Winter 2022-2023

Page 89

Giannis Antetokounmpo
Everyday Exceptional The new Maserati Grecale Trofeo.
Fuel consumption combined (l/100 km): 11,2 // C O 2 emissions combined (g/km) : 254 // Efficiency class: F * CO 2 is the main greenhouse gas responsible for global warming. The average C O 2 emission of all (cross-brand) vehicle types offered in Switzerland is 149 g/km. The C O 2 target value is 118 g/km (WLTP).



The Limited Edition Bremont Longitude is a groundbreaking timepiece that not only looks back at our country’s legacy but also forward to an exciting future of British watchmaking. The watch’s case back incorporates brass from the original “Flamsteed Line,” in Greenwich, the very spot where the first Astronomer Royal made his celestial observations in pursuit of an aid to navigation.

It has long been the goal of Bremont to bring watch manufacturing back to Britain. The Longitude represents a milestone in that journey, a homecoming of sorts, and proof that, to get where you’re going, you need to know where you came from.

First Thoughts

The climate crisis has prompted net-zero posturing from companies across sectors — and any claims they make merit public scrutiny.

The stakes are high.

Net-zero assurances should be checked against select-focus emissions disclosure, misalignment with science-based targets, and ineffective carbon-credit programmes. Regulation and oversight are patchwork at best. Carbon offsets need to be “additional” to make a dent in the crisis — and many aren’t.

The price of credits varies according to the quality of the project and the standards under which it was developed. Market opacity allows companies to buy those credits cheap — and then start touting a reduced-emissions footprint. It’s an easy-out for big polluters seeking business-as-usual.

Researchers have found forest-protection projects for areas that were in no danger of being logged. There is even evidence of the systematic misallocation of credits in the world’s largest offset programme, the Clean Development Mechanism (CDM).

A 2021 report estimates the CDM approved as valid 28 million tonnes of carbon offsets for sub-marginal wind-power projects in India. These windfarms would probably have been built without the CDM subsidy, leading researchers to extrapolate that wasted allocations may have increased global carbon dioxide emissions by 6.1 billion tonnes — equivalent to running 20 one-gigawatt coal powerplants for their entire 50-year lifespans.

Companies wanting to make a difference should explore science-based targets that will verifiably reduce emissions and soften environmental footprints. Otherwise, carbon offsetting is little more than greenwashing, and a distraction.

More transparency and accountability is needed across the movement as a whole.

A 2021 report by the Energy and Climate Intelligence Unit and Oxford Net Zero found that 21 percent of the world’s 2,000 largest public companies had made net-zero commitments —but just over a quarter met the “minimum set of robustness criteria”.

An analysis of climate pledges by 35 companies in the top-10 market capitalisation across the oil and gas, mining, chemicals, utilities, cement, steel, and food-processing industries found most goals were not sciencebased. The fossil fuel and mining companies assessed had minimal target-setting on scope-three emissions — those that occur in the value chain of the reporting company — where over 90 percent of lifecycle emissions occur. Their exclusion in disclosure reports effectively nullifies any net-zero pledge.

Environmental commitments should have short- and medium-term targets, instead of distant ambitions that lack the science-backed steps to achieve them. Corporations should incentivise, and plan at board level for climate action in capital expenditures. At the very least, they shouldn’t be making grand claims that are undermined by shady lobbying tactics.

Greenpeace made waves in June 2021 when it forced lobbyists to admit that ExxonMobil Corporation had publicly endorsed a carbon tax — in the full knowledge that the plan would never gain political support. In 2018, the corporation crowed about the $1m it spent on a two-year carbon-tax advocacy campaign in Congress.

Its annual lobbying budget is $12m.

ExxonMobil claimed to be shocked by the findings, and doubled down on its commitment to find solutions to climate change.

When will big polluters realise that a dead planet supports no business at all?

First Thoughts 8
First Thoughts 9


We are right to protest the difficult (and sometimes dangerous) conditions under which migrant workers sometimes find themselves. Some come to realise that their dreams of a better life will come to nothing when they are thousands of miles from home after signing apparently lucrative employment agreements. Sadly, not a few of these workers would have done much better to stay at home.

Doubtless you are thinking of certain destinations where reports of such behaviour are common. But please don’t think we in the UK are always on the side of the angels.

Some seasonal fruit pickers in Kent who were recruited this year from Nepal are finding themselves in great debt having taken up loans and selling whatever they had to finance their search for fields paved with gold. Expecting to spend half a year in the UK under the government’s seasonal worker scheme, they were let go after less than two months – with no chance of taking on other work because of the type of visa they were holding.

Migrant rights advocates were saying in November that there should be guaranteed hours and the possibility of taking on other jobs if farm work is not available. That sounds about right to me.

The recruitment agencies report that the Nepalis were told of the reducing availability of work before they travelled here. And that may be true. The problem is that when you are chasing a dream there is a tendency to look on the bright side.

I hope we become more welcoming to foreign seasonal workers. ROSEMARY DOWN (Ashford, Kent, UK)

The evening of 9/10 November 1938 has become known as Germany’s Kristallnacht(TheNightofBrokenGlass). Nazi violence to Jewish citizens, shops, other businesses, and synagogues represented a comparative baby step to the unspeakable horrors of the concentration camp and Holocaust.

This year, KFC inadvertently invited German patrons (by app) to celebrate the 84th anniversary of Kristallnacht by sampling its famed “soft cheese and crispy chicken”. Apart from the obvious objection, I was unable to countenance this suggestion because I am a vegan.

Of course, KFC was as alarmed as everyone else when they got the news of this digital screw-up and pulled it immediately. I say “got the news” because most likely, none of their personnel had even the foggiest idea that the invitation had gone out. The company has not explained the problem fully, but it does look as though the message may have been generated by a computer programme that knows about anniversaries but not the significance of each one.

The moral here is that we must ensure that artificial intelligence develops in a way that responds properly to our needs and supports us. KFC was able to correct this error within an hour, but the speed of such a reaction may not always be possible. Some mistakes may go uncorrected and cause us grief. In the meantime, KFC, get one of your warm bodies on the case.

I came across while travelling for business and have tuned into your channels ever since. I appreciate your comprehensive coverage of world markets and the people that move them. I learn something new with each flip through the magazine or scroll down the webpage.

City of London

> “ “

Your contributors and journalists have sparked plenty of water-cooler conversations with my colleagues, and you’ve introduced me to some of the world’s most innovative entrepreneurs and thought leaders.


There are plenty out there ready to pull us down if we become too successful. And if you’re the richest man in the word, the spotlight is going to be on you.

“ “ certainly did a fine demolition job on Chief Twit Elon Musk (online post: 7 Nov). Okay, I’ll admit it, the freed bird looks a little unsteady, but don’t write it off yet.

My hunch is that Musk will get things in good shape before long. Your article (and tweet) says, “Dust off your shovels! Elon Musk has bought himself intoa$44bnhole,andyou’reexpectedtodighimout of it….” Yes, he has certainly got a problem on his hands, but I’m confident that he will rescue himself –and take Twitter on to glory.

Don’t forget the extraordinary achievements of the man thus far. He is busy creating a better world for us and has a brain the size of an aviary.

MARK LUBBOCK (Hayling Island, UK)

I know, I know. I understand that everyone and their accountant, every business, every shopowner, each gambler and punter and optimist — they all want to be rich. But man, I’m sick of reading about the world’s wealthiest people. The filthy rich: there’s no better term for them.

The worst thing is, it’s always the same handful of misery-bags, more alien than human, it seems to me, who make up the rankings. Musk, Bezos, Arnault, Gates... Aaargh! If the pandemic caused Mr and Mrs Average such woe, financially, spiritually, in terms of lost freedoms, why, oh why, do the rich keep on getting richer and gadding about the planet like it’s their private playground?

Your recent article on the subject (Autumn 2022) — admittedly entertaining, in spite of the content — had me once again writhing in despair and futile anger. I don’t care how many billions they have; what I do care about it that these nincompoops, techies-who-got-lucky, inheritors of vast family fortunes, somehow gain elevated status in society. As if we care, or should care, what they think of world events. Musk is the chief offender here; hopefully he will continue to blunder his way through the Twitter purchase and end up skint. Or skinter, anyway. And then belt up.

World events are the domain of politicians, not ordinary people — not until we have true democracy, anyway — and I promise not to begrudge them their lucre if they’ll just wrap up and go back inside their ivory towers.

PS: If you’re wondering why a Labour voter from East London is even reading your magazine, my almostfilthy-richuncleforgothiscopyinmyfrontroomwhen he came to visit / gloat at my reduced circumstances. I was on my way up myself before Covid hit — on my wayuptopossiblyqualifyingforamortgage,thatis...


11 Winter 2022-2023 Issue

Lord JD Waverley

Sarah Worthington

George Kingsley

Tony Lennox

Brendan Filipovski

John Marinus

Ellen Langford

Helen Lynn Stone

Naomi Snelling

Wim Romeijn

Lord Waverley

12 | Capital Finance International
Otaviano Canuto
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Mark Publisher Anthony Michael Capital Finance International Meridien House 69 - 71 Clarendon Road
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Kingdom T: +44 203 137 3679 F: +44 203 137 5872 E: W: Printed in the UK by The Magazine Printing Company using only paper from FSC/PEFC suppliers COVER STORIES CBRE Student Accommodation (80 – 81) EY How Inflation Hits Businesses and Taxation (127) OECD Biodiversity Finance to Boost Climate-Change Resilience (164 – 165) IFC Climate Change and War (14 – 15) Cover Story The Taciturn German to Watch (26 – 29) OECD What Will It Take to Achieve UN’s SDGs? (146 – 147) Accenture Digital Twins and Data (118 – 119) > DISCUSSION PAPER
William Adam
John Mann


14 – 43

As World Economies Converge

IFC Alfonso García Mora Otaviano Canuto Nouriel Roubini Joschka Fischer Wim Romeijn Lord Waverley Tony Lennox Brendan Filipovski Joseph E Stiglitz Pollen Street Capital 44 – 49

Winter Special: 'California, Here We Come'

50 – 81


Victor van der Kwast

Byblos Bank Europe

CQ Investment Group

Lindsey McMurray David Casas Alarcón Nordea Finance

Peter Hupfeld Forward You Manfred Dirrheimer Matthieu André Architas Central Bank of Bosnia and Herzegovina Senad Softić Henning Vold Joachim Nahem

Norvestor Christian Andersson Worthwhile Capital Partners

Alberto & Francesco Ferrari First Marine Insurance Kitty Wenham Wilhelm Celeda Kathrein Privatbank 82 – 97 Awards

Rewarding Global Excellence 98 – 105


Thierno Ibrahima Diallo Société Générale Guinée Kellogg Insight 106 – 119

Middle East

Mohammed Alsheikh Banque Saudi Fransi Metito

Capital Bank of Jordan Salem Khalaf Al-Mannai Qatar Insurance Company’ Bashar Kilani Accenture 120 – 127

Latin America

Nazca Sergio Caveggia EY Argentina 128 – 147

North America

Mario Choueiri Aidan Garrib PGM Global Inc

John Engel Wesco International Heather Smith OECD 148 – 165

Asia Pacific

Chris Paton

La Trobe Financial MTR Corporation

Jacob Kam Chak-pui Amal Abeyawardene Wing Bank

Han Peng Kwang Naomi Snelling IDClear

Iding Pardi Thai Life Insurance Chai Chaiyawan Women’s Brain Project UNCDF

Winter 2022-2023 Issue | Capital Finance International 13
166 Final Thought

> IFC’s Alfonso García Mora: On the Frontlines of Climate Change and War

By 2030, climate related financing needs to deploy up to $3.5tn – or about four to five times the volume available at present: “The money exists and is mostly in the hands of institutional investors. In fact, they hold about a thousand times more funds than those available to development finance institutions. What we need to do is to create the conditions that make projects bankable.”

Mora is convinced that blended finance is key. Part of the World Bank Group, the International Finance Corporation (IFC) is, arguably, the most successful catalyst of private investment. Its seal of approval usually unlocks private capital to the tune of $11 for each dollar the IFC co-finances. “A few years ago, the role and use of multilateral institutions was being questioned but now the realisation has dawned that we need to coordinate our efforts to get the outcomes desired.”


The IFC provides much more than just financing: “Our environmental, social, and governance [ESG] framework is exceptionally strong. Once our borrowers comply with that framework, they also comply with the ESG framework of any other financial institution. This opens a world of possibilities.”

Mora points out that, in a way, the IFC does the due diligence “free of charge” for other investors. This “additionality” can be leveraged to boost the development of the private sector in nearly any market.

The IFC sees a world of opportunity In Latin America where its strategy rests on three pillars: inclusion, sustainability, and productivity. In Chile, the bank helped finance the largest electric bus programme outside China. It also plans to assist local power utility Engie Chile to decarbonise by changing its energy mix and replacing coal-fired power plants with solar and wind generation. Next, the IFC is exploring ways to encourage the production of green ammonia by exploiting the intermittency of renewables.

Though the IFC doesn’t work with country-based targets, it expects to deliver about $1bn in (blended) financing to Chilean businesses and projects over the course of 2023 – a threefold increase over the 2021 volume: “Chile needs to support inclusive growth and sustainability. Moreover, the macro-economic and fiscal situation of the country is better than that of others in the region which means that Chile has the right fundamentals to deal with what is coming and take the necessary actions.”


Mora would like to see the IFC pick up the pace when it comes to agribusiness: “Our investments in this space have so far been tiny. However, there is an urgent need to improve operational efficiencies and reconfigure wasteful business models particularly as they relate to water use. Water scarcity is real and getting worse with time. Water is going to become a huge issue and may spark conflict.”

The blue economy – defined by the United Nations as the sustainable use of ocean

resources for economic growth, improved livelihoods, and jobs – is another area that merits attention: “In Latin America, already 25 percent of the populations lives on the coast. In some Caribbean island nations that is 100 percent.”

In Ecuador the IFC recently reached an agreement to subscribe up to $40m in blue bonds out of a total of $79m placed by the Banco Internacional. The bonds will help the country’s efforts in climate change mitigation and adaptation. The IFC’s participation paved the way for the first private sector blue bond issue in Latin America.


In Europe, the IFC is determined to underwrite the rebuilding of Ukraine’s battered private sector. “. According to UkraineInvest, 86% of private sector companies completely or partially shut down in March while almost all of them resumed work in September. Our support program will leverage blended finance and will prioritize investments to ensure supply of critical goods and services, such as food and fuel,

14 | Capital Finance International
To mitigate the harmful effects of climate change requires the mobilisation of trillions of dollars. IFC Regional Vice-President for Europe, Latin America, and the Caribbean Alfonso García Mora is encouraged by the outcome of COP27 where it was decided –after three decades of discussions – to set up a Loss and Damage Fund: “However, the public purse cannot provide the volume of funding needed. Only the private sector can rally the required levels of funding.”
Regional Vice-President for Europe, Latin America, and the Caribbean: Alfonso García Mora

support business preservation and reallocation, and address immediate logistics and energy threats. Right now, we are providing working capital to a few companies but most of the attention of multilateral finance institutions has, understandably, gone to the public sector which suffers a fiscal deficit of between three and four billion dollar every month.”

Mora foresees a “huge role” for the IFC and points out that the Marshall Plan was, in essence, a form of blended finance avant-lalettre: “We need something similar for Ukraine whereby multilaterals supply seed financing that mobilises the vast volumes of private capital required to get the Ukrainian economy up and running.”

The IFC is set to launch a financing facility to help Ukraine and neighbouring countries redirect supply chains away from Russia. Another programme involves the setting up of a global food security platform – like the bank’s global health platform – to support commodity traders, farmers, food processors, and fertiliser companies.


In December 2022, García Mora announced that the IFC is to serve as the strategic advisor to the Ukrainian government on the creation of optimal conditions to boost private sector investment in reconstruction.

“The war will have a long-lasting macroeconomic and social impact on Ukraine and its people. The financing needs to rebuild Ukraine’s infrastructure and support its economic recovery are immense and keep rising. As one of Ukraine’s largest private sector investors, the IFC is committed to help leverage much needed private capital for Ukraine’s rebuild. We will start working with the Government of Ukraine on strengthening the enabling environment for private investment in infrastructure, as well prioritising and developing projects. This will help mobilise private investors as soon as Ukraine’s conditions allow to start the full-fledged reconstruction.”

In a policy statement on Ukraine, the IFC pledged to support the country’s existing private sector and provide direct support to Ukrainian suffering from Russia’s invasion, including refugees. The institution is determined to prioritise investments that ensure the supply of critical goods and services such as food and fuel and seek to address immediate logistics and energy threats. i

Winter 2022-2023 Issue 15
"In Ecuador the IFC recently reached an agreement to subscribe up to $40m in blue bonds out of a total of $79m placed by the Banco Internacional."

Otaviano Canuto: Going Around the Bend? Assessing the Phillips Curve May Be of Help

Current global stagflation may evolve to become a soft landing, a sharp downturn, or a deep recession. It will all depend on how fast inflation responds to economic deceleration.

That involves guessing the shift in major economies’ Phillips Curves. The economic model, named after William Phillips, hypothesises a link between reductions in unemployment and increased wage rates.

Some areas of financial intermediation — such as the sudden disappearance of liquidity — have recently developed increased vulnerability. Significant shocks could cause the Phillips Curve to exhibit higher unemployment and under-utilisation of capacity — even as inflation rates decline.

Global inflation has triggered the simultaneous tightening of monetary and fiscal policies. Economic growth projections for 2023 have been revised downward. Inflation rates will come down only gradually, given the price stickiness of their core components. The world faces a situation of stagflation — a combination of significant inflation and low or negative GDP growth.

