 per cent since 2014.
Peter Dupuch, president and broker of ERA Dupuch Real Estate, says Abaco and Eleuthera are the front-runners for high-net-worth sales among the Family Islands, adding “there is a lot of interest for second-home owners in Bimini ”
Meanwhile, Damianos says that Hope Town, Guana Cay, Scotland Cay and Man-O-War Cay are the most popular for sales in the Family Islands. Properties listed in Abaco with Damianos Sotheby’s range from a $4 2 million, six-bedroom, six-bathroom estate in quaint Hope Town to a highly affordable $360,000, three-bedroom, three-bathroom single family home in the tiny picturesque island settlement of Man-O-War Cay
“In the Family Islands,” says Rodland, “Abaco has shown to be the most popular, representing 70 per cent of Family Island sales in 2018 ”
2 0 The Bahamas Investor
Groundbreaking ceremony for the Sterling Hurricane Hole Community Resort and Marina held on Paradise Island, January 2019 From left: Khaalis Rolle, senior executive vice-president, Sterling Global Financial; David Kosoy, chairman, Sterling Global Financial; Prime Minister Dr Hubert Minnis; Bill Green, president, Sterling Global Developments Ltd; Stephen Tiller, president and COO, Sterling Global Developments Ltd and K Peter Tur nquest, Minister of Finance
B E T T E r h o M E s a n D G a r D E n s r E a L E s T a T E / M c r B a h a M a s G r o U p c o U r T E s y D a M a n o s s o T h E B y s I n T E r n a T I o n a L r E a L T y
c o U r T E s y s T E r L I n G G L o B a L F n a n c I a L / c a y F o c U s p h o T o G r a p h y
“Foreign direct investment is a critical component to The Bahamas’ growth.”
An investor’s market
Investors from the US and Europe continue to make up the bulk of foreign investors looking to purchase real estate, mostly second homes, throughout The Bahamas, according to Dupuch When seeking investment properties, he says: “Potential buyers are looking for security and amenities. The more amenities, the higher the value of the property More people are now looking for vacation rentals that they can live in and also rent out when they’re not here Palm Cay [in eastern New Providence] is very successful in the short-term rental market.”
Damianos has also seen an uptick in investors recognizing the appeal of investing in vacation rental properties.
“I don’t think [potential buyers] are looking at properties so much as a residential investment, but a lot of homeowners are taking advantage of the short-term rental opportunities,” he says
An analysis by Engel & Völkers into rental properties in Paradise Island and Cable Beach over the past five years reveals the median monthly rent for Paradise Island was $3,500 per month with an average size of 1,784 sq ft, whereas Cable Beach rentals averaged $2,700 per month at 1,658 sq ft.
Bahamas realty celebrates 70 years
one of The Bahamas’ oldest real estate firms, Bahamas realty, is celebrating its 70th anniversary this year, culminating in $10 billion in sales.
Founded in 1949 as Bert L roberts Ltd, the company began four years after the second World War ended, the same year naTo was created, and when “the price of an average home was about $14,000,” says Larry roberts, son of Bert roberts and former chairman of Bahamas realty
In 1978, Bert L roberts Ltd merged with robin Brownrigg and Gordon Wilde, who had earlier taken over Bernard sunley & sons Ltd and were managing the company as caribbean Management & sales Ltd Three years later, as Bahamas realty, the firm was the first in The
Bahamas to offer a complete spectrum of services including appraisals, property management, sales and leasing services, and brokers
Today, Bahamas realty continues to offer a full suite of services–sales, leasing, appraisals, property management and consulting. additionally, the firm’s luxury sales record earned it affiliation with Luxury real Estate companies of the World and Leading rE Luxury portfolio.
Under its naI franchise, it manages nearly 1 million sq ft of commercial space including prime office, retail, dining and warehousing
“our 70th anniversary marks a milestone in the rich history of Bahamas realty, a company that has kept pace with the many legislative, policy and market changes and innovations that have transformed the industry,” says chief executive officer Donnie Martinborough
“We evolved from the early days of selling dreams of year-round sunshine and
“The rental market has done particularly well,” says Rodland, “ as we have seen an influx of demand, especially with expats coming to the island.”
Real estate professionals agree that The Bahamas continues to be an attractive choice for foreign investors looking to purchase property in the Caribbean region for many reasons
“Climate, its proximity to the US and the fact that it’s a little different, makes The Bahamas the ideal place for real estate investment,” says Damianos “[The Bahamas’] dollar-based currency is a plus and our beautiful beaches and cr ystal clear waters are second to none ”
“ There are a lot of exciting developments happening in and around The Bahamas, in particular New Providence, which makes The Bahamas a great lifestyle investment–in addition to the tax benefits the countr y has to offer,” adds Rodland
swaying palm trees to winter-weary tourists from England and Europe, to satisfying a savvy residential and commercial market ranging from young professionals to large corporate entities, first homebuyers to secondhome owners, and just about everything in between.”
2 2 The Bahamas Investor
c o U r T E s y D a M I a n o s s o T h E B y s I n T E r n a T I o n a L r E a L T y c o U r T E s y B a h a M a s r E a L T y INVESTING
Larry Roberts (left) and Donnie Martinborough celebrate at Roberts’s “semi-retirement” party from Bahamas Realty.
conchrest, old Fort Bay
The sky’s no limit for nassau’s international airport
Lynden pindling International airport builds for the future as passenger figures skyrocket
By Vernice Walkine
in 2018, we experienced unprecedented passenger growth at Lynden Pindling International Airport (LPIA) with air arrivals into Nassau/Paradise Island climbing to recordbreaking numbers Last year, our airport processed a total of 3,693,146 passengers, an increase of 11 per cent over calendar year (CY) 2017. The growth is significant because it represents the highest year-over-year increase and the largest number of passengers to move through our facilities since redevelopment began in 2007.
The first quarter of 2019 also showed strong numbers, with Februar y 2019 passenger numbers up 21 9 per cent year-over-year and March 2019 up 13 per cent over 2018 figures During the five-day period between April 18 (Maundy Thursday) and April 22 (Easter Monday), an estimated 75,000 passengers moved through the three terminal buildings at LPIA making it the busiest Easter peak period on record
2 4 The Bahamas Investor
c o u r t e s y n a s s a u a i r P o r t d e v e l o P M e n t c o M P a n y
Growth trends in air travel have resulted in strong performance in all passenger sectors, with US numbers up 13 per cent; international (non-US) up 17 per cent; and domestic travel up two per cent overall in CY2018 Our industry can credit tourism partners who have aggressively marketed the destination. The Bahamas Ministry of Tourism and Aviation, the Nassau/Paradise Island Promotion Board along with resort properties Atlantis, Baha Mar, Sandals and others are estimated to have spent more than $100 million on marketing.
The Baha Mar effect
New demand for The Bahamas as a tourism destination began to peak with the opening of the Rosewood property at Baha Mar in June 2018. This opening signalled the completion of the $3.4 billion megaresort on Cable Beach. The project encountered considerable delays and a change in ownership over the course of the redevelopment, but with the final phase
The addition of the 2,300 rooms at Baha Mar, as well as the proliferation of alternative accommodation options such as Airbnb, contributed to increased air arrivals into Nassau/Paradise Island.
From an airlift perspective, seat capacity at LPIA grew by four per cent in CY2018. Scheduled seat and flight
Airport Authority, US Customs and Border Protection, Nassau Flight Services, Air Traffic Services, Airline Operators, NAD Operations, NAD Parking and Ground Transportation, Airport Police and the Road Traffic Department
NAD continues to work closely with all stakeholders to ensure that the airport
complete, the resort marked a significant addition to the island nation’s offering
There were initial fears that the Baha Mar development would cannibalize Atlantis’s customer base but these have proven unfounded, as both properties have invested heavily in marketing campaigns that generated demand with distinct audiences.
capacity also saw a strong uptick at the beginning of 2019, with increases of 11 per cent in Januar y and 21 per cent in Februar y, primarily from the North American market
At LPIA, it used to be that when international arrivals reached approximately 5,000 passengers, we would flag it as a busy day in-terminal This past February, LPIA recorded nine days with international arrivals of between 6,0007,500 plus passengers On March 9, we broke all existing records, processing 8,245 arriving passengers through Bahamas Immigration and Customs
During the first quarter of 2019, our partners in the US pre-clearance facility at LPIA logged multiple 6,500-7,000 passenger departures days. We also realized record aircraft movements, totalling 13,114 in January this year and 12,386 in February, up 8.58 per cent over the previous year
To better manage growth in passenger movement from the curbside to the gate and vice versa, LPIA operator Nassau Airport Development Co (NAD) worked with airport partners to implement new standard operating procedures. Key to our execution of the plans to manage traffic at the airport are Bahamas Immigration, Bahamas Customs,
performs at a level that provides an exceptional arrivals and departures experience for our users. Our efforts are coordinated and focused on using increased manpower, existing technology and effective communication between agencies to improve the overall operations during peak periods And we ’ ve seen success, particularly over an extraordinary Easter travel period.
During that particular peak period, US Customs processed some 27,000 US departing passengers and Bahamas Immigration and Bahamas Customs processed more than 30,000 arriving passengers over the five-day Easter holiday period Domestic travel and other international departures accounted for more than 17,000 passengers.
Air traffic controllers also reported just over 2,500 total aircraft movements (take-offs and landings) during the same period. LPIA successfully executed an operations plan focused on processing areas including pre-board screening in the US Departures Terminal and the International/ Domestic Departures Terminal
To accommodate the high passenger numbers, airport agencies increased staffing levels and focused on queue management in four key areas–Bahamas Immigration, Bahamas Customs, Pre-board screening and US Customs and Border Protection
Even with the increased traffic to LPIA, our airport’s customer satisfaction ratings improved throughout 2018 and into 2019. This is significant. It indicates that while growth from a numbers standpoint is key to our overall success, as an airport community we are
The Bahamas Investor 2 5 INVESTING
“Last year saw the highest year-over-year increase and the largest number of passengers to move through our facilities…”
c o U r T E s y n a s s a U a I r p o r T D E V E L o p M E n T c o M p a n y
“Flamingoes” art installation by dede Brown
focused on providing the kind of experience our passengers have come to expect at LPIA
Out of a total of five points used in our customer sur vey, LPIA scored 4 36 and 4 34 for overall satisfaction for Q3 and Q4 2018 and 4 36 in Q1 2019. Moving for ward, we will continue to provide the level of ser vice that our passengers demand
Creating more capacity
LPIA was built for growth. To create more capacity, we are undertaking key measures at our facilities in the short- and long-term to better ser ve our passengers and stakeholders.