The evolution of the situation will depend on how fast inflation drops in response to economic deceleration. This can be assessed by the Phillips Curve shifts in major economies, reflecting the cross-border spill-over of countryspecific policy choices. Any abrupt deterioration in financial conditions may cause Phillips Curve movement.

A global recession — global GDP rising more slowly than population growth — is a strong possibility. The combination of economic slowdown and inflation will vary in different countries, but it will be a common feature.

Here we compare the underpinnings of the inflation/unemployment trade-off in the 1970s and ‘80s and the current storm provoked by the pandemic and the war in Ukraine.

Recent challenges arise from the appreciation of the US dollar relative to other currencies,

Figure 1 (1/2): Change in central bank policy rates since Dec 31 2021 (G20, except Argentina (+37%pts), % points). Source:Wolf(2022).

particularly those of other major economies. This may reinforce the contractionary pressures on the global economy. In emerging-market and developing countries (EMDEs), although exchange-rate depreciation has not been as intense as in non-US advanced economies, vulnerabilities associated with dollardenominated liabilities could intensify problems.

Recent interest rate rises have been widespread. The left side of Figure 1 depicts basic interest rate hikes since 2021, while its right shows market estimates of rate hikes.

On September 21, 2022, the Fed raised the target for the federal funds rate by 75 basis points, bringing it into the 3-to-3.25 percent range. The Fed maintains that further rate hikes are appropriate. It notes that while national spending and production have declined, the increase in employment has been robust. Individual projections by the members of the Fed’s Open Market Committee (FOMC) have changed from those issued in June. The September median federal-funds interest rate projections pointed to a rate of 4.4 percent by year’s end.

Rates are expected to rise in early 2023, with a projected peak of 4.6 percent. Fed chairman Jerome Powell said rates must remain restrictive

Figure 1 (2/2): Global Monetary Policy Tightening. Note:Bp-basispoints.Source:J.P.MorganGlobalEconomics.

enough to keep the US economy running below its potential to reduce inflation.

This appeared in downward revisions to forecasts for real GDP growth: 0.2 percent year-on-year in Q4 2022, followed by 1.2 percent and 1.7 percent in 2023 and 2024. Growth over the next two years will be below the estimated potential level of 1.8 percent. The Fed believes inflation will not reach its target until 2025.

The Fed has also revised its forecast for the unemployment rate, predicting a rise from 3.7 percent now to 4.4 percent by the end of 2023. Columnist 16 | Capital Finance International >
Unemploymentandwageratesaretheoreticallylinked,andmayholdakey toourimmediateeconomicfuture.

Historically, a rise of this magnitude over one year has always been followed by a recession.

Two consecutive quarterly negative GDP numbers are enough to state that the US economy is already in recession (Canuto, 2022a). With a discrepancy between negative GDP and positive gross domestic income (GDI) numbers in the second quarter, the performance of the labour market did not point to strong deceleration.

There is a general rise in interest rates, as seen in Figure 1, with the exception of China, Japan, and Turkey. In the week of the Fed’s September meeting, central banks in Switzerland, Sweden, Norway, Denmark, Hong Kong (China), the UK, Indonesia, the Philippines, and South Africa all hiked rates, as the European Central Bank and the Bank of Canada had done the previous week. In Brazil, there was no increase, as a strong cycle of interest rate hikes had already occurred.

In July 2022, the European Central Bank (ECB) hiked interest rates for the first time in 11 years. In September, it agreed an increase of 75 basis points. After being at zero or in negative territory for more than a decade, the European Union now has a rate of 0.75 percent. The ECB’s interest rate should continue to rise. In the euro area, industrial production dropped in July 2022 (Figure 2), as a result of the energy price shock, while headline inflation projected for September was already close to 10 percent per year.

Higher inflation has prompted central banks around the world to push their restrictive buttons, with exceptions in China, Russia, Japan, and Turkey (Figure 1 (1/2)).

There is an intrinsic challenge to the globalised economy. Each central bank looks to its own country when deciding monetary policies. In such an interdependent economy, the repercussions go beyond borders. The probability of feedback from

restrictive monetary policies is greater when there is response to a common inflationary problem.

The combination of higher energy prices, US dollar appreciation relative to the euro, China’s growth deceleration, and risks of a second eurozone debt crisis as interest rates and risk premium on Italian bonds rise, means a probable recession in Europe. Taking into account the slowdown in America, a global recession is likely.

A September report by the World Bank (Guénette et al, 2022) noted that despite the global slowdown in growth, inflation in many countries has risen to the highest levels in decades. The global economy is experiencing a period of international synchronicity in the tightening of monetary and fiscal policies — like the one that preceded the 1982 global recession.

A key variable is the evolution of the inflation rate as it hovers around multi-decade highs in Europe and the US. With activity weakening, monetary policy commands strong credibility, and inflation expectations remain stable for Europe and the US. One concern is that high inflation itself raises the risk for second-round effects on wages.

It remains to be seen to what extent price feedback and the inflationary spiral will yield to fiscal and monetary tightening. The downward revision of global growth projections for 2022 and 2023 has been remarkable.

The September 2022 OECD Economic Outlook revised downward its GDP growth projections in 2022 and 2023 (Figure 3). Global growth is likely to slow in 2023 to an annual rate of 2.2 percent. with to the OECD forecasts from December 2021, before Russia’s invasion of Ukraine, global GDP is projected to be at least $2.8tn lower in 2023.


Inflationary pressures increase as unemployment declines or the heating of economic activity starts to conflict with its capacity, and vice-versa.

Interest-rate decisions by central banks depend on the level of aggregate demand and the extent to which potential GDP will be under- or over-utilised. The Phillips Curve expresses the inflation-unemployment dilemma.

In principle, there is a level of interest rates at which demand pressures would not be excessive, or would be insufficient in relation to potential GDP. This is called the neutral interest rate: inflation and unemployment would tend to remain stable. There is a certain rate of unemployment at which inflation remains stable — the non-inflation accelerating rate of unemployment (NAIRU).

The relationship between unemployment and inflation does not necessarily remain stable. There are endogenous changes when an economy spends time above or below the neutral level.

Winter 2022-2023 Issue Columnist 17 | Capital Finance International
Figure 2: Euro-Area All-Industry PMI and Real GDP. Source:J.P.MorganGlobalEconomics. Figure 3: Real GDP Growth Projections for 2022 and 2023 (selected countries, year-over-year, percent). Source:OECD(2022).

In situations of overheating and rising inflation, vicious circles of inflationary feedback can arise. Expectations and behavioural feedback will only be reversed if the economy spends some time below its potential, during which the inertia of inflation will keep it going for some time.

This is illustrated by the shift of the initial short-run Phillips Curve toward a new short-run Phillips curve (Figure 4), after some time spent at point B rather than point A. Stability can then only be reached when the unemployment rate moves back to NAIRU (point C). Any return to point A will demand a period of unemployment rates above NAIRU, coupled with an unwinding of inflation expectations and of wage-price spirals.

Stagflation — significant inflation, high unemployment, and zero or low economic growth — observed in the US in the 1970s and 1980s corresponded to being in a zone to the right of point C. The Phillips Curve had shifted upwards, and inflation only declined after a period of high unemployment.

The following decades saw the period of “great moderation”, the period of low macro-economic volatility from the mid-1980s until the 20072008 financial crisis. The Phillips Curve had shifted down.

After the recession that followed the GFC, the shift seemed to have been confirmed. The US economy took a while to recover but expanded for more than a decade — at rates below historical averages, but corresponding to a period without recessions.

Inflation remained below the Federal Reserve’s two percent target, averaging 1.7 percent throughout the expansion. The looseness of monetary policy — including quantitative easing, or the Fed buying government bonds and mortgages — did not affect inflation (Canuto, 2022d).

Two main factors explain this flattening of the Phillips Curve: the anchoring of inflation expectations at low levels, and the possibilities opened by the globalised economy. Instead of upward pressures on the domestic prices of products that might be in short supply, imports could absorb demand. In the absence of generalised overheating, globalisation could function as a buffer against inflation.

The rise in inflation from pandemic supply shocks and the invasion of Ukraine created the “perfect storm”. Accelerated inflation came to be recognised as something that is not automatically reversible. It reflects the size of fiscal and monetary stimulus in advanced economies, with the channelling of demand for goods creating bottlenecks in supply chains. In addition, the workforce has contracted, reducing employment levels.

The Phillips Curve has shifted again. Gita Gopinath, the IMF’s first deputy managing director, outlined this at the Federal Reserve’s Jackson Hole Economic Symposium in August. Less than a quarter of a percentage point of the rise in inflation can be attributed to unemployment falling below the NAIRU (Gopinah, 2022). In any case, there is now a simultaneous development internationally in the tightening of monetary and fiscal policies, making a global recession likely, as we have discussed.

And now? Where will the Phillips curve go? Will the relationship return to how it was before the pandemic?

According to the Institute of International Finance (Brooks et al, 2022), the effect of the pandemic as a source of shocks on supply chains seems to have ended, given the stage of normalisation of delivery times and the reduction of its upward pressure on inflation. On the supply side, there are still the impacts of the war in Ukraine on global inflation, especially in Europe.

Post-pandemic job supply will remain difficult to predict. There is also the risk that “relative deglobalisation” of value chains undermines the balancing of supply and demand via foreign trade, rather than domestic prices.

On the aggregate demand side, will the longterm low interest rates bring structural changes? Gopinath suggested that while demographics, income inequality, and a preference for safe assets will continue to keep rates low, higher post-pandemic debt and inflationary shocks accompanying the energy transition will work in the opposite direction.

The Philips Curve will keep moving. It is necessary to verify whether monetary adjustment programmes will be effective in keeping inflationary targets as anchors for expectations. This may affect which growth deceleration scenario prevails.

DOLLAR APPRECIATION CONTRACTIONARY? Dollar appreciation may reinforce the Columnist 18 | Capital Finance International
Figure 4: The Phillips Curve. Source: Dritsaki and Dritsaki (2013). Figure 5: G20 Currencies Relative to the U.S. Dollar in 2022. Source: Wolf (2022).


contractionary pressure on the global economy. In emerging market and developing countries (EMDEs), vulnerabilities associated with dollardenominated liabilities may lead to intensified problems.

Take the US Dollar Index (DXY), a measure of the value of the dollar against six other currencies. On September 28, the DXY was at its highest level since May 2002. Compared to the beginning of 2022, the dollar was up 18 percent against the euro, and 26 percent against the Japanese yen and British pound. Figure 5 shows how 20 G20 currencies have so far in 2022 evolved.

A key additional driver of dollar appreciation has been the higher yield in real terms of US assets relative to others. Figure 6 shows the differential in real yields between America and the euro area, as measured by yields on five-year inflationindexed government bonds paired with the eurodollar depreciation. It reflects the more rapid interest rate moves in the US, followed by market expectations about the Fed’s anti-inflation drive.

According to W Denyer, a similar picture may be built for the comparison of risk-adjusted rates of return for other fixed-income assets. Further bouts of dollar appreciation might happen if the other central banks continue to lag in setting interest rates and/or the pace of adjustment by the Fed. One-off events, such as an intense depreciation of the British pound caused by a proposal for unfunded tax cuts, were partly reversed.

Some countries have tried direct interventions in exchange rates instead of — or as a complement to — lifting domestic interest rates. Japan has opted to sell US Treasury bond reserves to try to counteract the yen's exchange rate devaluation against the dollar. Switzerland is also said to be considering selling foreign currency to support the Swiss franc, as well as raising interest rates.

After the 2008-2009 global financial crisis there were “currency wars”, when countries accused

each other of exporting their unemployment problems through significant reductions in domestic interest rates and currency devaluation. A reverse currency war may now be emerging. In the absence of some sort of new Plaza Accord, individual countries’ efforts to evade interest rate adjustments via direct interventions in exchange markets will have limited effect if the underlying factors leading to capital flows are not altered.

Besides hurting US multinational companies’ profits from abroad, and emerging markets’ dollar-denominated foreign liabilities, dollar appreciation may lead to inflationary shocks and tighten monetary policies. Feedback loops of restrictive policies may be sparked.

Where Phillips Curves have moved to will matter.


Since the beginning of 2022, a rapid deterioration of growth prospects, rising inflation and tightening financing conditions have ignited a debate about the possibility of a contraction in global per-capita GDP.

Forecasts for global growth have fallen since the beginning of 2022. They don’t point yet to a global recession in 2022–2023, but Guénette and others call attention to earlier recessions.

Every global recession since 1970 was preceded by a weakening of global growth in the previous year. All previous global recessions coincided with sharp slowdowns or recessions in several major economies.

Despite the current slowdown, inflation has risen to multi-decade highs. To curb the risks from persistently high inflation, many countries are withdrawing monetary and fiscal support. The global economy is in one of the most internationally synchronous episodes of monetary and fiscal policy tightening of recent decades.

These policy actions are understood as necessary to contain inflationary pressures. But their

mutually compounding effects could lead to greater impacts in terms of tightening financial conditions and growth slowdown. These policy conditions were not seen in the 1975 global recession, but they were before the one in 1982.

Guénette proposes three scenarios for 20222024. The first baseline scenario follows closely recent consensus forecasts of growth and inflation, as well as market expectations for policy interest rates. This is the soft-landing scenario, in which global growth is forecast to slow from 2.9 percent in 2022 to 2.4 percent in 2023, rising to three percent in 2024. The slowdown in 2023 would lead to growth in percapita terms approaching that of the downturn episodes of 1998 and 2012. Global trade growth would reflect a broad-based weakening of demand in 2023, before accelerating in 2024.

Growth in advanced economies would slow from 2022 to 2023, before recovering somewhat in 2024. Growth in EMDEs would accelerate from 2022 to 2024 as global headwinds fade and post-pandemic recovery continues.

After peaking at 7.7 percent in 2022, global headline CPI inflation in the baseline scenario would remain high relative to the inflation target into 2023, at 4.6 percent. The projection for 2024, at 3.2 percent, is in line with a gradual approach to the target, about 2.5 percent at the global level in GDP-weighted terms (average 2 percent in the US).

Inflation in EMDEs is projected to decline from 9.4 percent in 2022 to 4.5 percent in 2024, above its aggregate target of 3.5 percent. The decline in core CPI inflation, which excludes the volatile energy component, would be more sluggish. Given this inflation outlook and the expected path of policy rates, short-term interest rates would remain negative, or near zero, in real terms throughout most of the projection horizon.

The degree of monetary policy tightening currently expected may not be enough to restore low inflation quickly enough.

The second scenario — sharp downturn — supposes an upward move in inflation, which would lead to additional synchronous monetary policy tightening by central banks.

Central banks in advanced economies and EMDEs could raise their benchmark policy rates by a cumulative 100 basis points above baseline assumptions until the end of 2023, deciding to sustain this differential through 2024. In this scenario, the global economy would still escape a recession in 2023 but would go through a sharp downturn without restoring low inflation by the end of the next year.

While headline inflation would continue its downward trajectory in 2024, it would do it at a slower pace. The decline in core inflation would be broadly unchanged relative to the baseline

Winter 2022-2023 Issue Columnist 19 | Capital Finance International
Figure 6: U.S. and Euro Area - Real Yields and Exchange Rates. Columnist

The Unavoidable Crash

The world economy is lurching toward an unprecedented confluence of economic, financial, and debt crises, following the explosion of deficits, borrowing, and leverage in recent decades.

In the private sector, the mountain of debt includes that of households (such as mortgages, credit cards, auto loans, student loans, personal

loans), businesses and corporations (bank loans, bond debt, and private debt), and the financial sector (liabilities of bank and nonbank institutions). In the public sector, it includes central, provincial, and local government bonds and other formal liabilities, as well as implicit debts such as unfunded liabilities from payas-you-go pension schemes and health-care systems – all of which will continue to grow as societies age.

Just looking at explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200% in 1999 to 350% in 2021. The ratio is now 420% across advanced economies, and 330% in China. In the United States, it is 420%, which is higher than during the Great Depression and after World War II.

Of course, debt can boost economic activity if borrowers invest in new capital (machinery,

22 | Capital Finance International
Nouriel Roubini:

homes, public infrastructure) that yields returns higher than the cost of borrowing. But much borrowing goes simply to finance consumption spending above one’s income on a persistent basis – and that is a recipe for bankruptcy. Moreover, investments in “capital” can also be risky, whether the borrower is a household buying a home at an artificially inflated price, a corporation seeking to expand too quickly regardless of returns, or a government that is spending the money on “white elephants” (extravagant but useless infrastructure projects).

Such over-borrowing has been going on for decades, for various reasons. The democratisation of finance has allowed incomestrapped households to finance consumption with debt. Center-right governments have persistently cut taxes without also cutting spending, while center-left governments have spent generously on social programs that aren’t fully funded with sufficient higher taxes. And tax policies that favor debt over equity, abetted by central banks’ ultra-loose monetary and credit policies, has fueled a spike in borrowing in both the private and public sectors.

Years of quantitative easing (QE) and credit easing kept borrowing costs near zero, and in some cases even negative (as in Europe and Japan until recently). By 2020, negative-yielding dollar-equivalent public debt was $17 trillion, and in some Nordic countries, even mortgages had negative nominal interest rates.

The explosion of unsustainable debt ratios implied that many borrowers – households, corporations, banks, shadow banks, governments, and even entire countries – were insolvent “zombies” that were being propped up by low interest rates (which kept their debtservicing costs manageable). During both the 2008 global financial crisis and the COVID-19 crisis, many insolvent agents that would have gone bankrupt were rescued by zero- or negativeinterest-rate policies, QE, and outright fiscal bailouts.

But now, inflation – fed by the same ultraloose fiscal, monetary, and credit policies – has ended this financial Dawn of the Dead. With central banks forced to increase interest rates in an effort to restore price stability, zombies are experiencing sharp increases in their debtservicing costs. For many, this represents a triple whammy, because inflation is also eroding real household income and reducing the value of household assets, such as homes and stocks. The same goes for fragile and overleveraged corporations, financial institutions, and governments: they face sharply rising borrowing costs, falling incomes and revenues, and declining asset values all at the same time.

Worse, these developments are coinciding with the return of stagflation (high inflation alongside

weak growth). The last time advanced economies experienced such conditions was in the 1970s. But at least back then, debt ratios were very low. Today, we are facing the worst aspects of the 1970s (stagflationary shocks) alongside the worst aspects of the global financial crisis. And this time, we cannot simply cut interest rates to stimulate demand.

After all, the global economy is being battered by persistent short- and medium-term negative supply shocks that are reducing growth and increasing prices and production costs. These include the pandemic’s disruptions to the supply of labor and goods; the impact of Russia’s war in Ukraine on commodity prices; China’s increasingly disastrous zero-COVID policy; and a dozen other medium-term shocks – from climate change to geopolitical developments – that will create additional stagflationary pressures.

Unlike in the 2008 financial crisis and the early months of COVID-19, simply bailing out private and public agents with loose macro policies would pour more gasoline on the inflationary fire. That means there will be a hard landing – a deep, protracted recession – on top of a severe financial crisis. As asset bubbles burst, debtservicing ratios spike, and inflation-adjusted incomes fall across households, corporations, and governments, the economic crisis and the financial crash will feed on each other.

To be sure, advanced economies that borrow in their own currency can use a bout of unexpected inflation to reduce the real value of some nominal long-term fixed-rate debt. With governments unwilling to raise taxes or cut spending to reduce their deficits, central-bank deficit monetisation will once again be seen as the path of least resistance. But you cannot fool all of the people all of the time. Once the inflation genie gets out of the bottle – which is what will happen when central banks abandon the fight in the face of the looming economic and financial crash –nominal and real borrowing costs will surge. The mother of all stagflationary debt crises can be postponed, not avoided. i


Nouriel Roubini, Professor Emeritus of Economics at New York University’s Stern School of Business, is Chief Economist at Atlas Capital Team, CEO of Roubini Macro Associates, Co-Founder of, and author of the forthcoming MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them (Little, Brown and Company, October 2022). He is a former senior economist for international affairs in the White House’s Council of Economic Advisers during the Clinton Administration and has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank. His website is, and he is the host of

Winter 2022-2023 Issue | Capital Finance International 23
"With governments unwilling to raise taxes or cut spending to reduce their deficits, centralbank deficit monetisation will once again be seen as the path of least resistance."

Joschka Fischer:

The Birth of a New International Order

e are witnessing an unprecedented confluence of major and minor crises. From the COVID-19 pandemic, surging energy prices, and the return of inflation in developed and developing economies, to fractured supply chains, Russia’s criminal war in Ukraine, and climate change, many of these crises are signs

not just of decay but of a new world order being born.

As the remnants of the twentieth century’s bipolar order finally disappear, a new global pentarchy is coming to the fore. The United States and China – this century’s two military, technological, and economic superpowers – will

be the dominant players, but Europe, Japan, and India will exercise meaningful influence over large swaths of the planet.

A big question mark hangs over Russia, because its future status, capacities, and strategic posture will depend on the outcome of its reckless war of aggression. Under President Vladimir Putin,

24 | Capital Finance International
W > ©ProjectSyndicate2022

Russia has clung desperately to the past, seeking to recreate the twentieth or even the late nineteenth century. But with its catastrophically misguided effort to destroy Ukraine, it ultimately is destroying itself.

A Russian military defeat in Ukraine is already a certainty – a matter of when, not if. But it is still far too early to foretell the likely consequences. Will Putin’s regime survive, or will Russia’s defeat usher in another phase of internal decay and disintegration. Until that question is resolved, we cannot yet know whether Russia will try to maintain its old claim to hegemony in Eastern Europe and much of Eurasia.

If the Kremlin is forced to abandon that claim, its role as a world power would probably be over. To be sure, even a decrepit, humiliated Russia, rather than going into geopolitical hibernation, would most likely remain a major source of instability in the new world order, and especially on the European continent. But it is now clear that Russia’s massive nuclear arsenal is no longer sufficient to secure its geopolitical status in the twenty-first century. Its economy is being decisively weakened as the rest of the world moves to phase out fossil fuels – the backbone of the Russian economy.

Whereas Russia poses new risks because of its fragility and decay, China will do so by dint of its increasing wealth and might. Owing to the massive wave of globalisation that began in the early 2000s, China managed to lift itself out of poverty and position itself to achieve highincome status. And with the 2008 financial crisis partly discrediting the West, China has been able to expand its own global leadership role and present itself as a global superpower alongside the US.

Unlike the Soviet Union during the Cold War, however, China has not made the mistake of focusing solely on its military power. On the contrary, its global rise reflects its embrace of integration into US- and Western-dominated world markets by serving as the world’s “extended workbench,” while investing heavily

in competing with the West on the technological and scientific frontiers. The Chinese certainly have not held back on military investment, but they have not allowed spending on defense and security to crowd out everything else. The defining difference between China and Russia today is that, unlike Putin, the Chinese leadership has been living in the twenty-first century for quite some time.

The recent G20 summit in Bali laid bare this fundamental difference of outlook and purpose. Whereas Russia found itself diplomatically isolated, China was central to all the discussions and the shaping of the final communiqué. Though they have not adopted the Western line on the Ukraine crisis, large countries such as China and India used the occasion to distance themselves noticeably from the Kremlin, decrying its war policy and nuclear threats. If the in-person talks between US President Joe Biden and Chinese President Xi Jinping help to deflate Sino-American tensions, the Bali summit will have opened the door to reshaping international relations in the twenty-first century.

The outcome of the US midterm election offers yet another reason for hope, as the widely anticipated Republican “red wave” failed to materialise. The GOP failed to take the Senate and only barely secured a majority in the House of Representatives. As in 2018 and 2020, former President Donald Trump once again held his party back. Most Americans do not want a return to his “America first” isolationist policies.

Together, the US midterms and the Bali summit offer cause for optimism at an otherwise fraught moment. But we will need much more progress toward global cooperation. Ultimately, our two biggest crises – Russia’s retrograde war in Ukraine and climate change – can be overcome only if the world’s key powers find a way to work together. i


Joschka Fischer, Germany’s foreign minister and vice chancellor from 1998 to 2005, was a leader of the German Green Party for almost 20 years.

Winter 2022-2023 Issue | Capital Finance International 25
"Unlike the Soviet Union during the Cold War, however, China has not made the mistake of focusing solely on its military power."
"The United States and China – this century’s two military, technological, and economic superpowers – will be the dominant players, but Europe, Japan, and India will exercise meaningful influence over large swaths of the planet."




Germany and the German people struggle to become comfortable when donning the mantle of leadership that circumstance has thrust upon the country. The nation and its leaders are visibly shocked by the rapid demise of the old-world order and the unfolding “Zeitenwende”: the epochal tectonic shift that began with a global geopolitical rebasing and reached a disconcerting apex with Russia’s war of aggression against Ukra ine.

Whereas Germany traditionally strives to uphold the principles of the UN Charter as broad guidelines for international order and equilibrium, the country now faces the much more restricted and complex task of safeguarding peace in Europe, imposing compromise on quibbling members of the EU, and securing a meaningful role for the continent in a multipolar world. And, of course, its economy must continue to ensure financial stability.

It's a tall order for any chancellor and particularly one expected to fill the shoes of Angela Merkel who kept Germany, Europe, and indeed the world on a fairly even keel during her 16 years in office. The baffling question facing all German

chancellors is how to lead without being seen to do so. Merkel deployed icy looks and faint smiles to signal her mood. When genuinely angry, she usually just refused to comment or engage. That was often enough to chastise unruly interlocutors and bring them back in line.

Chancellor Scholz possesses no such skills and is less subtle in his demeanour. To the surprise of many, he not only condemned Russia’s invasion of its neighbour in the strongest of terms but almost immediately unveiled a €100bn rearmament drive to equip the Bundeswehr for a “new era” of hot war on European soil.


Out the window went decades of carefully choreographed (Neue) Ostpolitik that sought

to ease East-West tensions through active engagement. The hallmark foreign policy of the Social Democratic Party (SPD) was introduced in the early 1970s by then-Chancellor Willy Brandt who, in 1971, received the Nobel Peace Prize for the initiative.

It has not escaped the commentariat that it was another SPD chancellor who ditched the policy overnight and now openly calls for confrontation: “This is not just any war, but one waged by a nuclear-armed great power to eliminate an independent nation.” However, Chancellor Scholz’ volte-face has since met stiff opposition from his coalition partners. Many practicalities also conspire against Germany’s newfound determination to face up to Russia. | Capital Finance International Cover Story 26

The country has been painfully slow to dispatch weaponry to Ukraine, citing its own depleted stock of hardware or the refusal of others –foremost Switzerland – to grant export licenses. Almost daily, Chancellor Scholz is being accused in the press of indecisiveness for his apparent refusal the lend urgency to the delivery of military kit.

Some NATO allies entertain a lingering suspicion that the German government may be playing for time. Berlin’s fence-sitting is at odds with Chancellor Scholz’ initial bravado but could be rooted in the thinking that, post war, some sort of entente must be found that accommodates Russia. After all, that country is not about to vanish and must somehow be inserted in a future concert of nations.

Aside from the geopolitical conundrum facing Germany – is its first line of defence located on the Elbe or the Dnieper? – the Zeitenwende also poses an existential threat to the country’s economy and with that to nearly all of Europe. Without having any ready solutions, Chancellor Scholz is acutely aware of the danger to an economy largely based on and powered by cheap and plentiful energy.


Early in December, BASF CEO Martin Brudermüller said that his company would downsize in Europe “as quickly as possible and also permanently.” In Ludwigshaven, at BASF’s flagship facility, several production lines have already been mothballed. The ammonia plant was shut down whilst the run rate of the

acetylene facility was sharply reduced due to the high price of the natural gas that is used both as feedstock for chemical processes and fuel for the power plants.

Brudermüller’s blunt statement raised fears in Berlin that the company may in time shutter its vast Ludwigshaven complex entirely and shift production to China where BASF is building a €10bn chemical plant in Guangdong.

Economy Minister and Vice-Chancellor Robert Habeck noted that some were taking an “almost sensual pleasure” in predicting Germany’s industrial decline. Habeck went on to state that the Scholz cabinet is determined to, and capable of, preventing that. Almost on cue, Chancellor Scholz announced a €200bn support package

Cover Story 27 | Capital Finance International

for households and businesses, including large ones, struggling with the high cost of energy.

Large industrial users such as BASF will be able to buy natural gas at a rate of 7 cents per kWh for up to 70% of their consumption until then. Any part of the allotted energy contingent not used may be resold which could net the chemical giant a profit of some €2.6bn. However, Brudermüller may not qualify for the state largesse which is conditional on keeping production and jobs in Germany.


Scholz faces more trouble on the domestic front. According to an opinion poll commissioned by Der Spiegel, just 29 percent of those queried expressed confidence in the coalition’s ability to successfully navigate the multiple crises.

However, up to 45 percent of the respondents awarded the ‘traffic light’ coalition a “very negative” rating. To add to the coalition’s troubles, the powerful Bundesverband der Deutschen Industrie (BDI, Federation of German Industry) criticised the government for the slow pace of the promised fiscal reforms.

The BDI warned that one in every five of its member companies is actively working to shift production out of the country, undermining Germany’s famous Mittelstand – the vast universe of small- and medium-sized businesses that form the backbone of the country’s economy.

BDI-Chairperson Siegfried Russwurm appealed to Chancellor Scholz for more speed and determination in readying Germany for the new realities: “If this coalition wants to be truly progressive, it must make haste with fiscal reform. If not, domestic investment will evaporate, curtailing growth and undermining our prosperity.”

Part of Scholz’s troubles both at home and abroad may be ascribed to his reluctance to lead and, almost by extension, his tendency to dither and wobble when the going gets proverbially tough. A great communicator he is decidedly not, preferring to murmur instead and disappear into the background such as when he hosted the G7 meeting in Bavaria where the chancellor was mysteriously absent from the traditional group photo.


“We have a chancellor who refuses leadership,” says Stefan Meister of the German Council on Foreign Relations, a policy think-tank: “He only acts in the context of our allies but makes no effort to lead those alliances.”

On the other hand, Chancellor Scholz is a stranger to flights of fancy and grandstanding; he tries to de-escalate by looking for compromise instead – an exceptional quality amongst contemporary world leaders.

An example of inept communication came during a speech at a recent convention of German Catholics when Scholz mused if more violence is the answer to violence and if peace can only be established by force. Speaking to an audience of pacifists, many wondered if the chancellor was pandering to those present or questioning their beliefs.

Poor communication, and perhaps a fear of offending his less belligerent coalition partners, also opens the door to unmerited criticism of Germany’s support for Ukraine. In relation to the size of its economy, Germany is doing as much for Ukraine as most EU member states.

The country supplied some 2,500 anti-aircraft missiles, many thousands of anti-tank weapons, over 15m rounds of ammo, and a long list of other gear. Chancellor Scholz has now promised to send the IRIS-T SLM medium-range surfaceto-air defence system which can shield a city as large as Kyiv from missile attacks.

Foreign Affairs Minister Annalena Baerbock pointed out, perhaps superfluously, that Germany has been reluctant to supply weapons to a region where its own forces killed millions during World War II. However, former Polish Foreign and Defence Minister Radoslav Sikorski, admitted that he, and many of his fellow Poles, now fear German power much less than German inactivity: “It may have taken Putin’s invasion of Ukraine for Europe to finally become comfortable with German military power.”

It is quite a change for a country that until last year refused to export military hardware to any country engaged in, or at risk of, conflict. For over 70 years, Germany has been steeped in pacifism. An aversion to national pugilism has thus become part of the nation’s psyche. The woefully ill-equipped Bundeswehr was a source of pride rather than embarrassment.

To reverse course and admit that the axiom from Roman times “si vis pacem, para bellum”

Cover Story 28 | Capital Finance International
Chancellor Olaf Scholz

(if you want peace, prepare for war) may hold some truth takes an almost Herculean political effort that also involves much nose holding. Rolf Mützenich, SPD-leader in the Bundestag, admitted that he had to “grit his teeth” when voting to approve the €100bn supplementary armaments budget.


Cautious by nature, but a capable administrator, Chancellor Scholz must deal with a fair degree of scepticism as well – and told-you-so recriminations. Under his predecessor Merkel, Germany lost considerable goodwill in Europe and elsewhere with its intransigence on completing the €11bn Nord Stream 2 pipeline project (now defunct and furtively shot to bits by an unknown power) and on its rejection of warnings against depending too heavily on Russia for its energy needs. When war broke out, and natural gas flows dwindled to a trickle, it suddenly dawned on Berlin that the country possessed not a single terminal to receive LNG imported from overseas.

Eastern EU member states showed both surprise and barely disguised contempt when Chancellor Scholz recently presented a set of interesting proposals to reform the EU’s foreign policy decision-making process, including stripping member states of their veto power. Polish members of the European Parliament questioned the “arrogance” of the initiative by a country that has followed rather than led on Ukraine and other matters of continent-wide importance – and had refused to listen to its partners about Russia and energy.

Chancellor Scholz has repeatedly called for a German diplomacy without naiveté. The coaxing of troublesome partners with Wandel durch Handel (Change through Trade) seems to have been confined to history – or at least for as long as President Vladimir Putin holds sway over the Kremlin.

That naiveté – aka the Merkel Consensus –reached its highpoint during the Merkel years when Germany trusted that Moscow would prove a reliable energy partner. Germany tacitly accepted Russia’s desire for influence over its immediate neighbourhood as reasonable provided Moscow cooperated with Europe in maintaining the peace. This also helps explain Europe’s tolerance of Belorussia with its strongman and Kremlin stooge Aleksandr Lukashenko even after that dictator forced down a Ryanair plane on a flight from Athens to Vilnius to arrest a prominent dissident.


In November, Scholz became the first western leader to visit Chinese president Xi Jinping since the outbreak of the Corona Pandemic. In what was widely considered a reaffirmation of Germany’s foreign policy independence, the German leader signalled a desire to broaden and intensify economic cooperation. To that end, he travelled with an entourage of executives of iconic corporates such as Volkswagen, Bayer, and BASF.

Chancellor Scholz said that he and President Jinping agreed that Russia’s nuclear threats were “irresponsible and highly dangerous” – words left out in the Chinese telling of events. Both leaders also expressed a need to work together in “times of change and turmoil.”

The short trip – it lasted just 11 hours – sparked concern in Europe and elsewhere with some questioning the wisdom of investing heavily in China given the not insignificant risk of the country making a move on Taiwan. French president Emmanuel Macron was disappointed that Scholz failed to coordinate his China trip with others in the EU and warned the chancellor that he risked becoming isolated.

The Paris-Berlin axis, often described as the engine driving the EU, is showing disconcerting

cracks. French concerns centre on the geostrategic consequences of the war in Ukraine which is seen to enhance Germany’s importance and push France to the side-line. Differences on a host of topics – including defence, energy, subsidies, and EU expansion – have caused a rift in cross-Rhine relations.