This summer, we will be adding more hold room seating and more food court seating in the US Departures Terminal and more food court seating in the Domestic and International Departures Terminal. Plans are also in progress for an additional inbound baggage carousel by late 2019/early 2020 and two additional apron drive bridges to Terminal C by the summer/fall of 2020
Technology will play a critical role in the future of travel at LPIA Already, US Customs and Border Protection is looking to make its pre-clearance facilities in Nassau one of the early adopters of biometrics technology to better process passengers and improve overall security screening
Capital improvements on our airside will also assist us with building capacity for future growth Plans are under way for a complete rehabilitation of Runway 09/27 and Taxiway India. We started
Out with the old
this major capital project in the early summer of this year and estimate between four to five months to complete the project This runway will then be designated as Runway 10/28.
During the rehabilitation period, LPIA will operate as a single-use runway airport, using Runway 14/32 only. We are putting contingency plans in place to facilitate our airside traffic during this period including the implementation of traffic management initiatives to manage air space saturation during peak periods. NAD will implement ‘planned’ and ‘demand’ runway maintenance on the open runway during this period to optimize use of the single runway. We also invested in new equipment to quickly remove disabled aircraft from the runway should the need arise during the period to mitigate the impact to aircraft operations
This May, we began a phased demolition of the former Domestic and International Terminal building–the final piece of the old airport structure still standing Built in the late 1950s, the old terminal opened for operation in 1957 Consideration is being given to building a dedicated Domestic Terminal on the site sometime in the medium-term future There is also the potential to use the space for additional aircraft parking for domestic carriers “upgauging” their equipment by changing or upgrading aircraft to a similar aircraft with a greater seat capacity In January this year, NAD issued a request for proposals seeking proponents to design, finance, construct and operate an on-site hotel at LPIA. The small hotel and multi-use facility is slated to sit on 4 68 acres of vacant land just northeast of the existing US Departures Terminal building at the airport
Throughout the RFP process, we have encouraged proponents to present a satisfactor y financial offer and design with the airport environment in mind Our goal is to select a partner that is focused on operation efficiency, passenger experience and building with sustainability in mind. Should the bidding and contracting process prove successful, we anticipate a 24-month construction period
In addition to the airport hotel project, LPIA’s 2011 Airside Master Plan is being updated with a target completion of August this year. The plan calls for a future parallel runway, which would require land currently not owned by NAD. In the spring, we
2 6 The Bahamas Investor
“We are laser-focused on operating and growing the airport to meet the capacity requirements.”
“royal native Welcome” sculpture by Keisha oliver directs passengers to the immigration hall
c o U r T E s y n a s s a U a I r p o r T D E V E L o p M E n T c o M p a n y c o U r T E s y n a s s a U a I r p o r T D E V E L o p M E n T c o M p a n y
“the Family” by Max taylor, international arrivals terminal
acquired Cabinet approval for 1,448 acres of land to be eventually transferred to NAD. This additional acreage would ensure that the airport has all of the land needed for growth well into the future, inclusive of sustaining commercial opportunities and zoned appropriately to prevent encroachment
Commercial expansion remains a key component of our revenue strategy. We signed a lease for a new Master Duty Free Concessionaire with Duty Free Caribbean (Bahamas) Ltd–a company affiliated with Dufr y, the world’s largest duty free retailer Construction is slated for completion in July this year The deal includes three stores; a walkthrough duty-free location in the US Departures Terminal that incorporates formerly unused floor space; a Hudson News store; and a duty-free store and kiosk located in Terminal ADomestic /International Departures and Domestic Arrivals The main store is slated to open August 1, with the other two stores opening mid-August.
These three locations represent a net increase in retail revenue to NAD of 23 per cent based on the company ’ s first year performance projections
As passenger numbers grow, we are also seeing success in existing commercial outlets Our Lignum Lounge concept has exceeded budgeted revenues by 19 per cent in the fiscal year-to-date.
British Air ways passengers (Club Class) and priority pass primarily fuel strong numbers in the commercial space Despite the small footprint and a capacity of 55 passengers, the lounge is performing well. In the near future, the space will be reconfigured to increase seating capacity by 30 per cent or another 15-20 seats.
Investing in the future
Employee training remains a high priority item for NAD as the dynamic airport environment evolves
When scheduling training, we looked at the anticipated company needs, as well as international standards and requirements needed by LPIA for certification, and to compete with airports in the region
This past fiscal year, seven team members received professional certification in disciplines ranging from risk analysis to Cisco Systems to renewable energy Another six NAD operations team members completed Airports Council International certifications to ensure compliance with local and International Civil Aviation Organization requirements. A total of 20 NAD team members also participated in professional seminars locally and abroad.
LPIA continues to position itself as a major player in the aviation sector in the region and globally within our size categor y (2-5 million passengers annually) As the major gateway to Nassau/Paradise Island, we understand our role in a tourism product that continues to evolve and is still in high demand. We are laser-focused on operating and growing the airport to meet the capacity requirements now and in the future.
Walkine is president and cEo of nassau airport Development company (naD), a position she has held since 2013 she joined Vantage airport Group (formerly Vancouver airport services) in 2010 as vice-president of marketing and communications at naD. Walkine has more than 30 years of experience in tourism development and marketing and was previously director general of the Bahamas Ministry of Tourism. she holds a Bachelor of arts degree in foreign languages from Elmira college, Elmira, ny, and an MBa from the University of Miami
2 8 The Bahamas Investor
c o U r T E s y n a D
recognize The Bahamas as prime destination Big players
cruise lines are behind major new developments across the archipelago
By Jessica robertson
during the first two years of its five-year term, the Dr Hubert Minnis administration has announced an almost constant stream of major projects that, when complete, will give the Bahamian economy a significant boost The money and the drive behind the most impressive expansion plans is coming from one of the countr y ’ s oldest and most significant tourism partners–the cruise line industr y.
With hundreds of millions of dollars on the line, some of the biggest players in the resurgent cruise industr y are demonstrating that they recognize the strategic importance of The Bahamas as a destination, investing in major infrastructure and developing new ports of call throughout the countr y to maintain their own competitive edge.
Nassau Cruise Port transformation
The project with the biggest potential initial impact is the redevelopment of the Nassau Cruise Port in the heart of downtown Nassau
Major cruise lines joined forces to submit a bid for the redevelopment and management project, but the government opted to avoid a potential conflict of interest and instead selected UK-listed, Turkey-headquartered Global Ports Holding.
With a total of 3 7 million visitors arriving in Nassau via cruise ships each year, the new port will be the largest in Global Ports Holding’s vast international portfolio From the outset it will increase the company ’ s passenger volume by 50 per cent and it intends to push those numbers beyond five million annually with a $250-million investment
The plan will transform the cruise port from a simple dock where visitors get on and off their ships without much fanfare into a destination in itself, complete with open air amphitheatre featuring local and international entertainment, restaurants, retail outlets and other amenities
3 0 The Bahamas Investor INVESTING
“A total of 3.7 million visitors arrive in Nassau via cruise ship each year.”
The plans also call for the addition of two more berths to accommodate more and larger ships at the capital city’s premier port of call.
The two sides are working feverishly to finalize agreements and have permits and approvals in place for construction to begin in September this year The targeted completion date is October 2021
As a further nod to the significance of The Bahamas addition to its portfolio, Global Ports Holding has announced plans to make Nassau the home of its regional office covering ports in North and South America
Disney to add second private destination
The cruise line-affiliated project that has stirred the most debate is the proposed development of Lighthouse Point, Eleuthera This out-of-the-way southern tip of the Family Island, with white cliffs and sandy beaches
surrounded by turquoise ocean, is viewed by many Bahamians as one of the most spectacular, untouched places in the
Disney Cruise Lines thinks it is special too and purchased the land from a private owner, intending to develop a second private destination
The Bahamas Investor 3 1
INVESTING © G l o B a l P o r t s h o l d i n G P l c / B e r M e l l o a J a M i l & P a r t n e r s , i n c
From left: Charles Albury, permanent secretary, Ministry of Tourism and Aviation; Dionisio D’Aguilar, Minister of Tourism and Aviation; Mehmut Kutman, chairman, Global Ports Holding and Anthony Ferguson, president and founder CFAL
artist’s rendering of part of the proposed
© B a h a M a s M I n s T r y o F T o U r I s M a n D a V I a T I o n / k E M U E L s T U B B s
Prince George Wharf nassau cruise Port development
long talked about cruise port. The idea was first bandied around more than ten years ago and a heads of agreement was signed and announced by then Prime Minister Perry Christie just days before he lost control of the government
in The Bahamas to accommodate its rapidly growing fleet.
In response, local residents launched the Save Lighthouse Point campaign Various groups joined, hoping to highlight proposals for sustainable land use or calls to leave it untouched
The back and forth dominated the headlines for months and finally in March, the government gave Disney the nod to push ahead, but not without major concessions
In a statement following the signing of the heads of agreement, Prime Minister Dr Minnis said: “ The government of The Bahamas is satisfied that it made the best decision in the interest of the Bahamian people, a sustainable future for the people of Central and South Eleuthera and the economic development of the countr y. ”
To push the deal over the line, Disney agreed to donate 190 acres of the 700 acres of land to the government for development as a national park The donated land includes the iconic and much photographed southern tip. The deal also ensures that Disney will continue to grant Bahamian citizens and residents access to the property.