The surprise announcement that Germany would acquire US-made F35 fighter jets and Patriot air defence batteries has irked Paris as it leaves European defence initiatives such as the Future Air Combat System in limbo. France and other EU member states are also upset by the €200bn in state aid Chancellor Scholz has earmarked to support businesses and households through the energy crisis. France has argued that it’s impossible to compete with such a high volume of subsidies whilst Germans reply that the French are in no position to dispense lessons about the iniquity of subsidies.


If anything, the differences underscore the renewed sense of pragmatism now reigning in Berlin. In an editorial, Le Figaro noted that France is content to talk about sovereignty whilst Germany exercises it. That exercise in sovereignty may be understated, it is nonetheless real.

And that’s the essence of the German Chancellor: taciturn, considerate, low-key yet determined to carefully plot a course through the political and diplomatic minefields that the country faces.

Scholz seems much aware of the inner strength emanating from Western democracies – and of their tendency to react slowly to emerging threats. As US diplomat and historian George Kennan surmised: Democracies are like prehistoric monsters largely indifferent to what happens in their vicinity - “you practically have to whack off their tail to elicit a response. However, when that tail is whacked hard enough, they react with speed, determination, and strength.”

President Putin was apparently less familiar with the notion: a miscalculation that has cost him dearly. Russia’s annexation of the Crimean Peninsula was a mere pinprick that failed to rouse the monster.

Scholz’ Zeitenwende – a pivot of historical significance – is the clearest sign yet that Germany has shifted track – and where Germany goes, Europe follows. It may take some time for Germans to get used to, and comfortable with, the position of leadership thrust upon their nation. Germany has been pulled out of its comfort zone and is slowly preparing to flex its not inconsiderable industrial muscle and build up its military whilst at it.

Chancellor Scholz is not one for hype. But it’s the quiet ones that need to be watched, because they mean business. i

Winter 2022-2023 Issue Cover Story 29 | Capital Finance International

Lord Waverley: New

UK, Commonwealth Advantage and the Electronic Trade Documents Bill

Thinking in the

Determining the purposeful role and contribution of government is a necessary start, with government ideally understanding what its principal role should be; and I venture that of being an enabler, creating a conducive environment, but then stepping aside to let professionals run with the ball. I leave the dire questions on tax levels, the levelling-up strategy, the planning approvals environment, housing needs and general social conditions and focus for the moment on international trade and export promotion. Trade is often derided but is an integral component, as is the relentless need to attract inward investment to enable funding of essential infrastructure.

The BREXIT debate rumbles on with the new administration reflecting on the best model for our relationship with the European Union, with the Norwegian or Swiss models being scrutinised. Hardline Brexiters are seemingly holding firm with the possibility of further acrimonious internal political debate being reopened. That is in noone’s interest. There is a sense of exasperation by the business community that politicians are overcomplicating the whole question, and that friendly frictionless bilateral relations are all that counts in the national interest. Pragmatic initiatives are on the horizon. One of the essential ingredients to make progress with the global trading community is to combine innovation, build efficiency and create sustainability and to do so by putting the jigsaw into place, if you will. Currently there are excellent different components that could usefully be harnessed into a unified approach; however, none is dependent on the other.

I point to three initiatives. The first lends itself well as the Commonwealth is fertile ground given the commonality of common law and language, which should be viewed as the bedrock of a Global Britain. It is a free trade agreement template initially targeting Commonwealth member states,

excluding the two that are members of the EU as they are responsible to internal protocols, that can be adjusted by country to address any specific anomalies. I was originally approached some time back by a well-meaning US interest to stitch together a US/Commonwealth agreement, including the UK, of course, that would unlock the UK/US circumstance, given that the bilateral free trade agreement is moribund. This Commonwealth approach would consist of making a template of what is expected to be covered in a trade agreement with language options built in.

The launch of the Institute for Free Trade (IFT) analysis on a model commonwealth free trade agreement (FTA) last month. The “core” deal can be added to or subtracted from in order to meet the individual requirements of each commonwealth nation. The designers have crafted an agreement which can serve the needs of every Commonwealth nation from India to the Solomon Islands.

The “Commonwealth Advantage” reflects cultural and historic ties, complementary geostrategic interests as well as compatible legal and administrative systems. Accepting as equivalent health, sanitary and phytosanitary standards which aim at equivalent levels of evidencebased protection (defined by the UN Codex Alimentarius) will also liberate Commonwealth agricultural products for free global export. The variety and heterogeneity of the nations of the Commonwealth will lower food prices yearround at a time of inflation, as well as offering developing countries the opportunity to compete in profitable developed markets around the world.

This “trade, not aid” approach has arguably been the driving force behind decades of growth in free trading nations such as Taiwan, South Korea, Singapore, and post-war Japan, as well as export-driven success stories China and Columnist 30 | Capital Finance International >
Whilst it is undeniable that we are all going through challenging times in the UK, there is recognition in certainquartersthatwecannotcarryoninwaysofold; andthatinnovationandthinkingoutsidetheboxhave become the imperatives. Now is the time to venture forthwithfreshideasandnewconcepts.

Indonesia. Unfortunately, many Commonwealth nations have faced large tariff and non-tariff barriers to trade, denying developing nations the income to improve domestic value-chains and leaving them particularly reliant on foreign aid, and geopolitical rivals such as the PRC, for their development objectives. These areas are the bedrock of modern trade agreements, and serve the growing opportunities in internet, in research and development, as well as financing of infrastructure projects within the Commonwealth.

While these deep trade agreements are to the advantage of smaller commonwealth nations, who would likely have no opportunity to negotiate such a degree of cooperation with larger Commonwealth nations such as the UK until “priority” talks with the US, India and others are completed, there are some important benefits for larger nations, too. Having modern trade agreements with a diverse set of economies, complete with an implementation of electronic trade documents and digital trade provisions, creates an immense dataset vital both to supplychain management, private sector investment as well as governmental industrial strategy.

Flexibility would allow nations to reap the benefits of agreement where they find it, on an opt-in basis, rather than negotiate themselves into a stalemate by withholding agreement until everything is agreed; a moment which may never arrive.

The second is a dedicated, big-data analytics platform be made readily available to encompass advanced data analytics and modelling for foreign trade data relating to supply chains to consolidate multiple datasets already used by the International Trade Council. These datasets, with additional overlays into a single database, could be used for analysis of markets and supply chains, forecasting and predicting market behaviour. This would enable corporates to validate their supply chains, understand market pricing, monitor competitors, forecast the market and would allow governments seeking to assist their exporters to find new markets, identify priority investment FDI targets and model future market demand, growth, customers and suppliers. The good offices of the International Trade Council are making this available resulting from its agreement with 39 countries that will be packaged electronically and presented via newly branded ADAM; Advanced Data analytics & Modelling for Foreign Trade data.

Thirdly, and this brings me to a major piece of legislation that has started its parliamentary passage in the United Kingdom. The magic of the Electronic Trade Documents Bill is that it is all the more beneficial for being an enabler process, free for the world to join up to—just follow the provisions. If the answer to today’s ails is in the timing, this initiative hits the spot with the legal enactment necessary to a more competitive world for the benefit of all.

Winter 2022-2023 Issue Columnist 31

Allowing businesses to use electronic trade documents when buying and selling internationally, making it easier, cheaper, faster and more secure for them to trade, to remove an obstacle to progress and to pave the way for international trade and trade law to be brought up to date is the objective.

Passing this law would be a victory for global trade and for the United Nations, as the legislative work is led through the UN Model Law on Electronic Transferable Records—MLETR. By allowing electronic documents and physical documents to be used in parallel, the transition to paperless trade can be made an evolutionary process where the adoption of electronic trade documents will take place when different stakeholders in trade and trade finance are ready to take the step to paperless trade.

Radical change in removing paper-based trading documents will make for a faster, lower-cost, more resilient and more liquid world of trading, leading towards transparent digital supply chain management. It will be especially good for small businesses. While not all problems can be solved at once, recognising a practical step-by-step approach to solve one would be an excellent beginning.

This will allow for the use in electronic form of certain trade documents, such as bills of lading and bills of exchange, which currently must be on paper and physically possessed. The Bill is not mandatory: it is a permissive and facilitative piece of legislation and although only small in content, its impact will be huge. It will help to boost the UK’s international trade, already worth more than £1.4 trillion, by providing benefits to UK businesses over the next 10 years of £1.1 billion.

Business-to-business documents such as bills of lading, which are contracts between parties involved in shipping goods, and bills of exchange, which are used to help importers and exporters complete transactions, currently must be paperbased. Digital trade documents will be put on the same legal footing as their paper-based equivalents, giving UK businesses more choice and flexibility in how they trade.

The provisions cannot be overstated. Whether it is lowering transaction costs associated with trade by reducing resourcing and operational costs and increasing productivity; whether it is increasing efficiency and encouraging business growth by facilitating the development of digital products and services; whether it is delivering environmental benefits through a reduction in paper documents and emissions from couriering the paper documents; or, critically, whether it is increasing the security, transparency,

traceability and transactional data of the flows of goods and finance—the Bill has the potential to revolutionise UK businesses’ ability to trade across borders and lay the foundations for the future digitisation of global trade approach and ambitions.

Improving logistical flow that will address the impediment to the speed of payments, and the current need to move paper to discharge goods and receive payments, bringing more opportunities as we align with the MLETR and benefit from digital trade corridors and individual country compliance. This will allow for documents that carry value and promises to be drawn up and signed in digital form, provided that the system or document fulfils the listed requirements.

A number of trade documents with which domestic and cross-border trade would become significantly more efficient and affordable for all are listed, but small and medium-sized entities would benefit the most. This will create significant opportunities for smaller importers and exporters globally, one reason being that the law of England and Wales is often used when parties have difficulties agreeing on the jurisdiction in which to settle disputes.

The following are issues that need to be reconciled: that international digital identities and digital signatory laws are sufficiently harmonised; that international freight tracking systems with a lack of interoperability is a hurdle that needs to be overcome and that legal entity identifiers are accepted universally.

Significant work is being done and progress is being made in these areas by industry organisations, but this needs to be supported by Governments to pave the way for international harmonisation and adoption. It will be a balancing act to create international standards in such a way that creates legal certainty on the one hand without hampering further adoption of new technologies or innovation on the other.

The United Nations Model Law on Electronic Transferable Records is a very well-designed framework, balancing the need for commercial certainty, relying on current and internationally well-harmonised substantive laws, with allowing for electronic trade documents, providing that the provisions in the MLETR are met.

The Bill does not change the function of the instruments listed. All the safety mechanisms these instruments have and cater for remain intact. Allowing them to be in electronic format means that they will become more efficient and significantly safer. I underline, however, that the Bill does not address the quality of signatures or how to establish identities, other than to say

that they need to be “reliable”. The European Union has a list of trusted digital signature sites and for trade it is important that different parties can use simple verification processes to trust the documents coming from another party, but it is up to the contracting parties to define the method to ensure reliability.

What is reliable today, however, will differ tomorrow as new technology evolves. Legislation that is principles-based rather than technically prescriptive is more favourable. The adoption of the EU regulation for eID and other electronic trust services has been slow in cross-border trade, the main reason being that these have not been readily available and easily accessible as technical solutions. The result has been paperbased trade rather than electronic. Although not perfect, in some cases a lower standard is the stepping-stone for adoption, especially in crossborder dealings, provided that the parties have agreed on where to settle disputes.

These are early days, with much to do but no time to lose. All that I have drawn attention to however is the beginning of an exciting journey that ticks the boxes and I commend it accordingly. i


Lord (JD) Waverley House of Lords, UK Parliament Crossbench Member

Co-chair All Party Parliamentary group: Trade & Investment All Party Parliamentary group: Future UK’s Freight & Logistics sector

Founder Columnist 32 | Capital Finance International
"A number of trade documents with which domestic and cross-border trade would become significantly more efficient and affordable for all are listed, but small and medium-sized entities would benefit the most."

World Economic Forum’s Meeting Agenda Takes a Tilt at ‘Dark Topics’, Ai-Da

and Mind Control...

In the mid-1800s, Charles Babbage, an English mathematician, mechanical engineer and inventor, devised a series of steam-powered “calculating machines” — now recognised as the world’s first computers.

He was assisted in his quest by fellow mathematician Ada Lovelace, the only legitimate child of the poet Lord Byron. In 2019, Lovelace’s part in sowing the seeds of a revolutionary technology was finally recognised when a robot was named after her: Ai-Da.

In October 2022, Ai-Da became the world’s first robotic artist, and was submitted to be “questioned” by a House of Lords inquiry into the future of AI-created art. While giving evidence, the robot had to be rebooted — but not before she warned the assembled peers that artificial intelligence was a threat to human artists.

A year earlier, Ai-Da — looking and sounding a bit like Lady Penelope from the 1960s televised puppet show Thunderbirds — delivered a Tedx talk in Oxford. She told her audience: “New technologies bring good, bad and banal, but since they are created, used, and wielded by humans, significant care needs to be taken. I like the works of the cautionary thinkers in the 20th Century — George Orwell and Aldous Huxley — who knew truth was illusive. Power could be manipulated, and human action and inertia/ inaction (have) consequences.”

Ai-Da went on to say that the potential harms of new technologies in human hands should be addressed. “Technological control of minds should concern us in situations where power can be abused,” she said. “The manipulation of consciousness is to be taken seriously. These are dark topics. We need to engage with these issues and ask questions of the direction new technologies are being taken.”

These “dark topics” will be central to many of the conversations due to take place at the World Economic Forum (WEF) in Davos, Switzerland, in January.

A perfect storm of coinciding events has plunged the global economy into turmoil, and the annual alpine get-together of world leaders, political thinkers, financiers and theorists will find itself at a challenging crossroad.

While the WEF’s mission statement is to improve the world, critics regard the organisation as a gathering of elites intent on maintaining an outdated capitalist status quo for their own benefit. It focuses on obstacles to growth, and one thing is agreed: tech is leading us into the future — to recovery or ruin.

The growing disillusion with globalisation has been a recurring theme at WEF gatherings in recent years. A social backlash has been worsened by the lingering effects of the pandemic, the war in Ukraine, energy crises, inflation, and the costof-living squeeze.

Technology has created a digital world empire which has brought wealth to some, but left many more confused and feeling abandoned. With rising prices, falling incomes and increasing threats to security, many warn that the risk of widespread social unrest has never been greater

Ahead of the 2023 WEF meeting, managing director Saddia Zahidi reported gloomy results from the most recent survey of 50 of the world’s leading economists. “Vulnerability has increased for large parts of the global population, both in developed and developing economies,” she said. Ninety percent of respondents expected real wages to fall. Millions would be affected by the cost-of-living crisis, and for some, it would be unmanageable, she added.

The trend towards deglobalisation was likely to continue, she believes. “It is going to be one of those profound mega-trends for some time to come,” she said. While she saw were no silver bullets, there were some silver linings: “The shift towards reskilling to better prepare the labour market for the future of work has to be pushed through by governments.”

This was a theme touched upon in August 2022 by Israeli historian and writer Yuval Noah

Harari, the author of Sapiens: A Brief History of Humankind, and a top advisor to the WEF. In a recent interview, he said the advance of AI meant the world “no longer needed the vast majority of its population”.

Those soon to be replaced by robots and tech were beginning to question their personal value, Harari said. This, he said, was at the root of the backlash against the liberal order. The central place in society held by “common people” was being challenged, and individuals were being deprived of traditional roles.

“Part of what might be going on is that people realise ‘the future doesn’t need me. Maybe some crumbs will come my way, like universal basic income’. But it’s much worse psychologically to feel that you are useless than to feel you are exploited.

34 | Capital Finance International >
‘It’sworsepsychologicallytofeelthatyouareuselessthanto feelyouareexploited’—YuvalNoahHarari
"The growing disillusion with globalisation has been a recurring theme at WEF gatherings in recent years."

“In the early 21st Century, we just don’t need the vast majority of the population because the future is about developing more and more sophisticated technology.”

Nevertheless, the advance of AI and hi-tech came with potential solutions attached, Harari believes. AI will open opportunities, creating more interesting roles which require high levels of skill and education. “A lot of the jobs which are being displaced are actually kind of boring,” he notes, “and don’t really tap into the core of what the human is.” A new role for humans could be making communities better places to live — a “soft skill” where humans can still outperform machines.

WEF economists are cautiously optimistic that the global economy can be reset to emerge stronger, more environmentally aware, and more

equitable and sustainable. But the economic tumult of the past two years has taken a toll.

According to a survey by California-based digital intelligence firm Constella, nearly half of companies surveyed reported increased security threats and incidents related to social, economic and geopolitical unrest in 2021.

These incidents included physical threats against workers and business premises, often by disgruntled former employees and customers, or activists. There were even reports of shootings, and travel risks to executives. By far the greatest risk, the survey reported, was the threat of cyber-attack on vulnerable company computer systems.

The internet — which has enabled the development of globalisation — is being

exploited by those opposed to global capitalism. Businesses are urged to invest in proactive scrutiny of the dark web to identify threats.

Charles Babbage and Ada Lovelace could never have imagined where their steam-driven analytical engines would lead. It is said that Ada’s mother, fearful that her daughter would inherit Lord Byron’s “hot blood”, pushed her towards mathematics to supress any mad, bad or dangerous tendencies.

Her robotic quasi-namesake, Ai-Da, is both level-headed and, allegedly, fond of poetry. Perhaps those attending the WEF meeting in January — seeking solutions to the crises of an increasingly hot-blooded world — will recognise that now is the time for calm, clear, logical and rational thought. i | Capital Finance International 35


Stepping-up ESG Impact via Scoring and Analytics

At Pollen Street, ESG is core to our strategy, purpose, and culture.

We drive positive change through our investments, whether by funding green alternatives for homes and transport, accelerating financial inclusion, or driving regional economic growth by investing in businesses that help to reduce social and regional disparities.

At the same time, we want to promote and advance sustainable growth throughout our ecosystem. This means embedding and improving ESG performance, and making sure we and our underlying investments in private equity and credit are prepared to keep abreast of the rapid changes in regulatory requirements and disclosures. We do this through a consistent approach to ESG data-scoring and benchmarking which we’ve developed over the past few years.

A concept of a “triple bottom line” has emerged in businesses around the world, based on the idea that firms should commit to measuring their social and environmental impact in addition to their financial performance. Our work to measure and improve our ESG performance helps us to ensure that the Pollen Street portfolio is continuously improving, and comprised of businesses with sustainable growth at their core.

For us this encompasses our drive for long-term, sustainable performance, and to help companies deliver impactful products and propositions. We aim to be progressive, and aligned with best practice for ESG reporting.

We’ve all heard about the advances and proliferation in data around the ESG agenda — but how does this really add any value and insights into how a business is embedding ESG?

As a private capital manager, Pollen Street has access to meaningful private market data on current and prospective portfolio companies. Those data relate to financial and sustainability performance — we don’t have to rely on what’s in the public domain. This enables us to develop an understanding of relative performance on key dimensions.

We treat our approach to ESG data and analytics with the same rigour that we approach any other strategic driver of our business, which means we are better equipped than ever to track and build on our positive impact.

We collect over 50 data points for each portfolio company, on an annual basis. We’ve used internal talent and expertise to develop our proprietary scoring system based on ESG factors. The information and analytics are incorporated into our data warehouse, which we use as a track record — and single source of truth.

The scoring is based on internal indices and benchmarks, and informed by categories commonly used by ratings agencies such as MSCI, investor and industry standards (including ESG Data Convergence Initiative and SFDR). What is relevant for Pollen Street is the assessment of ESG sustainability and practice across our investments.

This means that we can easily track progress against our targets, create league tables for investments in private equity and credit, and set a base level for improvement. We use reporting dashboards to engage portfolio companies on action plans to improve their scores and overall ESG practice.

The same scoring system is used in the investment process, as part of our due diligence and to inform post investment action plans. We’re

36 | Capital Finance International
CFI.coinvitedLindseyMcMurray,managingpartner andco-founderofPollenStreetCapital,tooutlineher company’smissionandmotivation...
"As a private capital manager, Pollen Street has access to meaningful private market data on current and prospective portfolio companies."
"ESG factors will shape the industry for years to come. As focus in this area grows, simple and consistent information is vital."

incorporating the scores into an ESG ratchet for credit investments.

We have been part of the inaugural year of the ESG Data Convergence Initiative. This is growing momentum to simplify the process of investor reporting by using standard definitions and templates, with access to benchmarkdriven insights into how our portfolio companies compare to their peers.

ESG factors will shape the industry for years to come. As focus in this area grows, simple and consistent information is vital. Investors will increasingly look for transparency in reporting and the “so what” of impact as they embed ESG considerations into their strategies. As employees, consumers, and communities raise their voices in support of ESG initiatives, companies that lead on these issues will achieve clear differentiation — and create a more sustainable world. i | Capital Finance International 37
Managing Partner and Co-founder: Lindsey McMurray

Davos Pioneer Schwab’s Beliefs Formed by War, Kissinger, and Deep Faith in Entrepreneurism

Johann Wolfgang von Goethe, the 18th Century German poet, playwright and statesman, once said: “Daring ideas are like chessmen moved forward. They may be beaten, but they may start a winning game.”

Klaus Schwab, the 84-year-old founder and executive chairman of the World Economic Forum (WEF) came up with a daring plan when he organised a business conference of 450 delegates in the Swiss ski resort of Davos in 1971 — and that idea has been playing a winning game ever since.

Today, the WEF’s annual event attracts thousands from around the world — including royalty, politicians, billionaire businesspeople, academics and the media — to exchange thoughts and ideas in the pristine Alpine air.

Perhaps inevitably, there are those who talk of “fat cats in the snow” and believe that Schwab is some kind of grand wizard of the world’s elite, orchestrating a sinister plan to control the planet. His supporters say he is trying to make the world a better place — and even his fiercest critics grudgingly admit that Klaus Schwab has a knack for understanding the zeitgeist.

Schwab is a product of his time. He was born in 1938 in Ravensburg, southern Germany, to Swiss parents, and was profoundly affected by World War II. In an interview, he described his schooldays in Ravensburg: “I lived through some bombardments. Most of the others in the school had lost parents.” After his mother was questioned by the Gestapo for “speaking in a Swiss accent”, the family moved back to neutral Switzerland, only returning to Ravensburg when the war was over.

The experience of growing up in the conflict awakened his sense of social responsibility, he says, and a desire “to avoid political and human catastrophe”.

The young Schwab studied mechanical engineering and economics in Zurich. He gained a doctorate in economics at the University of Fribourg before studying at Harvard. Going to America, he says, “opened up a new world”. At Harvard, Schwab managed to slip into a seminar given by Henry Kissinger, who later became US Secretary of State. “Henry let me in, I think, because I was German,” he said. “This led to a friendship which endured. It was participating in this seminar where I developed my interest in geopolitical affairs.”

Schwab returned to Germany with the conviction that the economic power of the US was threatening that of post-war Europe. He understood a key difference between the old and new worlds at the time. “In the US, if an entrepreneur fails, he tries again, and succeeds. He is a hero. In Europe, if you fail, you’re a failure.”

The notion of creating an economic forum in Davos was born from his belief that Europe needed to create an enabling environment for entrepreneurs. The WEF has grown beyond those initial aims. Schwab insists that those who come to Davos every year are not there to “learn how to make money”, but to improve the world.

Schwab is still married to Hilde, the woman he recruited to help him organise the first Davos meeting in 1971, and shows no sign of slowing down with age. He believes the world is going through epic transitions — economically, ecologically and politically — and that the actions taken today will affect future generations.

“We have to work together to meet all the challenges we have in the world,” he says. “I believe in human nature to overcome the challenges.”

When Schwab talks of the urgent need for action, he could be thinking of another saying of his fellow countryman, Goethe: “What is not started today is never finished tomorrow.” i

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Five, Six, Seven, Eight — then Seven Again: G7’s Tangled Past, and Future

hen the G7 formed in 1976, it represented over 66 percent of world GDP. In 2021, that fell to 44 percent — but the pendulum may swing back thanks to the economic rise of China and growing international estrangement from Russia.

The G7 is an annual meeting of the leaders of seven leading industrialised nations: the US, Canada, France, Germany, Italy, Japan, and the UK. It is an informal body, as it has neither charter nor secretariat. Its revolving presidency comes from member countries which take turns in hosting the summit and setting its agenda.

The G7 discusses governance and co-ordinated action on the global economy, security and energy. Given members’ share of world GDP and their influence on global institutions, the G7 can shape the direction of the world’s economy, as well as international frameworks. This is primarily achieved by building a consensus view that accords with global discourse. Leading democracies and international institutions are frequently invited to its summits.

The G7 last met in June this year at Schloss Elmau in Bavaria. The conflict in Ukraine, food security, Covid-19, and the Partnership for Global Infrastructure and Investment were key topics. G7 members have provided Ukraine with $2.8bn in humanitarian aid, and $29.5bn in budget assistance.

It has its origins in the early 1970s when the G5 — the US, France, Germany, Japan, and the UK — met to address the collapse of the US gold standard, the 1973-75 recession, and OPEC oil shocks. In the depths of the Cold War, and with memories of the 1968 protests still fresh, the five nations feared political instability — and growing Soviet influence.

The G6 was formed in 1975, when the-then French president Valéry Giscard d’Estaing and (West) German chancellor Helmut Schmidt invited the existing members, plus Italy, to Chateau de Rambouillet outside Paris. It was decided to make the G6 an annual summit, and Canada joined in 1976 to make up the G7.

With the collapse of the Soviet Union in 1991 and the establishment of a Russian democracy, Russian president Boris Yeltsin met with each

of the G7 leaders following the 1994 Summit. In 1998, Russia was added to the group, briefly creating the G8 — but it was suspended after it annexed Crimea, and has not been invited back.

Since 1998, a summit at ministerial level has been added to help with the G7’s growing agenda. The following year, the G20 was created, with G7 ministers meeting with the ministers of 12 emerging countries and the EU. A G20 leader’s summit began in 2008. The G7 recognised the growing influence of emerging economies, particularly China, and saw it would need help in forming a global consensus.

Since the early 2000s, China’s influence has grown with the Belt and Road Initiative. Its share of GDP has risen — while the G7’s has fallen.

During the 2007-09 Global Financial Crisis, the G20 emerged as the more important body, co-

ordinating the international response. It seemed that as the influence of China and the G20 grew, that of the G7 would wane.

That was seemingly underlined in 2018, when former US president Donald Trump withdrew his agreement from the G7’s summit communique — and the remaining countries were left with no time to salvage it. Many commentators proclaimed the death of the G7.

But Trump’s trade war with China ironically infused the G7 with importance. With China and the West increasingly at odds, economically and politically, and the election of president Joe Biden, the G7 has become the core consensusbuilder for global policy — and a counterweight to competing influences. This has been furthered by increased tension with Russia.

Members are the US, UK, Canada, France, Germany, Italy, and Japan. i

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Is the G7 still relevant? Some say it’s a Cold War relic that lacks the influenceitoncehad…
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The Rise and Fall of Globalisation — and the G20’s Role in World Trade

Globalisation was full of promise — until the 1997 Asian Financial Crisis and the 1998 Russian debt crisis.

There were concerns that openness to trade created channels for financial and economic conta-gion — and fears for the equity of globalisation, punctuated by the Seattle WTO protests in 1999. As the G7 grappled with these issues, the G20 emerged.

Now it, too, is facing its challenges.

The G7 was formed in 1976 to ensure stability after the economic crises of the 1970s — and to op-pose Soviet influence. But with the collapse of the Soviet Union in 1991 and the creation of the WTO in 1994, the focus of the G7 changed. Several countries, China among them, were growing in economic influence.

In September 1999, G7 finance ministers and central bank governors presented the G20 as “a more inclusive and representative forum” to focus on international financial affairs that could translate the “benefits of globalisation into higher incomes and better opportunities for people every-where”.

Membership was to include countries “whose size or strategic importance gives them a particularly crucial role in the global economy”. The G20’s inaugural meeting was held in Berlin in December 1999.

It consists of the G7 countries, plus 12 emerging nations and the EU. International bodies — includ-ing the Financial Stability Board, the ILO, IMF, OECD, UN, World Bank and the WTO — provide regu-lar input.

The G20 countries represent around 65 percent of the world's population, 79 percent of global trade, and at least 85 percent of the world economy. Initially it was an annual meeting of finance ministers and central bank governors (the financial channel). In 2008, a leader’s summit was added. Typically, governments appoint key public servants, dubbed “Sherpas”, to work on agenda outside those of the finance channel.

Like the G7, there is no secretariat or charter. Instead, there is a revolving presidency between re-gional groups. Host country organise each summit and set the agenda. At the end of each

summit, a communique expresses member consensus. This, along with the actions of the G20 members, shapes global policies and institutions.

The G20’s initial focus was reducing vulnerabilities to financial crisis through bestpractice regula-tion and supervision. There was also a commitment to spread the benefits of globalisation through support of the WTO, and the IMF and World Bank HIPC (Heavily Indebted Poor Countries) initia-tive.

After 9/11, the G20 looked at measures to thwart terrorist funding. Perhaps its finest hour was in the response to the 2007-09 Global Financial Crisis. In 2009, it collectively agreed to stimuli worth $5tn. It also agreed to support increased capacity for the IMF, and provided input to financial regu-latory and prudential standards developed under Basel III agreements on banking supervision. The deadline for Basel III was extended because of the financial crisis.

Other highlights include the 2016 summit in Hangzhou, where China and the US formally an-nounced their countries’ accession to the Paris Agreement on climate change. The 2021


Many have been disappointed with the G20’s failure to prevent a trade war between the US and China — and its lack of a co-ordinated response in the face of the pandemic.

The conflict in Ukraine is now posing a problem for the G20, given Russia’s membership. At the G20 meeting of finance ministers in Indonesia in 2022, there was no consensus, and no joint commu-nique was issued.

While the actions of the G20 may be curtailed because of the tensions between China, Russia, and other members, all these countries have a forum outside the UN to discuss key economic and po-litical issues.

Members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US, and the European Union. i

Winter 2022-2023 Issue | Capital Finance International 41 >
in Rome saw a commitment to a fairer international taxation system, including the introduction of a 15 percent global minimum corporate tax by 2023.
InternationalbodyformedfromtheG7isfacingfreshchallenges,reports BrendanFilipovski.

The Road to Fascism

Economics has been called the dismal science, and 2023 will vindicate that moniker. We are at the mercy of two cataclysms that are simply beyond our control. The first is the COVID-19 pandemic, which continues to threaten us with new, more deadly, contagious, or vaccineresistant variants. The pandemic has been managed especially poorly by China, owing

mainly to its failure to inoculate its citizens with more effective (Western-made) mRNA vaccines.

The second cataclysm is Russia’s war of aggression in Ukraine. The conflict shows no end in sight, and could escalate or produce even greater spillover effects. Either way, more disturbances to energy and food prices are all

but assured. And, as if these problems weren’t vexing enough, there is ample reason to worry that the response from policymakers will make a bad situation worse.

Most importantly, the US Federal Reserve may raise interest rates too far and too fast. Today’s inflation is largely driven by supply shortages, some of which are already in the process of

42 | Capital Finance International
Joseph E Stiglitz:
T > ©ProjectSyndicate2022

being resolved. Raising interest rates therefore might be counterproductive. It will not produce more food, oil, or gas, but it will make it more difficult to mobilise investments that would help alleviate the supply shortages.

Monetary tightening also could lead to a global slowdown. In fact, that outcome is highly anticipated, and some commentators, having

convinced themselves that combating inflation requires economic pain, have been effectively cheering on the recession. The quicker and deeper, the better, they argue. They seem not to have considered that the cure may be worse than the disease.

The global tremors from the Fed’s tightening could already be felt heading into winter. The United States is engaged in a twenty-firstcentury beggar-thy-neighbor policy. While a stronger dollar tempers inflation in the US, it does so by weakening other currencies and increasing inflation elsewhere. To mitigate these foreign-exchange effects, even countries with weak economies are being forced to raise interest rates, which is weakening their economies further. Higher interest rates, depreciated currencies, and a global slowdown have already pushed dozens of countries to the edge of default.

Higher interest rates and energy prices will also push many firms toward bankruptcy, too. There have already been some dramatic examples of this, as with the now-nationalised German utility Uniper. And even if companies don’t seek bankruptcy protection, both firms and households will feel the stress of tighter financial and credit conditions. Not surprisingly, 14 years of ultra-low interest rates have left many countries, firms, and households overindebted.

The past year’s massive changes in interest rates and exchange rates imply multiple hidden risks – as demonstrated by the near-collapse of British pension funds in late September and early October. Mismatches of maturities and exchange rates are a hallmark of underregulated economies, and they have become even more prevalent with the growth of nontransparent derivatives.

These economic travails will, of course, fall hardest on the most vulnerable countries, providing even more fertile ground for populist demagogues to sow the seeds of resentment and discontent. There was a global sigh of relief when Luiz Inácio Lula da Silva defeated Jair Bolsonaro in Brazil’s presidential election. But let us not forget that Bolsonaro got almost 50% of the votes and still controls Brazil’s Congress.

Across every dimension, including the economy, the greatest threat to well-being today is political. Over half the world’s population lives under authoritarian regimes. Even in the US, one of the two major parties has become a personality cult that increasingly rejects democracy and continues to lie about the outcome of the 2020 election. Its modus operandi is to attack the press, science, and institutions of higher learning, while pumping

as much mis- and disinformation into the culture as it can.

The aim, apparently, is to roll back much of the progress of the past 250 years. Gone is the optimism that prevailed at the end of the Cold War, when Francis Fukuyama could herald “the end of history,” by which he meant the disappearance of any serious challenger to the liberal-democratic model.

To be sure, there is still a positive agenda that could forestall a descent into atavism and despair. But in many countries, political polarisation and gridlock have pushed such an agenda out of reach. With better-functioning political systems, we could have moved much faster to increase production and supply, mitigating the inflationary pressures our economies now confront. After a half-century of telling farmers not to produce as much as they could, both Europe and the US could have told them to produce more. The US could have provided childcare – so that more women could enter the labor force, alleviating the alleged labor shortages – and Europe could have moved more quickly to reform its energy markets and prevent a spike in electricity prices.

Countries around the world could have levied windfall-profit taxes in ways that might actually have encouraged investment and tempered prices, using the proceeds to protect the vulnerable and to make public investments in economic resilience. As an international community, we could have adopted the COVID-19 intellectual-property waiver, thereby reducing the magnitude of vaccine apartheid and the resentment that it fuels, as well as mitigating the risk of dangerous new mutations.

All told, an optimist would say that our glass is about one-eighth full. A select few countries have made some progress on this agenda, and for that we should be grateful. But almost 80 years after Friedrich von Hayek wrote The Road to Serfdom, we are still living with the legacy of the extremist policies that he and Milton Friedman pushed into the mainstream. Those ideas have put us on a truly dangerous course: the road to a twenty-first-century version of fascism. i


Joseph E Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is a member of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

Winter 2022-2023 Issue | Capital Finance International 43

say Tech Innovators. But Silicon Valley Should Not Rest On Its Laurels

If California, the Golden State, were a sovereign nation, its economy would rank fifth in the world.