Even still, the proposed $250-$400 million dollar low density project will not get underway until an environmental impact assessment and environmental management plan have been conducted and approved by the relevant authorities
One island project that is already up and running is Royal Caribbean’s private
island destination complex Perfect Day at CocoCay. Exclusive to its cruise passengers, the $250 million development is now a highlight on the cruise line’s tours of the region, with attractions such as a 135 ft high waterslide, the Caribbean region’s largest wave pool and freshwater Oasis Lagoon.
Grand Bahama resurgence
Grand Bahama’s tourism product has been underperforming for a number of years, but two major announcements recently have grabbed the attention of residents, giving hope that a turnaround is on the horizon.
First was the announcement that Carnival Corp is pushing ahead with its
However, the project seems to be once again moving ahead The proposed $100-million port will be located on 329 acres near the University of The Bahamas’ northern campus in eastern Grand Bahama and will be Carnival’s largest wholly owned port in the world–capable of accommodating two of the largest cruise ships at the same time, increasing the number of guests to Grand Bahama significantly
Promising to develop in a sustainable manner, Carnival has earmarked a significant area of the property to remain untouched.
The Grand Port, which is its working title at this time, will put Grand Bahama on the map as one of the largest cruise ports in the Caribbean region
Thousands of construction jobs will be generated and once open in 2021, the new port will provide hundreds of
3 2 The Bahamas Investor
M a T T s T r o s h a n E
c o u r t e s y h G c h r i s t e l t d
lighthouse Point, eleuthera
disney cruise line’s Disney Magic frequently sails to the Bahamas
Grand Bahamians with employment and entrepreneurship opportunities
“After many years of economic stagnation there is a new spirit of revival of hope for Grand Bahama,” said Dr Minnis
Not long after that news got Grand Bahama buzzing, Royal Caribbean Cruise Line and Mexican port, hotel and amusement park developer ITM Group signed a letter of intent with the Bahamian government to purchase the Grand Lucayan resort and redevelop Freeport Harbour
The hotel, one of the largest on the island, has been almost completely closed since Hurricane Matthew caused extensive damage in 2016. To kick-start its redevelopment, the government bought the property from Hutchison Whampoa in 2018. The resort ’ s overhaul could be
what enables the prime minister and his team to justify the controversial decision and help turnaround the island’s fortunes.
The port proposal includes construction of additional berths, possibly doubling the number of ships it currently accommodates and potentially leading to an additional two million visitors annually
In early March this year, the
prospective developers and government entered into a 90-day discussion period to hash out the way for ward. The $195 million transformation of the port and the island’s signature hotel is expected to take at least 24 months once all plans have been approved.
The Bahamas Investor 3 3
Prime Minister Dr Hubert Minnis
J U L I a p a M E s / © D U p U c h
Grand lucayan resort
The future of funds
in The Bahamas
securities commission of The Bahamas overhauls investment funds legislation to create a robust and modern industry
By christina rolle
on March 6 this year, Deputy Prime Minister and Minister of Finance K Peter Turnquest presented in the House of Assembly the long awaited Investment Funds Bill, 2019 The debate and passage of the Bill is the culmination of more than two years of drafting, consultation and redrafting undertaken by the Securities Commission of The Bahamas with the intention being to completely overhaul and expand the scope of the investment funds industry in The Bahamas
For the commission, this journey started in July 2016 with the appointment of a project team consisting of the commission, external legislative drafters and legal advisors as well as leading industry professionals
At that time, the commission’s expressed aims for the overhaul was to:
1. address legislative gaps which were identified during international as well as internal reviews with the goal being to create a best in class legislative environment;
2 benchmark and develop a regulatory regime that would improve The Bahamas’ competitiveness against leading jurisdictions in the funds space, particularly, institutional funds; and
3 develop AIFMD/EU compliant provisions which would enable Bahamas-based funds and fund
managers to be able to continue to market themselves within Europe and position The Bahamas for the EU passporting process once it resumes
Addressing legislative gaps
In 2012, The Bahamas underwent a financial stability assessment which identified key gaps in the legislative regime for investment funds Some of the main areas to be addressed centred around the licensing and oversight of key participants in a fund structure including the fund operator and promoter, investment manager as well as custodian. The principles set out by the
investors In the case of funds marketing themselves to accredited investors only, a registration of the investment manager with the commission is required at a minimum This registration of the investment manager would bring the investment manager within the scope of regulatory oversight as the commission would then have the ability to object to or request a change in investment manager, as may be appropriate, while at the same time giving accredited investors the flexibility to choose an investment manager they are comfortable with Of course, in the case of funds marketed to retail investors, the licensing standard is obligatory in order to address investor protection concerns.
International Organization of Securities Commissions (IOSCO) requires standards to be put in place to address how each of these conduct their activities. Also required are ongoing oversight for each Under the Investment Funds Act, 2003 there was no requirement for the fund manager to be licensed by the commission
The IFA, 2019 now requires that investment managers be licensed for all funds marketing themselves to retail
The new investment funds legislation also sets out standards for the appointment of custodians to a fund and significantly addresses the activities of the fund operators. Minimum standards with respect to the management and valuation of the underlying assets of an investment fund are established with the aim of ensuring the appropriate level of protection for a fund’s investors
In revamping this regulator y framework, the commission looked at the fiduciar y responsibilities, as well as the appropriate ongoing reporting
3 4 The Bahamas Investor
“The intention being to completely overhaul and expand the scope of the investment funds industry in The Bahamas.”
obligations of each of the players. We benchmarked the regulator y oversight against the leading jurisdictions in the industry. In the end, The Bahamas’ funds legislation and regulatory environment
establishes a regime which includes appropriate frameworks for the licensing, ongoing supervision (onsite and offsite examinations), investigations and enforcement of regulator y and supervisory requirements, as may be appropriate for all of the various investment fund participants
Improving the competitive landscape
To improve The Bahamas’ visibility and selection as a jurisdiction of choice for both private and institutional investment funds, the overhaul project took a hard look at the challenges faced by The Bahamas over the years and, in as far as it was possible, tried to make improvements throughout the legislative and regulatory infrastructure We sought to address those challenges and remove barriers that may have been inadvertently hindering the industry’s growth
One particular area the new legislation sought to revamp was the centring of fiduciary risks and responsibilities around the investment manager as opposed to the old structure under the IFA, 2003 which placed the principal office, that is, the fund
administrator, as the focal point. While this old view has its roots in the historical development of The Bahamas’ industry, it was long past due that we move away from it and appropriately and adequately provide for the effective oversight of asset management activity and by extension, the investment manager where the fiduciary obligation should lie
The previous lack of oversight of the investment manager meant that the legislation had to assign fiduciar y responsibilities to another player and to the consternation of the fund administrator, that responsibility fell
to them. The inappropriate recognition of the administrator’s role versus the investment manager ’ s responsibilities perpetuated an imbalance that proved too onerous for the administrators of large institutional funds We had to correct this imbalance if The Bahamas is to be an attractive jurisdiction in the institutional arena
The Bahamas Investor 3 5
Poinciana house on east Bay street is the new headquarters of the securities commission of the Bahamas
P a t r i c K r o B i n s o n / © d u P u c h
“The financial services sector provides a critical element for the economic development of The Bahamas…”
c o U r T E s y c h r s T I n a r o L L E
Christina Rolle, executive director, Securities Commission
The legislative overhaul has also sought to rationalize the oversight of Bahamas-based versus non-Bahamasbased funds by reviewing the criteria by which a nexus for regulation ought to be created The first step in this rationalization is the creation of the trigger for licensing which is now either an investment fund which is incorporated, registered, established or has its governing law in The Bahamas or a fund that is selling itself to retail investors in The Bahamas
In all of these instances, an investment fund is considered to be Bahamas-based and therefore requires licensing in The Bahamas By contrast, the non-Bahamas-based fund has been reduced to the definition of a fund whose administrator or investment manager is licensed in The Bahamas
In this instance, the administrator or investment manager would simply advise the commission that they are acting on behalf of such funds This notification would enable the commission to have full regulator y
oversight of the activities of its licensees without attempting to engage in extraterritorial regulation
Based on the triggers for licensing, which creates definitions of Bahamasbased versus non-Bahamas-based funds, the categor y of Recognised Foreign Funds has been rendered obsolete and therefore does not exist in the new legislation
Another key feature of the new legislation is the ability of a Bahamasbased investment fund to appoint an administrator from any recognized jurisdiction in the world. Once appointed, the administrator would then appoint a Principal Office in The Bahamas. The definition of Principal Office, in turn, is the address of the fund, with the complete removal of all fiduciar y responsibilities which existed under the previous legislation Other improvements also include definition and clarity around self-administered funds These changes were the bare minimum requirements in order for The Bahamas to modernize its funds legislation and regulator y environment.
Preparation for EU passporting
On July 22, 2011, the directive 2001/61/EU on Alternative Investment Fund Managers (AIFMD) entered into force in the EU
The directive creates a comprehensive and effective regulatory and supervisory framework for alternative investment fund managers (AIFMs) within the EU, as well as establishing certain regulatory requirements for non-EU AIFMs that provide services to EU investment funds
The European Commission adopted a number of the provisions of the directive for implementation in July 2012 which were incorporated into the national laws of member states. The rules of the
3 6 The Bahamas Investor
c o u r t e s y s e c u r i t i e s c o M M i s s i o n o F t h e B a h a M a s
Attor ney General and Minister of Legal Affairs Carl Bethel (front row, 4th from left); Christina Rolle, Securities Commission of The Bahamas executive director (front row, 5th from left); and Deputy Prime Minister and Minister of Finance K Peter Tur nquest (front row, 6th from left) welcome participants in the FATF Standards Training Course
AIFMD therefore became applicable to AIFMs as from July 22, 2013.