It isn’t the biggest state, but it is the most populous — and it reported a gross state product (GSP) of $3.4tn last year, and nearly 15 percent of national GDP.

Hollywood and Silicon Valley are the driving factors for the state’s global fame and wealth. Some of the world’s most valuable tech companies are headquartered in Silicon Valley, including Apple, Google, HP, Intel and Adobe. The tech sector accounts for nearly a fifth of the economic value produced in California — around $520bn in annual economic impact — and represents more than a quarter of all US tech output.

The tech hotspot, located in the south San Francisco bay area of California, is named after the main material in computer microprocessors: silicon. It has long been recognised as the global centre of tech innovation, but Sean Randolph, the senior director at the Bay Area Council Economic Institute, worries the region could lose its

vaunted status if troubling trends aren’t addressed quickly.

He starts with the relationship between the state’s universities and its tech ecosystem. According to Randolph, the University of California (UC) system ranks as the top research institution in the world for US patent generation. The university reaffirmed its bragging rights in 2021, with 650 US patents and 920 international patents granted last year. That same year, UC intellectual property brought in $136m in gross revenue, $37m of which was paid out in inventor shares and $13m in campus research shares.

Randolph worries over the fact that public investment in the university has fallen by nearly half over the past 22 years. Meanwhile, EdSource reports that nearly two-thirds of California high schools lack computer science courses. It warns that the state is neglecting to prepare students to enter California’s tech industry while also neglecting to train and equip future tech teachers. Randolph believes increasingly tight immigrant policies will leave the state with even more of a deficit of tech talent.

“High-skilled immigrants face systemic visa and green card barriers, limiting access to the world’s most creative minds,” he wrote in an op-ed for CalMatters. “This matters because nearly half of tech companies in Silicon Valley are founded by immigrants. Companies such as Google, Tesla, Stripe and Uber, all with immigrant entrepreneur founders, support tens of thousands of jobs.”

Combine those factors with growing qualityof-life concerns, and the situation becomes more dire. Droughts and wildfires are increasingly threatening property, lives and livelihoods. California also has some of the highest property prices in the US. A typical home in California costs over $800,000 — nearly double the US median. In the Bay Area, the disparity widens further, with homes there averaging $1.4m. California boasts a median income that’s 15 percent higher than the national median, but the exorbitant prices put the dream of home ownership out of reach for many residents.

Read on to learn about three (native and expat) tech female founders who have made California their home. i

Winter 2022-2023 Special



A Trailblazer for Canine Cancer Care

Cancer kills some 10 million people each year, accounting for one in six deaths worldwide. Man’s best friend isn’t faring any better. Cancer causes one in four canine deaths, and kills about half of all dogs over the age of 10.

Christina Lopes, the CEO and co-founder of The One Health Company, says that dogs have been helping in human drug trials for decades. They’ve been the research subjects, but until now, never the beneficiaries.

“Cancer care for dogs has not changed much in the last 30 years,” Lopes explains. “Dogs are still treated with the same chemotherapies as they were in the 20th Century, but we have seen human cancer care advance tremendously … Using the same advanced cancer diagnostics and precision medicine that are currently on the market and approved by the FDA for people, we are bringing cancer care for dogs. And when we open access to precision cancer treatments for our furry friends, we build data that helps advance human oncology research and treatment.”


Many people regard their pets as family members — and they’ll pay whatever it takes to save their lives. The pet cancer therapeutics market, which was estimated at $364m in 2021, is expected to reach $589m over the next five years, registering a CAGR of 8.89 percent from 2022 to 2027. Two-thirds of US households have at least one pet, and the country tops the global ranking of pet-care spending per person. According to the American Pet Products Association, total pet healthcare expenditure for 2019 was estimated at $75.38bn, up nearly $3bn over the previous year.

FidoCure is less expensive than traditional canine chemo treatment, which can cost upwards of $10,000. Pet “parents” (as One Health calls them) can expect a price tag in the low four figures for genetic testing and targeted treatment plans. “We come from the scientific principle that every cancer is unique,” said Lopes. “So, while some therapies might work for some populations, I don’t know of any that work for all, really. Any. In any species.”

The Veterinary Cancer Society estimates a dose of traditional canine chemotherapy to cost $150 to $600. A traditional radiation protocol runs from $1,000 and $6,000. Lopes told Scientific American that she’s heard of people spending $30,000. Some dipped into their kid’s college funds; others went into debt.

One Health Company charges a flat perpatient fee for DNA testing, and its partner veterinarians set the final price for the client.

Lopes said the company was exploring new payment models, allowing dog owners access to DNA-targeted, vet-approved therapies at a fixed cost for the life of the pet. The company is already working with some 200 veterinarians in 32 states, and FidoCure has a rapidly expanding pawprint. It’s also covered by most pet insurance.


One Health provides veterinarians with a detailed report of recommended treatments. The company works with vet clinics and pharmaceutical companies to deliver the medicines to dog owners.

“Technology is a core tenet of any business, and gives you the bandwidth to scale your business, support your staff, collect information and service your customers and partners,” Lopes insists. “FidoCure’s informatics system is fully integrated with our veterinary, pharmacy and clinical laboratory partners to streamline operations.”


Lopes was born in Brazil but spent her formative years in the US and Ireland. Before she launched One Health with her co-founder and husband, vet Ben Lewis, she was the managing director of Cerberus Capital, a US private equity firm with $30bn under management. She has served as the advisory board director for International Planned Parenthood and as an advisor to the UN Commission on women’s issues.

Lopes was recognised as a young global leader by the World Economic Forum in 2010. She says it was a pivotal moment in her career, connecting her to a powerful community of investors and innovators.

“The Davos community was really rallying behind our mission to bring better health for all — twolegged and four-legged friends alike. Everyone seems to be touched by cancer somehow and supports the move towards effective and gentler therapies which we are enabling.”

One Health Company was founded in Philadelphia in 2016 because of the city’s robust medical research community.

“Penn Med (University of Pennsylvania Health System) has really amazing advancements there,” she said, citing studies on viruses and the immune system. Lopes found support among the academics, who helped her leverage their findings to benefit pets.

When the company was selected to pitch at Wharton’s Venture Initiation Programme, the

co-founders were new parents. The couple showed up with a baby in tow, and Lopes finished her pitch with a fussing infant in a sling at her side. By 2017, the company had moved to Palo Alto, California, and begun to commercialise canine cancer therapies. A collaboration with global pharma company Eisai served as the inspiration for FidoCure, the company’s flagship product.

“Eisai has an FDA-approved breast cancer therapy that is based on sea sponges found in northern Japan. They wanted to see if this therapy could also help dogs with a type of

46 | Capital Finance International

sarcoma that is considered very similar to human angiosarcoma. We collaborated with Eisai, and enrolled pet dog patients with metastatic cancer and presented results of the therapy in combating canine cancer at AACR, a prestigious cancer conference.

“The pet parents were so grateful for more treatment options, and top veterinary oncologists shared that we were helping service an urgent need for more diverse tools to effectively treat canine cancer. Eisai’s therapy is now helping humans with angiosarcoma, and is in clinical trial at Mass General.

“What is particularly touching about this story is how so many different facets of our planet — the ocean, dogs, humans — all came together to produce cutting edge treatment,” Lopes said. “This serves as a constant reminder of the preciousness of our natural resources and the value of all life on earth.”

According to Crunchbase, FidoCure has raised $15m in funding. Andreessen Horowitz led a $5m seed round in 2019 and Polaris Partners led a $10m series-A round in 2020. It’s funded by 13 investors, Global Brain Corporation and Bossanova Investimentos being the most recent to join.

Lopes acknowledges that the pandemic has limited in-person networking opportunities, but she encourages aspiring entrepreneurs to connect with peers and mentors through online groups and local meet-ups. As a mother in Menlo Park, Lopes is surrounded by other businesssavvy parents.

“It made life kind of interesting, because I could go to a kid’s birthday party and solve very pressing business questions,” she shared. “That’s one of the benefits of living in San Francisco or Palo Alto. This is just how stuff works there — and I absolutely love it.” | Capital Finance International 47


I, Robot (Ninja): A Pioneer of the Autonomous Space

Robotsareheretostay,makinglifeeasierinmany sectors — and Fetch Robotics founder Melonee Wise has been there from the start…

Melonee Wise is a self-proclaimed “robot ninja”, and the nickname has caught on. Wise is a rock star in the robotics community.

She was head-hunted by Willow Garage, a now-defunct research-lab that Business Insider credits with jump-starting the race in computer vision, manipulation and autonomy. It spawned a range of applications for drones, autonomous cars and warehouse operations. Many members of the Willow Garage team went on to launch their own businesses after its billionaire “moonshot” founder, Scott Hassan, decided to close operations.


Wise became a serial entrepreneur. Within a year of Willow Garage’s shutdown, in late 2013, she launched Unbounded Robotics. By July of the following year, it had folded. Wise said complications in an agreement with Willow Garage stifled fundraising. Undaunted, she cofounded a pioneer of on-demand automation, Fetch Robotics. It presented the world with the first cloud robotics platform and contributed to robot operating systems still used today.

Wise has led with a focus on innovation and partnership. Over the past eight years, the company has developed a compelling cloud robotics platform. Robots have long been a mainstay in warehouse and fulfilment centres, and the pandemic proved the worth of the technologies. Fetch contributed robot “troops” for the fight against Covid: one innovation had a disinfecting spray, another featured UV light technology.

“Even before the pandemic became an issue, warehouses and distribution centres found it difficult to find human labour,” she said. “Now, some of these facilities are faced with the additional challenges of doing more with even fewer workers.”

Fetch Robotics has raised $94m in five funding rounds over five years. A 2019 series-C round led by Fort Ross Ventures netted $46m. It attracted four new investors — CEAS Investments, Redwood Technologies, TransLink Capital and Zebra Ventures — and retained four existing ones: O’Reilly AlphaTech Ventures, Shasta Ventures, Softbank Capital, and Sway Ventures.


When Fetch started series-D fund-raising in 2021, it was offered a $305m acquisition deal by Zebra Technologies, a company building and delivering edge products that enable businesses to connect assets, data and people.

“We started working together through our partnership,” said Wise. “One of the first things we did was integrate their mobile computing devices for an out-of-the-box experience on our cloud robotics platform. Our customers … could take the hand scanner they already had, scan a barcode, and call a robot to them.”

Wise serves as the vice-president of Zebra’s robotics automation division, and Fetch will become the centrepiece of its new product offerings. “One of the other great things about Fetch joining Zebra is they have a strong go-tomarket engine, and they can amplify our sales capability… It helps us reach a much broader, wider, and deeper audience.

“I think the acquisition made sense, because it aligns with our long-term vision. When we built our platform, we built it to be unifying. Not just our robots. Over the years we’ve been slowly bringing in other partners.

“We have a partnership with SICK, we have partnerships with other marketplace web service providers like VARGO. That isn’t going to change. We’re still going to be partner-friendly, and we’re still going to bring other devices into the ecosystem.”


A study commissioned by Zebra Technologies found that 83 percent of warehouse associates believe autonomous mobile robots (AMRs) have increased productivity and saved time. Threequarters report error reduction, while nearly two-thirds credit AMRs with providing careeradvancement opportunities. Wise hails this as a

win-win for the business, front-line teams, and customers.

“Robots are finding their place alongside people in many work environments, including factories, warehouses, retail stores and even hospitals,” Wise wrote in Robotics Business Review. “To optimise their effectiveness, increase human-robot

48 | Capital Finance International
"Wise is a rock star in the robotics community."
"Robots are finding their place alongside people in many work environments, including factories, warehouses, retail stores and even hospitals."

collaboration, and reduce the risk of mishaps, AMRs must understand and take cues from the social behaviour of their human co-workers. Cloudbased technologies for deep learning training are key to making that happen.”


Wise has had her work published in various industry

journals, and she has been granted 18 patents. She was one of six robotics pioneers (and the only woman) to win an Engelberger award in 2022. It’s been compared to “a Nobel Prize of robotics”.

In June, she was elected to serve on the board of directors of Tailos, a company providing automated solutions for hospitality and industrial

cleaning. It lets machines do the dull, dirty or dangerous tasks.

Tailos CEO Micah Green describes Melonee Wise as a “visionary and titan in robotics” with an “unparalleled passion for building robotics companies and supporting fellow roboticists on their journeys”. | Capital Finance International 49


Tackling Disaster with Data — and First-hand Experience

California-based One Concern lets tech do the thinking and take the fear out of preparation for disasters and extreme weather events.

Extreme weather events are wreaking global havoc. The US suffered nine billion-dollar weather and climate disasters in the first half of this year. Drought and record heatwaves have sparked wildfires across Europe, Asia and the Americas. Flooding has become a recurring nightmare for many communities.

Climate-charged catastrophes in 2021 caused an estimated $343bn in economic losses — more than half of which were uninsured — but one company is harnessing data science and machine learning to mitigate, and prepare for, the damage.

One Concern’s team is unified behind the need to solve real-world problems. Its CEO and CTO, both born in India, bonded as young immigrants in the start-up scene. The company, based in Menlo Park, California, was founded in 2015 by three Stanford alumni: two structural and earthquake engineering graduates, CEO Ahmad Wani and board observer Timothy Frank, and computer scientist Nicole Hu, the company CTO.


One Concern creates “digital twins” of cities, communities, and infrastructure systems to build climate resistance. The company combines AI, machine learning and trillions of curated data points to create interactive simulations to help communities and industries stay ahead of climate risks. The model maps out potential hazards, including earthquakes, floods, and windstorms, then analyses vulnerability factors to predict direct and indirect impacts.

“With digital twins, we’re able to measure resilience using data,” she says. “Armed with better data and AI, we can run thousands of … simulations before a natural disaster to identify vulnerable communities and critical infrastructure in harm’s way. Our machine learning systems also ‘fill the gaps’ within the data to account for the ongoing effects of climate change, allowing us to improve our predictive analytics and see into the future with greater confidence.”



First-hand experience prompted the trio to turn a machine-learning class project into a purposeled start-up. Indian-born Wani was visiting his home in Kashmir when the 2014 floods hit, stranding him and his family for seven days without food or water. Shortly after his return

to the US, he experienced another shock as a severe earthquake shook South Napa, California. Chief resilience officer Craig Fugate once led emergency management forces at the federal and state level.

The founders credit their Stanford professors with pushing them to pitch their ideas to investors. Wani says the first batch of municipal emergency managers and venture capitalists thought the algorithm was “magic” — and seven years of continuous investment in tech and data mastery followed.


“Resilience to climate threats — a framework where organisations, communities and private and public sector actors understand, forecast and mitigate climate risk — is among our most critical global priorities,” Hu says. “It demands an entirely new approach to understanding and acting on climate risk, one that mitigates climate threats and their ripple effects on businesses and communities, rather than scrambles to react after the damage has been done.”

The One Concern platform is underpinned by three pillars. One Concern DNA compiles curated resilience data for precision riskmitigation. One Concern Domino provides enterprises with advanced resilience analysis and visualisation tools. One Concern Ready Fast focuses on improving the decision-making process for disaster preparation and response.

“We help cities understand that by running multiple scenarios [for disaster] events, they can figure out which places have the highest level of risk,” Hu said. “We also try to show that if you add certain mitigation strategies, you can reduce your risk and your cost of responding to disasters.”

The company is developing a climate resilience scoring system that it hopes will become an industry standard. It works with clients across the financial services, real estate and insurance sectors to increase accuracy in risk pricing and selection, valuation, and mitigation investment.

“One Concern provides clients a first-mover advantage as asset valuations begin to reflect differentiated resilience,” said chief strategy officer Jeffrey Bohn, suggesting that “market participants who incorporate new analytics to capture a differentiating valuation driver — before the driver is widely reflected in market prices — can potentially find positive alpha strategies”.


“For a mission-driven company, company culture is pretty important,” Hu said. “Once you are able to get the right team, all these other problems surrounding prioritisation work themselves out because you have key players helping to solve those issues. I wouldn’t say I have all the answers; my team has all the answers.”


Since its launch, One Concern has raised $119.2m in funding. The latest infusion of $45m, in June 2021, came from the holding company of one of Japan’s largest insurers, SOMPO. The investment is part of a multi-year $100m deal easing the company’s expansion into the Japanese market.

One Concern was recognised as a WEF technology pioneer in 2019 and has been selected to participate in an ESG-impact programme organised by Taronga Ventures.

Hu has been listed among Inc. Magazine’s top 100 female founders and Forbes’ top 30 under 30 innovators.

50 | Capital Finance International
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Faces the Future

with History in Hand, and Finance and Fintech as Tools for Resurgence

Germancitywithalongfinancialhistoryhasconsistentlyforcedits waytoprominence.


rom the dissolution of the Holy Roman Empire, through the birth of the eurozone to the enduring drama of Brexit, Frankfurt has always found its way to the financial fore.

The city ranks 18th in the Global Financial Centres Index. In Europe, it trails London (second) and Paris (10th). Its stock exchange, Deutsche Börse AG, represents about a third of the market capitalisation of Euronext and is over half the size of the London Stock Exchange.

Its importance is primarily derived from the burgeoning financial sector and the enduring strength of the German economy. There are 202 banks in the city — 162 of them from other countries — including three of the world’s top 100 financial institutions: Deutsche Bank, DZ Bank, and Commerzbank. Frankfurt hosts the European Central Bank (ECB), and is home to Eurex, Europe’s leading derivatives exchange.