The AIFMD also applies to non-EU AIFMs that manage or market AIFs in the EU. Thus, Bahamian investment managers to EU funds are impacted by and subject to the requirements of the AIFMD
The Bahamas has already engaged with and executed 28 Memorandums of Understanding with EU member states in order to facilitate participation in their respective countries However, as part of the broader regulator y framework for AIFs in the EU, the directive provides for an EU passport for non-EU AIFMs The passport will enable non-EU AIFMs to enjoy the same rights and subject them to the same obligations, as EU-based AIFMs While the directive does not require that the non-EU country, where an AIFM is established, must have AIFMD-equivalent rules, the non-EU AIFMs must be able and willing to operate in the EU in compliance with rules established in relation to the AIFMD It should be noted, however, that as of this writing, the substance requirements under the EU’s Base Erosion and Profit Shifting initiative is requiring non-EU territories to have AIFMD-equivalent rules by analogy.
There was a certain degree of urgency for the commission in performing this review within the context of AIFMD/EU passporting developments. While meeting international standards, The Bahamas must also maintain its capacity to conduct business within jurisdictions relevant to the Bahamian industry by meeting the various regulatory oversight requirements which have been established by those jurisdictions with which our industry is interested in conducting business We are now confident that the new legislation complies with standards which would enable granting of the EU passport While this still appears to be a moving target, we have done all we could to benchmark, consult and include all relevant EU requirements.
The commission has also reached out to the European Securities Market Authority (ESMA) to seek review in ESMA’s next round of assessments for passporting once the process resumes
It is certainly true that the goals for the overhaul of the Investment Funds Act were extremely ambitious. It was imperative though that The Bahamas rose to the challenges of these goals not only to build on its historical successes as an investment funds jurisdiction, but also to forge a new identity as an international financial centre and ensure its survival in the face of increasing global standards and shifting goal posts
The financial services sector provides a critical element for the economic development of The Bahamas as it has been seen to support the middle class with salaries averaging three times the national average We must ensure the viability of this sector for the continued economic growth of The Bahamas and in order to do this, robust and modern legislation is just the beginning
christina rolle was appointed executive director of the securities commission of The Bahamas in 2015. she has more than 20 years of experience in the financial services industry, having held various senior managerial positions with local and international institutions rolle was a member of the FaTca advisory group for the government and has served on the board of directors of The Bahamas Financial services Board and the society of Trust and Estate practitioners Bahamas branch
The Bahamas Investor 3 7 WEALTH MANAGEMENT
c o U r T E s y c h r I s T n a r o L L E
for Bahamians Investment opportunities
new platform gives Bahamians chance to invest in global markets
For decades, Bahamian professionals served the wealthy and their wealth managers, laying the reputational foundation and building blocks of The Bahamas as one of the world’s leading financial ser vices jurisdictions Yet even as they helped create asset management plans, worked in trading rooms and designed institutional, as well as individual, trusts they had limited opportunities for investment themselves outside The Bahamas. All that changed with one dramatic move in 2018 when The Central Bank of The Bahamas, the monetary governing body, which had been gradually easing Bahamians’ ability to transfer limited funds for several years further relaxed foreign exchange regulations The latest step was a long forward leap in liberalization and as of the second quarter of 2018, Bahamians could not only take up to $10,000 in cash for personal reasons when travelling abroad, but they could now invest in global markets, taking the same risks, enjoying the same opportunities as those they had helped for half a century or more
Ready for change
If suddenly Bahamians were being allowed to seek a piece of the global economic pie without paying prohibitively high repatriation fees, entities had to be ready to serve that public, and it was little surprise that Cornèr Bank was prepared With a more than 23-year presence in The Bahamas and two locations to serve east and west clients in New Providence, along with its parent bank’s reputation in Switzerland for financial soundness, Cornèr spent two years prepping for the day when Bahamians, many of whom worked in their offices, would enjoy the privileges that their offshore clients and other residents did
The bank launched its Cornèrtrader platform in September 2018, inviting 100+ guests to a cocktail reception at the Baha Mar Convention Center where there was a live demonstration of trading with the Cornèrtrader online trading platform.
“There was a sense of excitement as Bahamians who understood the power of global markets got the opportunity to experience it in real time,” says Russell.
“It was a milestone in the life of Bahamian financial culture, democratizing the economy in a historic way, ” says Christine Russell, chief executive officer, Cornèr Bank (Overseas) Ltd “It opened the doors for Bahamians to enjoy greater opportunities for investment than ever before. For the first time, people of ordinary means would have the right to participate in world markets No longer are we just consumers, we can be owners ”
The introduction of global trading for Bahamians was fortuitous in several respects Firstly, it coincided with an overall improvement in the economy Housing sales were up, property values were rebounding following the slow recovery from a global recession a decade earlier and employment rates, except among young males, were trending upward. In Grand Bahama also, there were signs of economic revival Secondly, a growing younger population meant more potential clients possessed the confidence independent trading takes, though Cornèr would later introduce an advisor y product as a bridge to assist with the confidence gap.
3 8 The Bahamas Investor WEALTH MANAGEMENT
“Bahamians could now invest in global markets, taking the same risks, enjoying the same opportunities…”
All said, the economic climate was right for a new trading platform “We are passionate about what Cornèrtrader can offer; its ability to provide access to a wide variety of trading products, real-time news/analysis, watch list capabilities and, most of all, its portability,” Cornèr Bank chairman Luca Salzborn said at the launch. “Cornèrtrader is a flexible portfolio management tool, allowing the user to trade at home or on the beach, while providing the opportunity to prudently build a diversified, multi-asset portfolio We are committed to offering to all our existing and prospective clients continuous education with seminars or one-to-one meetings about markets and the use of our platform as we believe that a key element for successful investing lies in mastering the technical and financial aspects that go with it ”
Local access to international markets was not completely foreign to Bahamians
Local brokerage houses continue to offer mutual funds that include some percentage of international investments The difference is that the investor does not have the opportunity to make his or her choice as to what to invest in. The introduction of the new platform changed this, allowing the investor to pick and choose and trade as often as they like, 24/7 and fully independently once they open an account with the bank. Although clients have the freedom to invest through any of the major world stock exchanges, most have stuck close to home, favouring the New York Stock Exchange, at least in the eight months since the launch, according to Cornèr Bank
which this has been met is an indication of the sophistication of the Bahamian population and the desire to be part of a wider world of investment.”
But not everyone was confident enough to tackle investing on their own despite the wealth of educational material and up to the minute data on companies available That hesitation on the part of would-be investors motivated Cornèr to create investment advisory accounts. Those clients receive investment proposals and advice from their account officer based on their personal risk profile, their long- and short-term goals and their requests The hand-holding has helped ease fears about diving into investment.
Cornèr also launched what it terms Discretionary Investment Management Accounts in which the bank manages the account on a discretionary basis based on its best judgement and experience for client risk profile
Most recently, Cornèr Bank Bahamas launched its My Cornèr app which provides clients access to their respective Cornèrtrader or private banking investment account from their mobile device “We aim to provide our clients access to the latest technological advances where possible to make access to trading and investment easier,” says Russell
Reception to the opportunity “exceeded all expectation,” says Russell “We knew there would be a lot of interest because people had been asking for the right to invest in global markets for a long time But old habits are hard to break and going independent, deciding on your own where to place your money and your trust, was not something that Bahamians had experienced before. We thought the initial activity would involve a lot of queries and account openings would slowly follow We believe the success with
Cornèr executives know they may have a niche in the market now, but competition is likely to follow “It gives us even greater satisfaction to know that Bahamians have the right and privilege to invest in global markets,” says Russell. “The right to invest is a right to participate, a coming of age, representing in our personal finances what the right to vote did in our political and social lives ”
The Bahamas Investor 3 9
“The right to invest is a right to participate, representing in our personal finances what the right to vote did in our political and social lives.”
c o U r T E s y c o r n è r B a n k ( o V E r s E a s ) L T D / r o n n E a r c h E r
Christine Russell, CEO, Cor nèr Bank (Overseas) Ltd
Bahamian businesses Building
heading up the small Business Development centre, Davinia Blair is at the heart of an initiative to encourage local entrepreneurs
Interview by steve cotterill
4 0 The Bahamas Investor WEALTH MANAGEMENT
the small Business Development Centre (SBDC) is part of an initiative by the government of The Bahamas to cultivate the nation’s entrepreneurs and business talent to help grow the economy and build for a sustainable future
The SBDC is the result of a tripartite arrangement between the Ministry of Finance, the University of The Bahamas and The Bahamas Chamber of Commerce and Employers’ Confederation.
The centre works to guide the development and funding of small and medium-sized enterprises (SMEs) throughout the countr y and help prospective entrepreneurs realize their dreams of business ownership, as well as aiding existing businesses to remain competitive in a complex, ever-changing national, regional and global marketplace.
Davinia Blair, who was appointed executive director of the SBDC in June last year, offers some insight into the aims of the initiative and the government ’ s vision for the future of Bahamian businesses
Q:What was the thinking behind the creation of the SBDC?
A: The government has been charged with stimulating the economy through creating employment, among other things Traditionally, foreign direct investment (FDI) has been the main conduit to achieve this, rather than through domestic investment
However, in regards to sustainable investment, the government looked at new models to encourage local people to create their own businesses so that Bahamians can invest more readily in their own economy, contributing through employment, local commerce and business-to-business activities.
Expanding and encouraging small businesses is an easy method to create sustainable growth and one that has been used around the world, in many cases accounting for the lion’s share of employment. Even before our current efforts, registered small businesses in The Bahamas employed just under
50 per cent of the workforce and generated 20 per cent of the countr y ’ s overall revenue, supporting a significant percentage of the population.
If the centre, as envisioned by the government, is able to strengthen existing businesses and expand the number of small enterprises creating employment for Bahamians, then I think we have an economy that can sur vive international shocks much more successfully than the FDI model
have around 3,500 registered clients, about 14 advisors and seven or eight full-time staff
The second major and ongoing challenge is that we are still in the process of cultivating the entrepreneurial ecosystem in The Bahamas Ecosystems ever ywhere are always evolving, but in The Bahamas we are at the point where we need a clear strategy to bring us up to speed.