According to Henley Passport Index, this is the world’s 13th-wealthiest city, with 117,400 HNWIs — 14 of them billionaires. It has benefitted at London’s expense, issuing 60 licenses to Brexit-affected banks and witnessing a €675bn boom in assets and the appearance of 4,000 finance jobs since 2021.

Frankfurt was important to the Carolingian and Holy Roman Empires; the latter declared it an Imperial Free City in 1372. It sat at a trade crossroads, linking Paris with the east, and northern cities with the German and Swiss centres in the south. It was a natural venue for trade fairs, which have been held there since 1150. Today, Frankfurt’s Book Fair and Auto Show are world-renowned events.

In 1585, local merchants at the trade fairs began to set exchange rates. An official price list for currencies appeared in 1625, and in 1682 a stock exchange was formed to facilitate foreign exchange; it’s one of the oldest in the world.

Frankfurt has long found itself in competition with financial centres: Amsterdam, Brussels, Paris and Berlin. In the 16th Century, it became a haven for French and Dutch merchants fleeing religious persecution. Their contacts and expertise boosted the banking sector. Then, in the 18th Century, it benefitted from the decline of the Dutch Empire as Amsterdam’s status as a financial centre slipped. Frankfurt began to specialise in securities and loans to princes, states, and cities.

This period of its history is best represented by one of its most famous financial families. Mayer Amshel Rothschild was born in Frankfurt in 1744, and after starting out as a rare coin dealer he founded the famous banking dynasty. Rothschilds and Sons became a key lender during the French Revolutionary and Napoleonic wars.

When Prussia won the Austro-Prussian war of 1866, it strengthened its regional position and denied Frankfurt Austrian protection. Prussia shifted much of the banking business to Berlin, which became dominant when the German Empire was established in 1871.

That dominance lasted until the end of World War II. The Allies forced the breakup of major financial institutions in Berlin into smaller regional banks. Geographic isolation limited West Berlin’s prominence as a financial hub.

Frankfurt began to emerge from the shadows. It was the initial seat of American administration in West Germany — and its airport made it a natural gateway for US companies and banks. The forerunner to the Bundesbank was formed in Frankfurt in 1948. Soon many German banks — including Deutsche Bank — consolidated and settled on the city as their headquarters.

The Frankfurt Stock Exchange re-opened in 1948 and played a part in providing capital for post-war reconstruction. It was the leading stock exchange in Germany. In 1988, it introduced the DAX index. In 1993, it became the Deutsche Börse AG. It is the 16th- largest stock exchange by market capitalisation.

Frankfurt’s importance has been boosted as host of the ECB. The initial path to European monetary union was laid by the Committee of Governors, who began meeting at the Bank of International Settlements in Basel in 1964. In 1992, the Treaty of Maastricht set the established the European Monetary Institute (EMI) to oversee the monetary union process. Frankfurt was chosen because of the presence of the Bundesbank, its position as a financial centre, and the strength of the Germany economy. In 1998, the ECB replaced the EMI, with Frankfurt again chosen as headquarters.

Over the past 60 years, its biggest rivals have been London and Paris — but it gained some ground on London because of the ECB and Brexit. Paris has secured its position for equities with the merger of Paris Bourse, the Amsterdam Stock Exchange and the Brussels Stock exchange to form Euronext in 2000.

Frankfurt may not have the avant-garde reputation of Berlin or Paris, but it is modern and cosmopolitan city. The Economist Intelligence Unit (2022) and Mercer (2019) both rank it seventh in the world for liveability. It’s not all tarmac and concrete. The 48-square-kilometre Frankfurt City Forest, with over 450km of paths, is just 15 minutes’ drive from the city centre. The city is home to the Stadel Museum, which boasts an extensive collection of works from the Old Masters to modern leading lights. Frankfurt may be quiet compared to Berlin, but it is adored by families. In global terms, it is relatively inexpensive: 62nd on Mercer’s cost-of-living index, well below London, Vienna and Zurich.

The old city was destroyed during the World War II, and the result is a uniquely modern skyline. There is practicality as well as history and financial clout, with an efficient transport service and the Frankfurt airport, among the largest in Europe. Frankfurt’s notable features include the world-class Johann Wolfgang Goethe University, the Frankfurt School of Finance and Management, and the Max Planck Institutes for Biophysics. With 160,000 students — 22,000 of them internationals — the banking sector has a huge pool in which to hunt talent.

Frankfurt now enjoys greater patronage than when it was the coronation site for the Holy Roman Emperor. Hosting the ECB and being acknowledged as the main German financial centre gives it an enviable edge over its rivals. Looking ahead, it’s likely to pursue investment in fintech to continue that lead. i

54 | Capital Finance International
"Frankfurt began to emerge from the shadows. It was the initial seat of American administration in West Germany — and its airport made it a natural gateway for US companies and banks. The forerunner to the Bundesbank was formed in Frankfurt in 1948. Soon many German banks — including Deutsche Bank — consolidated and settled on the city as their headquarters."

BBE Chief Uses Life Experience to Guide His Hand in Finance

It’s his most recent contributions to the banking industry; he was appointed to the role in 2020. Van der Kwast’s own journey of transformation and change crossed with that of BBE. He has lived and worked in Asia, the US, the Middle East, and Europe; this has given him the ability to accept challenges and change without fear.

He enjoys the complexity of new environments and thrives in the pursuit of opportunity, expansion, and new solutions. His achievement has been reaching peak efficiency, creating a better, digital bank, without losing the allimportant personal link to clients and staff.

Van der Kwast describes himself as "a banker in principle, but an entrepreneur in practise".

And, like a true entrepreneur, he has mastered various subjects, from multitasking in a managerial role to successfully launching a start-up. He uses his accumulated knowledge in fields of business, IT, treasury, compliance, corporate, FI, and sales to lead his team. He cherishes dialogue and loves to learn from anyone: IT technicians, designers, compliance officers, risk analysts.

The chief executive remembers to always observe, listen, and avoid jumping to conclusions. In his business and managerial roles, Van der Kwast combines client engagement with product and service experience. His talent is for staying practical and pragmatic while delivering client needs. This makes him capable of giving honest advice and abstaining from a potentially

profitable transaction to avoid a corporate execution risk. His advice has been appreciated by clients who recognise its worth, even though they had the opportunity to go to any other bank.

BBE cherishes relationships based on trust, loyalty, service, and excellence. It has used its longstanding skill at creating meaningful connections in its new strategy, and added digitalisation to a classic banking process to improve efficiency, simplicity, and practicality.

The CEO asks his staff to use that approach in all business endeavours. “After all, this is what private and corporate banking is about,” he says. “Learn to listen and engage with your client. That is something that can’t be digitally replaced.” i

Winter 2022-2023 Issue | Capital Finance International 55 >
Victor van der Kwast’s long career could be seen as leading to this place, this time, and this role: chief executive Byblos Bank Europe. CEO: Victor van der Kwast

> The Fine Art of Listening Has Not Been Forgotten at this Niche Bank

Digital advances have made global networking a reality, and Byblos Bank Europe (BBE) has embraced the advantages and possibilities of that — without losing the human touch.

The go-ahead financial institution is following the fintech path, going digital and cloud-based, while retaining its people-centric focus and nurturing personal business relationships.

“We don’t seek to be everything to all people,” says CEO Victor van der Kwast. “We remain a true niche bank. Listening to our clients is what we do best. Digital availability has brought huge advantages, but we’re always available to discuss and address our clients’ needs face-to-face.” That personal touch can make all the difference.

During the pandemic, BBE faced the recurring challenge of remaining accessible to its clients, while finding new ways to serve them. For the Byblos Bank Group, facing and overcoming challenge is nothing new. In the midst of the two-year Lebanese crisis (1975-1977), the group’ opted for a versatile strategy to thrive, and expand its footprint outside in Europe.

The first step in the creation of BBE was the establishment of the Brussels office in 1976. This presence in the European market, and the rapid success of the new office, allowed the group to profit from the opportunities that lay at the heart of crises. This was the spark for further expansion in Paris (1980) and London (1981), with the aim of maintaining proximity with the spreading Lebanese diaspora in those capital cities, and gaining ready access to the international financial market.

Booming business over the following 15 years gave shape to the management and structure of the Byblos expansion. In 1998, the Brussels subsidiary annexed the offices in London and Paris as its branches — and became the headquarters of Byblos Bank Europe.

Swimming against the tide is strenuous — but rewarding. Challenge, approached correctly, means opportunity — and recent years, seen


thus, have presented plenty of both. The global financial crisis and the pandemic of 2020 left the world’s businesses with the irreversible mark of change.

Digitalisation allows BBE to remain accessible, as various processes and workflows were automated to accommodate the remote-working trend.

The shift to working via tech such as Teams, Zoom, and Webex, and signing documents electronically, heralded the emergence of a global trend that has become standard practice for many. BBE took the possibility to differentiate itself from the crowd.

The bank decided to strategically embrace digitalisation, but retain the vital human and personal aspects of its business. It was a daring move, and one that has paid off very well in the post-pandemic era, says Van der Kwast. “Being a niche bank, efficiency in business relationship management and easy access to the bank played an obvious part in this decision,” he says. “Clients who were overwhelmed with online ‘shopping carts’ and automated messages appreciated the personal touch of the BBE team.” Staff were still accessible by phone, via video links, and in person, on-premises. "We are so proud of this," the chief executive says.

BBE, as a niche bank, needs to keep a focus on selective markets and businesses; it is, as Van der Kwast said, "not a bank for everyone, everywhere". But as a fully capitalised bank in Europe, with licences to operate in Belgium, France, and the UK, it provides an awful lot. Its services include commercial banking, covering financial institutions, trade finance, and treasury. BBE deals with emerging markets and provides

Van der Kwast said, 'not a bank for everyone, everywhere'."

services to clients in the European Union, as well as those selected countries across Africa, Asia, and the Middle East.

The increasing requirements for compliance and transaction scrutiny, especially in Europe, have driven some large international banks to derisk these markets. And that has allowed BBE

56 | Capital Finance International
Byblos Bank Europe keeps ears, eyes, and options opentofocusontheopportunitythatliesinchallenge.
"The go-ahead financial institution is following the fintech path, going digital and cloud-based, while retaining its people-centric focus and nurturing personal business relationships."
as a niche bank, needs to keep a focus on selective markets and businesses; it is, as
Byblos Bank Europe

to capture some of them, in line with its core business and experience in emerging markets.

Diversity is not a cliché, but something to be cherished, believes Van der Kwast. BBE has implemented this principle throughout its business lines, and considers investments in human capital as a strategic advantage. “At

BBE, we have employees from 24 nationalities. That has created a vibrant working environment where everyone learns from the various cultures and languages, connecting with our clients and strengthening relationships and trust."


Change is inevitable and the future is more

exciting for those willing to embrace it. BBE keeps its entrepreneurial mentality active in its offices in Brussels, London, and Paris. The bank has consistently welcomed the future for 45 years, with versatility, by building on its core values, by remaining authentic, retaining the personal touch, earning loyalty, trust, and quality. i | Capital Finance International 57

> Sitting Pretty in the Goldilocks Zone:

Austria’s CQ Investment Group is Winning Firm Partners in Global Corporate Circles

Somewhere between corporations and SMEs is a sweet spot — the mediumsized enterprise — and Austrian firm CQ Investment Group has been comfortably settled in that niche since 1991.

The group consists of several asset management companies with the emphasis on quantitative strategies, as well as ESG and impact investing. Other strengths are specialisations in private debt and alternative investments; particular expertise has also been developed in the management of international pension funds. CQ Group investment products and services are rated among the best in their respective categories. They have won multiple awards and recognition from institutional clients.

In the three decades since it was founded in Vienna, CQ Investment Group has established itself in 21 countries. Its financial products and services are distributed to institutional clients and via wholesale channels in the respective markets.


In 2003, the group launched the first trendtracking fund in co-operation with ARTS Asset Management. The pioneering move introduced the first quantitatively managed retail fund to the market. The CQ-ARTS trend-tracking funds are now a major fixture in the product landscape, included in many unit-linked life assurance products. It has, again, been recognised with awards for its performance.


Vision Microfinance is a platform established by Impact Asset Management GmbH (previously CQUADRAT Asset Management GmbH) in 2006. It allows entrepreneurs without access to funding to take out small loans, giving them the opportunity to develop or establish their small businesses — sometimes to escape poverty.

To date, more than $2.05bn has been awarded to 309 microfinance institutions in 67 countries. This meaningful and sustainable aid helps families gain access to food, medical care, and education. Vision Microfinance was recognised by CGAP (Consultative Group to Assist the Poor) in 2010 for the transparency of its reporting. It has several times been awarded the LuxFlag label by the Luxembourg rating agency.


As a subsidiary of CQ Investment Group, Impact Asset Management is one of the leading nonbank asset-management companies in Germanspeaking territory, specialising in the selection, analysis, and management of absolute return and sustainable investments.

As far back as 2011 — years before the rest of the sector stumbled across this area — American non-profit ImpactAssets included Impact Asset Management GmbH in the top 50 impact investment firms. Not only are the products’ financial returns considered; their social and environmental impacts are decisive for selection.


The CQ Investment Group has been supporting social projects in various areas over the years. Many of these focus on young people from disadvantaged backgrounds, orphans, or children with disabilities.

The group finances projects worldwide to promote health, improve education, and combat poverty. When deciding which support, it places particular emphasis on economic understanding, making an important contribution to social co-existence.


In conjunction with Talanx, the third-biggest German insurance group, the CQ Investment Group is operating a joint venture in Armenia to manage the state pension fund on behalf of the Armenian Central Bank. Co-operation with Raiffeisen Bank International AG has led to initiation of a private equity growth fund, which concentrates on SMEs in and around Austria. Pension funds and other institutional assets are being managed as part of a joint venture with the Vienna Insurance Group (VIG), based in Poland.

Over its 31-year history, the group has proved itself to be a strong and reliable partner for global players in 21 European countries. i

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Nottoobig,nottoosmall,recognisedbyallasaleaderinimpactinvestment— thisentityhasprovenitselftimeandagain.

Nordea Finance Facilitating the Sustainable Transition

Nordea is the leading SME bank and business partner in the region, and a company with sustainability and ESG at its core. Chief Executive in Nordea Finance Peter Hupfeld recognised early on that it was vital to close the gap between good intentions and implementation.

“It’s a matter of choosing the kind of role you want to play as a finance company,” he says. “We see it as a long-term investment in society and our own business. Nordea Finance has chosen to be a proactive player in the sustainable transformation by making it easier for our partners and customers to make sustainable choices.”

The Nordics is a very mature market when it comes to sustainability, with a well-deserved reputation as a global frontrunner. “We have a long history and a strong political attitude towards sustainability and social responsibility,” says Hupfeld.

The result is one of high regulation — taxing unsuitable behaviour and subsidising desired attitudes and applications. “We for sure face a more regulated environment in the future and we start to see high demands on sustainability in most public tenders in the Nordics,” the chief executive points out. This spills into the private sector as well. Nordea internal research shows that about half of SMEs require external ESG support in order to succeed with their sustainability ambitions.

“This creates an environment that makes the sustainable choice easier to make. And Nordea Finance partners and customers are fully onboard with that.”

“During the last 3-5 years, we’ve built up strong competence and capacity in sustainable financing and we’re well positioned to play a leading role in supporting our customers in the transition to become more sustainable and eventually reach net zero.”

Clear targets and decisive action are required to meet the ambitious climate objectives. By channelling capital towards sustainable solutions and industries, the positive impact can be achieved.

“In general, we see a strong demand for investment in new green technologies,” Hupfeld says.

Nordea Finance has the commitment, capability, balance sheet capacity, and depth and breadth of partner relationships to make it a winner in a field of fierce competition.

“In Nordea Finance, we have feasible and wellthought-out plans to reduce emissions in climatevulnerable sectors, based on sector-specific emissions data. Sector-specific pathways are being prepared and we want to engage to support customers in establishing credible green transition path.”


Digital solutions are helping to improve access and reduce cost. Paperless financing is a sustainable choice, Hupfeld believes. “In general, investing in digital customer interactions and omnichannel customer experiences is key in making financing easy and more sustainable for our partners and customers.”

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Nordea Finance prides itself on being the preferred financial partner in the Nordics — and that’s something the company has worked hard to achieve.
“Our SME customers expect efficient services and across business banking in Nordea, we have seen a steep growth in digital engagement: the vast majority of meetings with small enterprises are held remotely, and for the same group, we
“We have a long history and a strong political attitude towards sustainability and social responsibility,” says Hupfeld.
"Sustainability plans and targets for 2030 or even 2050 may seem far away but if you don’t build the foundation now, you’re not going to make it."
CEO: Peter Hupfeld

have seen a 75 percent increase in digital usage (self-service, digital signing, etc.).”

Nordea’s plans for business banking in the years ahead seem solid; it is well-positioned to

deliver on its growth plan and has built deep and lasting relationships as an industry advisor.

Hupfeld sees this as a great opportunity. “This is a transitional time,” he says. “Sustainability

plans and targets for 2030 or even 2050 may seem far away but if you don’t build the foundation now, you’re not going to make it. We know where we stand and we aim to accelerate our positive impact.” i | Capital Finance International 61

Forward You —

Celebrating the Difference!

Forward You has been revolutionising investment productssince1983.

FWU — Forward You — is an international company in the financial-services sector, founded in 1983 in Germany by Dr Manfred Dirrheimer.

Headquartered in Munich, FWU is now an established player on the international stage. With the brand Forward You, it markets innovative investment products in Italy, Spain, France, Belgium, Luxembourg and Austria, as well as in the United Arab Emirates, Saudi Arabia, Kuwait, Pakistan, Malaysia and Indonesia.