Q:What resources are available for the programme and how is it funded?
A: The government has provided $1 million for operational expenses and $4.5 million in additional finance to directly benefit entrepreneurs There is also a commitment from the Bahamas Entrepreneurial Investment Fund, which is a government equity fund, to make available $750,000. Of the $4.5 million, $50,000 will be distributed in grants and the rest will be used as leverage for a loan programme with the banks. Through our relationship with local banks we will be able to yield $9 million in loans
Q:When the centre opened in September last year, what were the initial challenges?
A: We launched the centre on September 20 and by September 24 we had our first client registered. The main challenge in setting up operations was that there were a lot more people interested in the programme than we had originally planned for As a consequence, we had to increase our staff complement quite quickly to manage the demand Even now we have a significant waiting list At present we
Another challenge is that we have entrepreneurs coming into the centre looking at creating a brand new start-up and the whole idea of the “minimal viable product” is something alien to them. They have a lot of great, big picture ideas, but little concept of how to achieve them We have to manage those expectations. We are having to do a lot of training around setting up the initial portion of the business so that they can prove themselves as entrepreneurs, and trial their systems, operations and financial management Then we can help them grow over time to achieve the major vision they have for the business That has been a bit of an uphill struggle, but our clients are learning.
Q:In what areas of business are you seeing the most interest?
A: We are definitely seeing a concentration of start-ups in the ser vice industr y and generally they have some connection to tourism After tourism, the food and beverage industr y and the creative arts; it is ver y diverse. We are seeing all sorts of ideas in all sorts of industries, which is great because it means that our entrepreneurs aren ’ t taking a narrow-minded view about how they want their business to contribute to the economy. We are
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“Expanding and encouraging small businesses is an easy method to create sustainable growth.”
seeing new technologies, manufacturing, alternative energy projects and any number of innovative projects. Even within the major industries we are seeing a lot of innovation and interconnectivity with other sectors
Q:What is your role in the initiative?
A: My role is really to take a bird’s eye view I don’t directly manage the advisors but I am responsible for their output so I have to inspire them, equip them and monitor their accountability Then we have an operations team that I am responsible for and which I help to direct in terms of new strategy, processes and policies to overcome any challenges and maximize opportunities.
Then there is also the funding and governance side, so we have to make sure we are fulfilling our board and government commitments.
On top of this there is the publicfacing element There is a level of accountability and people in general want to know how things are going.
The Bahamas is made up of many islands spread over a large area and we have to deliver the programme with the same efficacy across all the islands It is quite difficult to keep ever yone, ever ywhere happy. It requires a lot of skill building and you have to attract and retain the right talent
Q:What has been the take-up of your services in the Family Islands?
A: It is almost 50-50 between New Providence and the Family Islands Nassau accounts form around 50 per cent of our clients; Grand Bahama around 25 per cent; and the rest are spread across the major islands Abaco is the next largest, then Andros, Eleuthera and Exuma. It is ver y much a programme
for the whole of The Bahamas, not just for New Providence
Q:What are your clients looking for and what are your core services?
A: The first question entrepreneurs usually ask is “how soon can I get the money?” After that we get into the real matter of building the business plan and outlining their vision. We have to start with the language of business, so that we understand what we are talking about when looking at the core concept of the business. So far, the major deliverable has been around teaching those basics of business We have trained nearly 500 people through our two-week programme of classes and a further 200 or 300 are doing substantial hours with our one-to-one business advisor y ser vices
However, we can ’ t just focus on the clients we have now. We have to think about the future generations of entrepreneurs So we have put considerable efforts into building awareness about business, concepts at
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Deputy Prime Minister and Minister of Finance K Peter Tur nquest (centre), along with Kevin Darling of RBC Royal Bank of Canada (left) and Geoffrey Andrews, chair, Small Business Development Centre, sign an agreement enabling micro, small and medium-sized businesses to access funding following training
Blair assists an entrepreneur at the sBdc
the primary and high school levels so that by the time these individuals are ready to start their own businesses, certain concepts are not foreign to them
Q:Howdo you see the initiative developing?
A: In two or three years ’ time we will have passed several major milestones We will have successfully pursued the introduction of legislation for sustainable SME development support and policies that help to bolster such development. We will be working on that over the next 18 months
We will also be looking to adapt the funding model. For start-ups, we really need to develop more of an equity model than the debt model that we currently have. We are looking to attract equity funds for our clients and promote crowdfunding We want to be able to share the benefits and the risks involved with start-ups.
At the moment we have a concentration of financial institutions as investors, but we want to open it up to credit unions, private entities and eventually to individual Bahamian and international investors that are looking to invest in emerging markets and in our companies For me that would be a huge win. We want to turn
the whole concept of access to capital away from having four or five institutions deciding everything, to
giving more people the chance to vie for the opportunity to invest in our companies
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Prime Minister Dr Hubert Minnis cuts the ribbon to officially launch the Small Business Development Centre (SBDC). In attendance from left: Davinia Blair, executive director, SBDC; Patricia Minnis, wife of the prime minister and Geoffrey Andrews, chairman, SBDC
By Catherine Morris
BUSINESS 4 6 The Bahamas Investor attracts tech talent Global software company joins the growing ranks of tech expertise in Freeport
Grand Baha P H O T O S F R O M L E F T © B A H A M A S M I N S T R Y O F T O U R I S M A N D A V A T I O N , © B A H A M A S M I N I S T R Y O F T O U R I S M A N D A V I A T I O N , C O U R T E S Y P O 8 S H U T T E R S T O C K / R A I G V I
When DevDigital, a Nashville-based software and web development company, established in 2018 by co-founders Peter Marcum and Mitch Ballard, was looking to expand and create a Bahamian subsidiary, Freeport was the logical choice for its new headquarters
“We love Freeport,” says DevDigital Bahamas partner Alan Kates “There is a place in The Bahamas for a company such as ours and this was the perfect opportunity to expand Investors in Freeport are being supported and given exceptional treatment. ”
DevDigital is one of the latest wave of investors lured to Freeport by the Commercial Enterprises Act, 2017. The legislation, which came into force last year, is central to the government ’ s push to transform Grand Bahama into a technology hub as it offers incentives to investors in this sector, including those involved in computer programming, nano-technology, data storage and software design
“When we saw this legislation, it was a great step, ” says DevDigital Bahamas copartner Hank Ferguson. “The priority is to get Grand Bahama back on its feet It
is a place that has been challenged for the past two decades so there is now some effort to diversify.”
DevDigital Bahamas began setting up its operations in January this year to handle both local and international clients from the Freeport base, which mainly focuses on back-office operations The firm already has a client list that spans several industries, including hospitality and tourism, and is hoping to collaborate with stakeholders in the public sector to offer government departments streamlined and customized services As it expands, DevDigital Bahamas also intends to establish a Nassau office.
Despite the lure of the capital city, Freeport was always the first choice for its headquarters, according to Ferguson. Grand Bahama’s lower cost of living, proximity to the US and its family island charm were all part of its attractions. “I love the small town feel, but with the big city amenities ”
Both Kates and Ferguson believe there is a buzz about Freeport now, and are impressed by Minister of State for Grand Bahama Kwasi Thompson’s proactive campaign to bring in more investment and cultivate relationships with the international tech industry
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Co-founder and managing partner of DevDigital Peter Marcum speaks during Nashville Entrepreneur Week
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“Investors in Freeport are being supported and given exceptional treatment.”
Ferguson says: “ We met with the minister and we realized his level of involvement in tr ying to get this done It was refreshing and different. He has a personal commitment to this.”
However, change takes time While
DevDigital Bahamas is happy to be in the first wave of tech investment, the company recognizes that there is still work to be done before Grand Bahama becomes a mecca for tech talent.
“ Things do not happen overnight,” says Kates “Silicon Valley did not just appear. You have to plan for, and start, that process All the folks involved have a vision and they have put that vision out there. Hopefully, people such as us and others will help create it. There is momentum here, but it takes time ”
If Grand Bahama is going to live up to its potential, it must overcome certain
hurdles. The team at DevDigital Bahamas says setting up in Freeport has not been without its challenges “You have the enabling framework, but some of the key elements are still under development,” says Ferguson “ The cost of energy is not resolved When you figure that out, you can be a legitimate competitor. If you want to be Silicon Valley you have to fix that There is a viable opportunity in Freeport for large-scale renewable energy. ”
Ferguson would also like to see a more specialized labour pool to help investors hire more locals with the necessary skill sets The company wants to work with the University of The Bahamas to build expertise and is looking at bringing in computer programmers who would then train and teach students in Freeport
Kates is particularly keen to find and develop talent in Grand Bahama, saying: “Our team comes from a creative background and part of our
Bahamas blockchain creates buzz
as the government focuses on increasing the country’s tech capacity, one Bahamian firm is ahead of the curve launched in april 2018 by local tech entrepreneur Matthew arnett, Po8 is the first Bahamian blockchain start-up The company leverages blockchain technology to revolutionize marine archaeology–tokenizing underwater expeditions, digitizing artefacts and creating an online registry and auction
Po8 won the Creative Business Cup award at demand solutions 2018 in Chile The firm competed with over 250 tech companies from around the world to take home the coveted award. Mikia Carter, private sector consultant at The Bahamas branch office of the Inter-american development Bank, which hosts the event lab, says: “This achievement demonstrates the significant potential of the innovation ecosystem in The Bahamas and highlights the creativity of Bahamian entrepreneurs ” arnett adds: “We are shifting The Bahamas from
tourism to a new third pillar, which is tech, and giving young people a new dream to create in new industries such as blockchain, artificial intelligence and Fintech ” and the company shows no signs of slowing down, with a planned expansion into the african market this year arnett, who spoke at the Blockchain africa Conference in March, said during his presentation that he was excited to bring cutting-edge technology from The Bahamas to international partners “We want to bring our blockchain solutions to african nations interested in conserving their underwater heritage; but equally important we want to work with nations supporting blockchain innovation ”
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Kwasi Thompson, Minister of State for Grand Bahama
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mission is to identify the next incredible designer who has a vision that is local, fresh and different That is an important part of what we are doing.”
DevDigital, which has offices in the US, India and Zambia, prides itself on being a global firm supported by local partnerships and it wants to adopt this model in its Bahamian operations– creating linkages, not just with other businesses, but also fledging entrepreneurs
“ We are passionate about supporting entrepreneurs, ” says Kates. “ We will invest in the right situation, one that gets us excited That is part of our growth strategy. We have the ability, the capacity and the desire to identify entrepreneurial companies, help them grow and support them by giving them financial or technical capital.”
DevDigital Bahamas plans to be a fixture in Freeport’s business landscape for many years to come, supporting start-ups, discovering talent and providing job opportunities, while growing its own business Kates says: “We are not going anywhere. We have a tremendous reputation and our plan is to keep that stellar reputation while we build business in The Bahamas.”
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Grand Bahama offers an active island lifestyle
record-breaking tourism in The Bahamas
By Jessica robertson
The Bahamas has been experiencing phenomenal growth in tourism over the last couple of years. There are a number of factors that have driven the boom, from concerted marketing efforts by the Ministry of Tourism and Aviation to economic upticks in major markets such as the US But with an increasingly competitive holiday destination market, The Bahamas needs to be bold and innovative to maintain market share.
And it’s a market share worth fighting to hold on to Last year was record-breaking for cruise ship and stopover arrivals to The Bahamas. By the end of 2018, foreign air and sea arrivals totalled more than 6 6 million visitors, a drastic increase from the 6 1 million recorded in 2017. Stopover visitors alone had increased 16.7 per cent in 2018, as compared to 2017, and Freeport saw a surge of sea visitors by 49 per cent
This, of course, helps drive the economy. The Nassau and Paradise Island hotel industry reported a year-on-year spike in average daily room rates and revenue per available
nationwide, in Nassau and Paradise Island, in Grand Bahama and in our major Family Islands This is welcome, heartwarming news at a time when we are endeavouring to drive our nation’s economy ” However, this is no time to rest on one ’ s laurels “The growth in tourism in The Bahamas surpasses the global growth,” tourism director general Joy Jibrilu points out “It surpasses the Caribbean growth. But I said to the Minister, it’s unlikely we can sustain this level of growth.” The ministry must work hard to remain competitive
A new campaign
room in 2018. The year ended with room revenues up 34 per cent, gains not seen in the past 10 years
“As a nation, we have been seriously engaged in the tourism business for about six decades,” said Minister of Tourism and Aviation Dionisio D’Aguilar at a press conference announcing the figures early this year “The increase in our tourism business in 2018 was experienced
This goal was on their minds when representatives of the tourism ministr y and their new creative agency partners, Fort Lauderdale-based Tambourine, thought about how best to position The Bahamas going into 2019 to stand out in an increasingly competitive market When brainstorming a marketing strategy, several words came to mind that encapsulated The Bahamas: cool, chic, laidback and sexy.
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“With an increasingly competitive destination market, The Bahamas needs be bold and innovative to maintain market share.”
visitor numbers are soaring, and with a brand new campaign touring the globe, signs are good for the future
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Joy Jibrilu, director general, Ministry of Tourism
The marketing professionals advised that whenever people think of a special place or occasion they link it in their minds to a song. The team was able to easily identify a song for other destinations, but it seemed The Bahamas lacked a signature soundtrack.
They brainstormed some more and came up with what they felt was the ideal tune It was edgy It was catchy It was award-winning. And it was written and performed by a cool, chic, laidback and sexy superstar with Bahamian roots But they had little hope that Lenny Kravitz would go for their idea
Match made in heaven
It had been almost seven years since the last Bahamas brand campaign and they had to go big So the group figured they had nothing to lose by asking The problem was, no one knew how to reach Kravitz. No one, that is, except Jibrilu.
“I had the distinct honour and privilege of calling Lenny,” she says, recalling that she proceeded to share the campaign concept with him and then said: “It involves you and it involves a song ”
Kravitz has been ver y careful during his 30-year career about doing anything commercial and he was quick to tell her so Jibrilu recalls thinking that it was a long-
shot anyway and was preparing to hang-up when he paused and said: “Well, it depends What song do you want to use?”
The song they had their hearts set on was his Grammy Award-winning 1998 hit “Fly Away ” It turns out they couldn’t have made a better choice.
Kravitz then proceeded to share the story behind how he wrote the song He had just about wrapped up recording and producing his latest album at Compass Point Studios in The Bahamas and after dropping his daughter Zoe off at school one morning, he was so taken by the beauty of the water along West Bay Street that he pulled over and “Fly Away” just came to him.
He finished writing it and headed back to the studio to tell them to hold the album because he had another song. “He told me that the fact that it was inspired by the beauty of The Bahamas and he recorded it in The Bahamas meant that he couldn’t say no. ”
They kept the partnership with Kravitz a closely guarded secret for a year, while the first part of the campaign was doing the rounds The same beautiful water that inspired the song features heavily in the campaign. “We kept asking people why
they would come to The Bahamas,” Jibrilu says “Unanimously, it was the water. We realized that the very thing that makes us what we are, we were not capitalizing on ”
The first part of the campaign highlights the 16 populated islands of the archipelago, and showcases average Bahamians telling their own stories about their lives and where they live. It started to capture a lot of attention “ The interest in those personal stories got a million and a half views in the first few months. People were
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writing to us and telling us they want to visit those places,” says Jibrilu.
Finding a way to get the world to know the different islands by name was a critical part of the overall long-term strategy. Not only does it benefit the smaller islands and industry partners, but it keeps The Bahamas from simply being a tick on a bucket-list Today’s travellers get bored easily and Jibrilu says that by showcasing the individual islands and getting people excited about the prospect of visiting somewhere new and doing something different, the country avoids the “been there, done that” syndrome that could eventually stagnate future growth
A new budget in the upcoming fiscal year will allow the Ministry of Tourism to promote the next group of islands and they plan to keep going, knowing they will never run out of authentic stories to tell or unique Bahamians to tell them
Unlike past campaigns that did well in some markets but weren ’ t embraced by others, this latest campaign is being well received around the world The television
campaign, visiting China, Canada, Mexico, Germany and the UK, and there are more trips scheduled for the second part of the year
The difference this time, says Jibrilu, is that they are not the ones banging on doors begging for an opportunity to show their wares. “I went to the World Travel and Tourism Council in Spain,” she says “It’s the largest private sector tourism conference globally. I didn’t have a moment Everyone wanted to meet with me and talk about our new campaign and how they could partner with us. ”
The gamble pays off Jibrilu says the campaign is reaping rewards they never could have imagined In February, the month of the campaign launch, international arrivals increased by 11 1 per cent year-over-year
the Americas If The Bahamas continues the way it is going, “ we are on track to become record-breaking,” says Jibrilu.
ad and vertical campaign material featuring Kravitz was introduced in New York City in early February to rave reviews
However, as successful and well received as the campaign was, Jibrilu knew they couldn’t just hit play and sit back to wait for the tourists to come in droves. In the past six months, the Ministr y of Tourism has been on a whirlwind tour to support the
Air capacity grew by 20 per cent in January and 21 per cent in February yearover-year, with a solid seat growth from the best-connected international markets–the US and Canada.
And the rest of this year is already on target to do even better The first quarter of 2019 showed double digit growth, and projections through the end of the year show that the campaign is definitely paying off.
The United Nations World Tourism Organization projects 6 5 per cent growth globally and 3.75 per cent growth for
Perhaps the most incredible part of the campaign’s success and the resulting growth is that the Ministr y of Tourism didn’t have unlimited funds The total budget for all marketing activities–the campaign creative and placement, as well as digital marketing, global and marketing and domestic marketing–was $10 million Competitor destinations are spending three times that amount and it pales in comparison to the marketing budgets of hospitality industr y partners such as Atlantis and Baha Mar.
Jibrilu attributes the success, despite a “relatively miniscule” budget, to smart spending and managing the budget as carefully as possible, having an agency that wanted nothing more than to work on this account, a brand ambassador such as Kravitz, who goes above and beyond to promote The Bahamas, and increased airlift from key markets into destinations throughout the island chain
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B s P h o T o s / P a T r I C k h a n n a INDUSTRY © B a h a M a s M I n s T r y o F T o u r s M a n d a v a T o n C h r s T I a n d I M T r u s
Minister of Tourism and Aviation Dionisio D’Aguilar (centre) receives the Caribbean Journal Destination of the Year Award from Alexander Britell (left), founder and editor-inchief and Guy Britton (right), executive vice-president and managing director during a brief ceremony at the Ministry’s offices in February this year.
“…the month of the campaign launch, international arrivals increased by 11.1 per cent year-over-year.”
For the past year, Jibrilu has found herself setting goals in terms of visitor arrivals and then readjusting them each quarter when they are surpassed
“But we have to be realistic,” she cautions “This level of growth is going to be limited by capacity We only have a certain amount of rooms and inventory. There’s a point where you are saturated ”
And no matter what the overall numbers are, for her, only when Freeport and Grand Bahama is turned around, will she truly feel that they have achieved success. “We have to crack that nut, ” she says of the country ’ s second city.
For the first time in a long while there is some hope thanks to some key project announcements on the island. While she would personally like to be more deliberately strategic in the rebuild of the Grand Bahama tourism market she accepts that the island is on life-support and The Bahamas “doesn’t have that luxury We have to do something to get it going.”
The numbers for Grand Bahama have been showing some improvement, but there, more than anywhere else in the country, the lack of hotel rooms at the moment is holding it back The government is in the midst of talks with Royal Caribbean Cruise Line and its partner ITM to iron out an agreement for the purchase and redevelopment of the Our Lucaya resort complex.
Jibrilu says that the airlines have assured the Ministry of Tourism that as soon as there are places for people to stay, and tourists who want to come, they are ready to provide the necessary airlift
Although she and her team are clearly enjoying the results of their hard work and
the chances they took at producing something different, Jibrilu is already focused on what comes next “That was the question I asked my team after the launch It was so successful, I couldn’t sleep that night and my team said ‘ aren ' t you excited?’ And I said ‘where do we go from here? How do we top it?’”
They have two years to work on the next great campaign idea and she is definitely up for the challenge
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“If The Bahamas continues the way it is going, “we are on track to become record-breaking,” says Jibrilu.”
luxury yacht charters
Five-star cruises to tour The Bahamas
By Gillian Beckett
It’s no secret that many of the world’s billionaires can be found cruising The Bahamas’ crystal clear waters in their massive, lavish superyachts. Glitterati from French luxury goods billionaire Bernard Arnault to director Steven Spielberg and Boston Red Sox owner and investor John W Henry have sailed around the islands.
The Russian billionaire Roman Abramovich’s behemoth 533 ft Eclipse, complete with its own submarine and missile-defense system, has been sighted in Bahamian waters in recent years
While owning one of these ocean-going wonders is accessible to only a few, there are many opportunities in The Bahamas to sample a slice of the luxury boating lifestyle through a range of high-end charters
Luxury yachts charters
Island Yachts is one of several charter companies based in Nassau that specializes in providing luxury charter services for high-net-worth and ultra-high-net-worth clientele
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“ We are a team of individuals comprised of yachting, charter and business backgrounds, and one that is not only professional, but also offers great insight into the intricacies of the yachting industr y within The Bahamas,” explains Island Yachts’s charter broker Lee Lubbe
Operating since February 2018 and headquartered at Bay Street Marina, the Bahamian registered company comprises a fleet of 10 yachts, ranging in size from 30 to 160 ft with crews of two for the smaller vessels and up to 11 on the larger yachts.
“We very much specialize in an all-inclusive luxurious day on the water, ” says Lubbe. “We understand that many of our guests are not here for weeks on end and
have the need for instant gratification We pride ourselves in a last minute, expedient booking service with the same attention to detail and professionalism as if we had months to plan their perfect day onboard.”
While many who book with Island Yachts are wealthy tourists, the charter company also counts among its clients high-net-worth residents of New Providence’s exclusive communities, such as Albany and Lyford Cay, and Paradise Island’s Ocean Club Estates And with competition growing among new and established yacht charter firms throughout The Bahamas, Lubbe
stresses the importance of “setting yourself apart ”
“We can honestly say that the yacht business is a naturally booming industry in The Bahamas,” she says. “The beauty here is enough to draw anyone in and, yes, that does make it an incredibly competitive industry to be in “It all comes down to expediency–the quicker you are able to meet your clients’ demands, the quicker charters are booked. We certainly go above and beyond the call of duty in our attention to detail and no demand is too high. This definitely sets you apart in the industr y. ”
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“We can honestly say that the yacht business is a naturally booming industry in The Bahamas.”
With many luxur y charters costing thousands of dollars, it is only natural that high-net-worth clients expect the absolute best experience
“There is definitely an expectation by our clients once onboard,” says Lubbe. “ Tailored ser vice, knowledgeable crew, and exceptional food–our clients expect the ‘ wow ’ factor, not only from the natural beauty, but from the yacht itself
they enjoy lounging, or are they active? Do they enjoy water sports and games? And then, naturally, this has to be relayed to the crew. ”
Island Yachts offers several customized and all-inclusive excursions to destinations near to New Providence and throughout the Family Islands.
Some of their most popular trips include a cruise to Rose Island, located just three miles east of Paradise Island, where guests can swim with turtles, snorkel, jet-ski, or unwind at island-style beach bars Sandy Toes or Footprints, each on a beautiful stretch of white sand beach
Another luxur y cruise is to the Exumas. At North Exuma, guests can visit the iguanas at Allen’s Cay; stroll along the famous Sand Bar at Saddleback Cay; enjoy a “lazy river” paddleboard among the mangroves; and snorkel the sunken ruins of a C-46 plane at Norman’s Cay
A growing luxury market
In recent years, the luxury yacht charter market has grown exponentially in The Bahamas, thanks mainly to social media.
“This is definitely a niche industry,” says Lubbe “But social media has introduced many people to luxury yacht vacations, where in previous years, it was this secret billionaires club TV reality shows such as Below Deck have also massively changed the industry Now, everyone knows about it ”
She adds that the popularity of luxury yacht charters has opened the door for options “from a variety of sizes, types of vessels and trip duration, as well as budget.”
The sudden growth in luxury yacht charters also means good news for The Bahamas’ economy and tourism product.
“[Yacht charters] have an incredible economic life cycle It starts with the charter licences which are compulsor y for any yacht wanting to charter in The Bahamas,” says Lubbe “Once the yacht is licensed, they are able to charter and a four per cent cruising tax is imposed on every foreign-flagged yacht charter in Bahamian waters. That’s a ver y welcome means of income for the government ”
“The crew members are effectively the tour guides for the day and knowing as much as possible [about The Bahamas] is a great asset. Something as small as the captain knowing where the best snorkelling spots are, where you can find certain species or where to hide when it gets windy–these are absolutely critical ”
Lubbe says that there is also an “added pressure ” on their chefs “ as our clients are certainly accustomed to dining in restaurants helmed by world-renowned celebrity chefs.”
It is also essential to be in tune with ever y client’s personal needs “ We have to get to know as much about the client as possible in a few phone calls and emails,” says Lubbe “ We need to know if they have allergies; if they prefer a certain brand of wine, water or soft drink; and food is to be prepared to their exact specifications Do
In South Exuma, guests can visit Big Major Cay’s celebrity swimming pigs; explore James Bond’s 007 Thunderball Grotto; have a delicious lunch at the Staniel Cay Yacht Club; and swim with nurse sharks at Compass Cay
Yachting also gives visitors to The Bahamas an opportunity to see untouched and remote islands and cays, many of which are only accessible by boat
Island Yachts also offers a luxur y day getaway to picturesque Harbour
Island, home of the famous Pink Sand Beach and a favourite haunt of A-list celebrities. On the island, guests can hop on a golf cart to explore historic Dunmore Town which is lined with chic boutiques and quaint shops selling ever ything from homemade jams and fresh-baked bread, to local arts and crafts.
“Yacht charter guests and owners don’t see the likes of Over Yonder Cay, Musha Cay or Little Whale Cay from a hotel lounge chair, but they can from the aft deck of a yacht,” says Lubbe “ The resorts in Nassau should not define The Bahamas as a whole We enjoy the opportunity to show guests the beauty of the Family Islands ”
The future of yachting
The yachting industr y is developing and technology is playing a crucial role, particularly with efforts to reduce its carbon footprint on the environment.
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“Tailored service, knowledgeable crew, and exceptional food–our clients expect the ‘wow’ factor.”
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Sandy Toes, Rose Island
“The ‘ go green ’ movement is starting to become much more visible in yachts,” says Lubbe “Many yacht owners are looking at hybrid propulsion and how to have an eco-friendly boat that has a less environmental impact ”
She adds that improvements to navigational technology have been vital for yacht charters where in the past “ paper charts made navigation risky” particularly when cruising around shallow reefs. “Modern navigation chart plotters have made many aware that The Bahamas is safe to visit, which is evident as we are seeing
200 to 300 ft yachts on a regular basis.”
The future of luxury yachting is bright, says Lubbe, adding: “For The Bahamas, the next five to 10 years is only going to get better.
“You cannot quantify the spend that these yachts bring in The global yacht industry is projected to reach $74.7 billion by 2020 It is absolutely beneficial for the Bahamian economy ”
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“We enjoy the opportunity to show guests the beauty of the Family Islands.”
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Odetta Morton, chief executive officer, Deltec Bank & Trust
a new horizon for banking in The Bahamas
By Jessica robertson
A career in banking was not top of mind for Deltec Bank & Trust chief executive officer Odetta Morton when she entered university at age 16. Morton’s earliest ambitions involved becoming a paediatrician, but the best-laid plans often buckle in the presence of weightier
financial ser vices group, providing through its member companies a range of private banking and fiduciar y expertise, fund administration, investment management, digital asset financial ser vices, insurance solutions, and corporate and merchant banking capabilities
interests In Morton’s case, it was an internship in the finance department of a local company in her hometown of Freeport, Grand Bahama in the summer following her sophomore year that shifted the budding physician’s passion to finance, and ultimately earned her a spot on a short and distinguished list of Bahamian female banking chief executive officers.
Taking the helm at Deltec Bank & Trust Ltd on April 1, 2019, Morton assumed responsibility for the flagship company of the Deltec International Group (DIG). Headquartered in The Bahamas, DIG is a diversified independent
Building on this foundation, Morton is concentrating on taking the bank to the next level “I’m focused on the business strategy for the continued differentiation and growth of Deltec Bank,” she says “ The priority is to leverage our strengths as we continue to invest significantly in digital and innovation strategies to deliver more value to our clients ”
At the beginning of her career, Morton landed a job as an associate in the Atlanta office of Lindquist Avey, a forensic accounting firm later acquired by global financial intelligence, investigations and advisor y firm Kroll. It was here that she received the foundational training in forensic accounting (specifically cases involving money laundering) and due diligence
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The new Ceo at deltec is young, Bahamian and a woman. Welcome to the future of private banking.
“The priority is to leverage our strengths as we continue to invest significantly in digital and innovation strategies.”
that would anchor her balanced approach to financial ser vices
“ The world of forensic accounting provided me with a solid foundation, particularly enabling me to sharpen my analytical approach, which has ser ved me well during the course of my career. ”
After three successful years in Atlanta, Morton decided to return to The Bahamas.
“I figured ‘ your gifts will make room for you ’ I appreciate that there are tonnes of opportunities in the US, but I believe in The Bahamas and I felt like I could achieve great things if I came home I didn’t feel as though I was doing a disser vice to my career by moving back.”
Her parents, both local church pastors, gave her the solid foundation to which she attributes much of her success, and remain her closest confidantes and mentors
“My dad is my voice of wisdom I call him up a lot for advice And who better to give me advice than him? He knows me best,” she says
She adds that although they are traditional in many ways, they raised her to know that she
had no limitations, and to think outside the box In fact, she said they supported whatever path she chose. She returned home to take a role in the Audit and Assurance department of Deloitte where she qualified as a Certified Public Accountant and continued to work closely with financial ser vices clients.
Morton had been with Deloitte for three years when the position of assistant financial controller at Deltec, then still a relatively small private boutique bank, became available, and she was offered the role.
A few years after joining the bank she was promoted to chief accountant and then six years later, she took on the added responsibility of chief financial officer of Deltec Bank & Trust and later, CFO of DIG
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Deltec Inter national Group chairman Jean Chalopin welcomes over 300 thought leaders, regulators, emerging companies and financial services professionals to the Deltec Annual Conference opening night dinner in March at the Rosewood Baha Mar.
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“Clients want something smarter, a bank built for the future.”
In April this year, she was tapped to become Deltec Bank & Trust’s CEO.
When she was approached with the opportunity to take on that demanding position, the wife and mother of a two-year-old felt it was an incredible opportunity but acknowledges that she momentarily struggled when considering work-life balance
“I knew I had in Deltec a company that is like none other in our space, and I knew we had extraordinary talent that extends across our organization; our success has always been because of the people who work individually and collectively to drive Deltec’s accomplishments. I would have their support and the opportunity to navigate Deltec through one of the most interesting times in financial services history. How could I turn it down?”
unique selling points
deltec is an independent financial services group owned by a group of client shareholders boasting:
• a conservative balance sheet –no debt, no proprietary trading, no commercial loans
• alignment of interests–owners, employees and clients invest side by side
Not your traditional private bank
The fact that she clearly loves Deltec made that decision even easier to make When Morton started at the bank in 2003 it had a team of 27 people and approximately $1 billion in assets under management and administration Today, The Bahamas-headquartered company has 162 employees and group wide assets under management/administration/ custody stands at $12 billion.
Deltec is nimble enough to adapt and ensure that the bank can thrive in the face of this paradigm shift Change is inevitable but it also presents exciting new opportunities. We have to be different We have to be innovators And that is Deltec’s spirit We have a spirit of innovation and entrepreneurship.”
You need only look to Deltec Bank and DIG chairman Jean Chalopin to understand why the company might approach things in such a unique way
Morton says most of that growth was a result of a strategic decision in the past six to seven years to shift the bank’s business model from a well-run operation with minimal growth ambitions, to embracing a real plan to grow the business. Growth occurred initially through the development of a number of strategic relationships, and was accelerated by the acquisition in 2016 of The Bahamas’ private banking activity of Société Generale Private Banking and resultant expansion of its service offering to corporate clientele The acquisition marked a significant milestone in the implementation of Deltec’s ongoing global diversification strategy, which was firmly anchored by its private banking presence in The Bahamas.
• Privately owned–taking the long-term view in all aspects of business leads to organizational stability and client satisfaction
• highly personalized service
• 70 years of experience (60 years in The Bahamas) working with complex, multi-jurisdictional families
• safe jurisdiction–The Bahamas offers a stable, well-regulated and tax-neutral jurisdiction
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“I like to think of us as ‘ not just your traditional private bank’,” she says “A bank can get stuck offering middle-of-the-road solutions that aren ’ t ver y inspiring to today’s clientele Clients want something smarter, a bank built for the future rather than one tr ying to squeeze more out of the past. ”
Morton says that this philosophy extends to all areas of the business and she coaches her team to be different and think differently “Disruption is rapidly impacting the financial ser vices industr y across the globe, and
He was the creative force behind some of the biggest names in Saturday morning television cartoons between the mid-1980s and early 1990s. Inspector Gadget, The Care Bears, The Littles and Dennis the Menace are just some of the characters he made famous as a writer and/or producer
“Jean is a visionar y So again, he’s not your traditional banker,” says Morton. “ What sets him apart is that he is also an entrepreneur In an environment that is experiencing such a dramatic shift, it helps to have a chairman who challenges us to be for ward-thinking
We have a great partnership. Jean thinks outside the box and appreciates the concept of positive disruption that is driving the financial industr y right
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P a T r I C k r o B I n s o n / © d u P u C h
“We have to be different. We have to be innovators. And that is Deltec’s spirit.”
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now He also gives me and my executive team the freedom to weigh, assess and analyse his ideas and translate them within a banking framework so that they make sense for the bank ”
Morton recently replaced Chalopin as CEO so he could devote more time to the broader vision and strategy for the group ’ s development. Chalopin, the architect of the modern Deltec, has spearheaded the group ’ s recent expansion into new and emerging businesses, including digital asset financial ser vices, merchant banking and insurance, and is the driver of the group ’ s technology roadmap.
Deltec is evolving into a Fintech friendly bank whose spirit of innovation is grounded by sound principles of risk management, client ser vice and a belief in people as one of its strongest assets Morton says it is the focus on technology in particular that helps them stand apart and stay ahead of trends
“We are squarely entrenched in a digital age and in order to meet the needs of multiple generations and geographies represented among our client base, we have to make sure that our tools and
processes are driven by technologies that mimic the ‘mobile-first’ efficiencies that our clients are accustomed to in their everyday lives As an organization, agility is key for us as we evolve,” she explains.
“ The financial ser vices sector is also
facing a rapidly changing regulator y environment. Deltec has responded with a heavy investment in regtech platforms We are also investing capital to ensure that we give full consideration to the place that disruptive AI and other technologies have in enhancing AMLrelated risk management, governance and controls, and client experience.”
Committed to The Bahamas
Deltec has been headquartered in The Bahamas since 1959 and Morton says there are no plans to move.
“We are committed to The Bahamas
We are here to stay We’re a private bank breaking with convention in that we want to build our headquarters here and develop our talent pool locally,” she says
At the Deltec Annual Conference held in Nassau in March, Deputy Prime Minister and Minister of Finance K Peter Turnquest pledged the government ’ s focus to ensure the jurisdiction can support the more technological advances that are required for ongoing financial ser vices success.
“For us, this is not a choice; this is an imperative We are an international
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Henri Arslanian, Fintech, Regtech and Crypto leader discusses the latest global financial technologies, trends, their impact on the future of the financial services industry as a whole, and the future of money as we know it at the Deltec Annual Conference in March
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Deltec Initiative for the Arts, “encouraging young, undiscovered Bahamian artists to develop their talents, and pursue their passion.” Paintings by Preston Hanna.
“We are committed to The Bahamas. We are here to stay. …we want to build our headquarters here…”
financial ser vices centre and Fintech is one of the fastest growing and innovating industries,” he said
Morton is optimistic. “ There truly is no alternative. We must embrace the rapidly changing landscape and position ourselves as a jurisdiction to capitalize on this evolution.”
Deltec’s commitment to The Bahamas spills out of the boardroom and into the community. Its corporate social responsibility programme, directed through the Deltec Initiatives Foundation, was designed to foster an environment that empowers young Bahamians to drive positive social impact through the power of arts, entrepreneurship and education.
Fintech at the heart of banking
deltec International Group hosted its annual Conference in March at the rosewood Baha Mar resort in nassau on the theme of “Trusting disruption,” the event brought together more than 300 thought leaders, regulators, emerging companies and financial services professionals to reflect on the potential for technological innovation to transform every sector.
during his address, Jean Chalopin, chairman of deltec International Group, said: “To trust disruption, we need to understand what innovation means for us, so that we can adjust our vision and investment approach and be better armed to capture the next best opportunities We were thrilled to welcome innovators to The Bahamas to share ideas and discuss the impact of technology on our society.”
In addition to the keynote addresses, the deltec annual Conference featured The Innovator’s Marketplace, a component of the conference designed to provide a forum for emerging companies in biotech/life sciences, virtual reality, blockchain, Fintech, quantum computing and other cutting-edge industries to pitch their ideas to investors and attendees in 45-minute presentations.
In his remarks at the conference gala hosted at the conclusion of the first full day of the event, Peter Turnquest, deputy Prime Minister and Minister of Finance, said: “We need to push the boundaries of what is possible in technological development, and in collaboration across sectors in the global community
“This is what inspires our people, helps us to create and innovate, and dares us to take risks–all crucial parts of building The Bahamas’ reputation as a global economic player ”
This was the fifth time the annual Conference has been hosted by deltec in nassau.
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The Annual Conference featured The Innovator’s Marketplace, designed to provide a forum for emerging companies to pitch their ideas to investors and attendees in 45-minute presentations
Since 2013, the foundation has discovered, launched and mentored many talented, motivated and driven Bahamian artists, artisans and entrepreneurs The Deltec Initiatives Foundation comprises three pillars: The Initiative for the Arts, The Initiative for Young Entrepreneurs and The Initiative for Scholarship & Education. Morton also serves as a director of the Foundation on a volunteer basis
history of deltec
deltec was established when Clarence J dauphinot, Jr and associates, earl elrick and angus littlejohn (the first initial of each last name forms the ‘del’ in ‘deltec’) moved to rio de Janeiro to explore banking and direct investment opportunities deltec grew as an invitation-only ‘Investors’ Club’ to become one of the first global multifamily offices, making direct private investments in latin america and later, around the world
In 1959, attracted to the safety and security offered by The Bahamas, the founders established a banking presence in nassau. deltec Bank & Trust is now one of the oldest banks in The Bahamas, offering diversified services to a diversified clientele deltec’s shareholders, in the early days, included a number of prominent us investment banks and european financial institutions, each of which had a small shareholding to express their interest in the financing activities of the deltec Group over the ensuing decades, deltec has forged its reputation as an innovator in structuring solutions and investment opportunities deltec continues to engage shareholders, clients and friends to seek out and participate in the highest quality investment opportunities available.
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Deltec Bank & Trust’s Bahamas headquarters is just outside exclusive Lyford Cay.
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