The core FWU products are unit-linked policies offered by FWU-approved and -owned insurance companies FWU Life Insurance Lux SA and FWU Life Insurance Austria AG.

The majority stake in the holding company FWU AG is still in the hands of the Dirrheimer family; Swiss Re Europe SA is a minority shareholder with a five percent share. FWU employs around 450 staff and operates in 10 locations around the world.

In Europe, FWU Life and FWU Invest serve 275,000 customers with €2bn in AUM and contributions totalling €9bn. Globally, the insurance companies within the FWU Group have a total of one million customers.

The expansion of FWU international began with France in 1997, followed by Italy (2006), Spain (2014) and Belgium (2017). After ongoing restructuring and organisational growth, as well as mergers and takeovers in 2016, FWU brought the 25 affiliates together under the brand “FWU — Forward You”.

Founder Manfred Dirrheimer explained the aim of the rebranding as a drive to make it clear to customers, following a swift business expansion, that the group had a shared and consistent brand promise. Financial years with record results followed, leading to a doubling in customer numbers.

FWU then introduced the award-winning product strategy, Pan-European Forward Quant, which offers customers investments in line with the quant method with UCITS funds with fixed, 2 / 2 transparency, and guaranteed contributions. Since its introduction in 2018, 50,000 customers have selected a Forward Quant insurance policy.

In 2005, FWU created FILOS, a digital consulting instrument originally designed for banks. After several revisions and improvements, FILOS was introduced in 2016 and covered all European insurance agencies by 2019. FILOS facilitates a structured, managed sales process with a high degree of customisation. The insurance representative can contact the customer in person and online. In 2021, 80 percent of all European contracts were signed electronically, 55 percent without a physical meeting.

In 2018, FWU completed the acquisition of a life insurance technology platform with the intention to consolidate and standardise tech operations. The FWU TECH entity added speed, agility, and scale to FWU’s continued expansion plans.

In 2020, FWU technological expertise ensured that the group was able to navigate and overcome the Covid-19 crisis. In just a few weeks, FWU developed a digital solution for remote support and conclusion of contracts, the so called RSS. It was now possible for insurance representatives and customers to remotely access FWU products.

From the initial discussion to the online signature: the necessary steps for signing an insurance contract could be carried out — conveniently and securely — from one’s home.


FWU Group — Forward You to its friends — has been offering “a different kind of life insurance” since 1983.

With €2bn in AUM in the FWU Invest portfolio, offices in Germany, Italy, Spain, France, Austria, Luxembourg, UAE, Pakistan and Malaysia, and 300 sales partners across Europe, the company has come a long way.

The company was founded in Munich by Manfred Dirrheimer, and now has 450 employees — 20 percent of them IT specialists — in 10 locations worldwide. Those employees serve more than a million customers worldwide.

FWU Factoring was founded in 1991. The financial services company has more than €1bn in active transactions. A few years later, in 1994, FWU developed investment products on European insurance funds and introduces its

first unit-linked life insurance in Luxembourg and Germany.

FWU entered the French market in 1997. In 1999, the takeover of FWU Life Lux and founding of FWU Invest took place.

In 2003, the firm introduced its first takaful product in the UAE that meets all Sharia requirements. It expanded its operation into Italy in 2006. The concept of combining guarantee and fund products proved to be popular; FWU made major advances on the market.

Here are some of its notable achievements over more recent years: • 2007: Alongside the expansion into Malaysia,

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Chairman: Manfred Dirrheimer

the insurance bank model is becoming more important for businesses in Europe.

• 2007: Best Takaful Provider award by Euromoney Islamic Finance Awards.

• 2009: Entry into Pakistani market.

• 2011: Best Takaful Operator 2011, awarded by Economy.

• 2011: Award for the exceptional individual contribution of FWU to the Islamic financial world, by the Financial Forum of Kuala Lumpur

• 2011: Exceptional ranking of FWU LD 2R contributions in Morgen & Morgen, with a mention for highest pension contribution for the first year.

• 2013: To grow the group, the merger with (and takeover of) Excel Life France is instigated.

• 2014: In light of the success of the fundbased guarantee products, FWU introduces them

in Spain — which has become its second-largest market.

• 2015: With the takeover of Skandia Austria, the number of FWU customers grows — by an impressive 65,000.

• 2016: FWU becomes Forward You as part of a rebranding to indicate the mutual mentality of all affiliated companies.

• 2018: FWU presents the latest version of the complete FILOS platform, the UCITS umbrella fund, and the innovative product Forward Quant.

• 2018: FWU acquires a life insurance technology platform, dubbed the FWU TECH, to drive speed, agility, and scale to all operations.

• 2018: Best Portfolio of Unit-Linked Products Europe, awarded by

• 2019: Introduction of a brand-new customer

portal in Italy.

• 2020: Thanks to its technological expertise, FWU is able to navigate the challenges of the global crisis triggered by the Covid-19 pandemic. In just a few weeks, FWU develops a solution for remote operations allowing insurance reps and customers to access its products via mobile devices. From the initial discussion to the online signature, the necessary steps for signing an insurance contract can be carried out at home.

• 2021: FILOS Tech implementation.

• 2021: A new unit-linked product, Forward Unico, is launched.

• 2022: FWU integrates ESG investing awards. i

Additional information on FWU products and | Capital Finance International 63

Spotlight on Architas CEO Matthieu André

Blending a finance-focused career into general management perfectly prepared Matthieu André to take over as CEO of multi-manager investment firm Architas in March 2020.

André’s career path has seen him work in eight entities and five countries over his 27-year tenure with the AXA Group, of which Architas is a part. He joined in 1995 after graduating from ESLSCA Business School in Paris and spending six years at Ernst & Young as a consultant.

Since joining AXA, André has held senior leadership positions in Asia, Europe and the US, predominantly focusing on the Life & Savings and Asset Management segments. This breadth of experience gave him a deep understanding of AXA’s global customer base. That, in turn, has allowed him to drive strategic initiatives and identify opportunities to support and best serve the diverse needs of the group’s clients.

Matthieu André joined Architas with an objective: to transform the business which started with the sale of its UK-regulated entities in 2020. His vision was to build on its global foundations by redefining its strategic position, accelerating transformation, and restructuring Architas to align it with the AXA Group.

His first focus was on driving and expanding growth across Europe and Asia.

André and the Architas management committee worked in unison to develop the firm’s investment proposition, focusing on current and emerging client needs. Responsible investing identified as a priority — and a commitment that has become a cornerstone for the development of Architas.

From ensuring the full integration of ESG factors in the investment process — for all Architas products — to launching dedicated sustainability-focused funds, responsible investing is embedded at the core of the business.

Matthieu André was at the helm as Architas navigated the global pandemic, and the market volatility that it brought in its wake. The focus was on supporting customers, being present to respond to their needs, and providing reassurance in stressful times.

The CEO’s attention now turns to the next phase for the development of Architas business, and the opportunity to strengthen asset management activities as growth engines for the AXA Group with the creation of the new business AXA IM Architas within AXA IM. Building on the collaboration between AXA IM and Architas, this



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new unit will be the unique distribution channel for products for AXA’s insurance Change, service, responsibility and ambition are constant forces in the ongoing Architas evolution. i CEO: Matthieu André | Capital Finance International 65 upgrade your practice Are you looking to purchase new or perhaps sell & lease back your existing medical imaging equipment? A bespoke lease of up to 5 years with competitive terms could be the perfect solution for you to free up capital. Contact a team member to discuss your unique business needs. doctors & healthcare professionals +971508467126 LinkLease Equipment Rental Dubai, United Arab Emirates

Specialist Multi-Manager Architas:

Responsible Investing Comes First

Architas was launched in the UK in 2008 — and now operates in 13 countries across Europe and Asia, with €28.6bn in AUM.

Architas is a long-term, global multi-manager providing investment and advisory services across risk profiles. Its aim is to help individuals and institutions meet their financial goals: capital growth, income generation, and wealth preservation.

Architas is wholly owned by the AXA Group, but operates independently — a best-of-bothworlds situation. It benefits from the stability and leverage of being part of a global leader in insurance and asset management, while retaining the agility and entrepreneurial spirit of a smaller company.

As a member of the AXA Group, Architas shares the ambition of protecting customers over the long term — and creating a stronger and more sustainable society. Specialising in multimanager investing means bringing together the best fund managers available, rather than picking individual stocks to create portfolios. With a rigorous approach, the firm identifies managers who are experts in their field, then blends complementary funds to create diversified investment solutions.

But the process doesn’t stop there. Portfolios are constantly monitored and assessed to weed out any underperforming fund managers. The Architas investment team believes in active management, adjusting allocations to take advantage of opportunities in the markets, and responding to changing conditions.

All Architas portfolios are diversified across a range of sectors, geographies, and, in some cases, asset classes. As each investment will behave differently in varying market conditions, and spreading investments can help to reduce any volatility and provide smoother returns over time.


Integrated within this multi-manager approach is a commitment to responsible investing. Architas recognises the impact companies can have

on the world around them, both positive and negative. The firm takes on the duty of ensuring this factor is taken into account in all investment decisions.

By using its influence as a big investor, Architas can help to direct investment flows into funds that follow good ESG principles — and engage with the managers of those that are falling short. A key target of this approach is to ensure that the selected funds perform well for clients, while adhering to principles that reflect ESG integration.

This incorporation of ESG factors into screening procedures adds a protective layer of risk control, and provides diversification for investors.

Across all Architas fund-of-funds offers, ESG due diligence is embedded in the fund or manager selection process. Funds judged not up-toscratch are excluded, meaning investors can be confident that even offers without an explicit sustainable investment objective will meet strict ESG criteria.

Underscoring this commitment, Architas has been a signatory of the United Nations Principles for Responsible Investment (UN PRI) since 2018. This is a set of six principles under which signatories commit to incorporating ESG factors into their investment decisions.


As well as ensuring ESG considerations are fundamental to all of its offers, Architas offers dedicated sustainability-focused investments. At the start of 2022, it launched the first of its EPIC

— Ethical and Prosperous Investment Choices — investment range.

The first fund in the range was an equity-focused portfolio which gave investors access to three megatrends: digital transformation, health and wealth, and sustainable planet. A multi-asset version will be available in some regions for 2023.

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Company formed with just 10 employees has come a long way in just 14 years — and it has a clear vision for the future.
"By using its influence as a big investor, Architas can help to direct investment flows into funds that follow good ESG principles — and engage with the managers of those that are falling short."

These funds are classified as Article 9 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR), which means they have a specific sustainable investment as their core objective. Architas commits to having 100 percent of the funds’ total assets (excluding cash) invested in Article 9 securities, based on extensive research and categorisation.

Architas CEO Matthieu André underlines the Architas commitment. “We are committed to sustainable investing,” he says, “and include ESG criteria in all our fund selection, looking to draw on the strength of the AXA world and external asset managers.

“We’re also committed to ensuring that we are aligned to the overall AXA Group purpose of acting for human

progress by protecting what matters. This enables us to build stronger propositions for our clients.

“The Architas EPIC fund range provides investors with access to funds that specifically focus on sustainable objectives, ensuring their investments are being made in-line with the highest regulatory requirements, and showcasing our continued commitment in this space.” i | Capital Finance International 67

Challenging World, Capable Bank: CBBH has Thrived Despite Litany of Disorder on International Stage

Its objective is to maintain the stability of the domestic currency, the convertible marka, which is backed by the euro. The CBBH has operated under complex conditions, within the country and internationally, but has managed to maintain that monetary stability. It has also contributed to the macro-economic and financial stability of the country as a whole.

Challenge is nothing new to the CBBH, starting with the introduction of the single currency, the reform of the payment system and the banking sector, the exchange of DEM for EUR and the fixed exchange rate for KM. Factor in the financial crisis of 2008/2009, and the implementation of projects with the European Central Bank and the central banks of the Euro system until the introduction of European central banking standards and it is plain that there have been hurdles to overcome.

Recent years have also been marked by turbulence in Europe and worldwide. Under the leadership of its governor, Senad Softić, CBBH has thrived despite the pandemic and geopolitical events. It has ensured the stability and convertibility of the domestic currency, the maintenance of cash circulating, and the increase of foreign exchange reserves. The CBBH ended 2021 with the highest-ever amount of foreign exchange reserves.

It also managed to implement projects that have improved business processes.

Foreign exchange reserve investment is one of the main tasks of the CBBH. Investments are adjusted for safety, liquidity, and maximum profitability. Complex conditions mean that has not been a painless process — but it was necessary. Although it is a non-profit institution, the CBBH has seen a positive result. It has upgraded its diagnostic tools. Since 2021, it has been publishing nowcasts of economic activities, the dynamics of real GDP and inflation in Bosnia Herzegovina on a quarterly basis.

The stats been improved and harmonised with European standards. In the area of statistics, a lending survey has been introduced, enabling more detailed analyses of credit market trends, aiding analytic and research tasks. This research

in methodological terms has been significantly adjusted, with a similar survey conducted for the euro area.

Following up with the trends and modernisation of payment systems is another objective. In 2019, a new giro-clearing system adjusted with the ISO 20022 i SEPA standard was put in operation. There are ongoing preparations for innovative payments methods in line with modern EU and international trends. This encourages financial inclusion, decreases costs, simplifies payments, and improves the infrastructure of domestic financial markets.

Rating agencies mention the CBBH as an important economic anchor in the country, with activities and policies in line with the best global practices.

In the area of financial education and inclusion, the CBBH has taken a leading role, devoting special attention to younger population groups. In focus are users of financial remittances from foreign countries, with the advantages of official channels for fund transfers and instruction on how best to send funds.

These efforts have required intensive, timely, and clear communication with the public. Stability is a key reference in the messages CBBH sends out. It has kept public confidence as an independent institution, with the stability of marka a key factor.

The replacement of treasury machines in all vaults with state-of-the-art equipment was successfully completed. According to the Transparency International Corruption Perception Index (CPI) for 2022, Bosnia Herzegovina takes a low position in Europe. By developing compliance and raising the level of business ethics and integrity, the CBBH has the safe, protected and anonymous reporting of any irregularities. This applies in conflictof-interest situations, corruption, and other irregularities.

The CBBH has always contributed to the country's international obligations. It has earned a reputation as a credible source of data, information and analyses. The institution is considered to be a public good, and the effects of its activities have always been communicated to the public.

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The Central Bank of Bosnia and Herzegovina (CBBH) started operating in 1997 as the sole institution responsible for issuing currency and monetary policy in the country.

International financial institutions such as the International Monetary Fund, the European Central Bank and the European Commission have also stressed the achievements of the bank, and acknowledged the significance and role of the monetary policy and currency board. It has been recommended to continue its role in protecting the integrity of currency board, and its independence.

The future will hold new challenges. The fact that the CBBH is considered to be one of the most stable and successful institutions is an acknowledgement of everything done over the past 25 years. It is seen, too, as an obligation to constantly improve.


The governor of the Central Bank of Bosnia and Herzegovina, Senad Softić, is a full-time professor at the Faculty of Economics of the University of Sarajevo.

He is the chairman of the management board of the country’s Deposit Insurance Agency, and a

member of the Advisory Group of the European Fund for Southeast Europe (EFSE).

Softić is the author and co-author of 16 books and monographs. In his many years of consulting and research practise, working at the Institute for Organisation and Economics in Sarajevo (19871995), and the Economic Institute in Sarajevo (1995-2007), he participated, as author, coauthor or manager in the preparation of more than 130 studies, projects and papers from various micro- and macro-economic areas.

During his professional career, he has been the deputy chairman of the supervisory board of the Investment Bank, later the Development Bank of the Federation of Bosnia and Herzegovina.

For his work on preserving monetary stability and his contribution to maintaining the financial stability of BH, Senad Softić has won much recognition. He was BiH — European Person of the Year in the Field of Finance, an award by the European Independent Agency Sarajevo Secretariat of the Regional Directorate for the Selection and Promotion of Managers of BH, Southeast and Central Europe (2022).

He received the Golden BAM for his contribution to the stability of the country’s financial system of (2020), Večernjakov pečat for the person of the year in the Public Administration category for 2020, the Best Manager in the Field of Finance (2017), and recognised for the best university textbook for his book Symptoms and Causes of theCrisisofCompaniesinBH (2011).

Softić has rich international experience, and is a member of several international bodies in the field of monetary policy and management, including the Advisory Group of the European Fund for South-Eastern Europe. Since 2015, he has participated as an opening speaker, speaker, and panellist in numerous international conferences organised by international financial institutions including the International Monetary Fund, World Bank, European Central Bank, and European Bank for Reconstruction and Development.

He is a permanent participant in the Economic and Financial Dialogue between the European Union and the Western Balkans, Turkey, and Brussels (2016-2022). i | Capital Finance International 69
Governor: Senad Softić

Norvestor: A Sustainable Long-Term Value Proposition in Private Equity

The disclosure of environmental, social, and governance (ESG) practices by private equity funds has been associated with a 4.9 percent increase in the net IRR (internal rate of return). That is the conclusion of a London Business School research paper. Whilst private equity funds aren’t usually required to disclose their ESG policies, heightened public awareness and the need to remain competitive with publicly listed companies are driving PE funds to greater transparency and improved ESG reporting.

The paper also found that PE funds with a higherthan-average rate of disclosure tend to sustain a significantly reduced environmental footprint.

The authors conclude that over the past 20 or so years, ESG reporting went from an esoteric sideshow to claim centre stage. It also became a tool to identify, extract, and monetise opportunity.

Nordic investors and funds have been in the ESG driver seat since the advent of ESG as a set of performance parameters. Perhaps, none more so than Norvestor which boasts nearly three decades’ worth of experience in partnering with businesses on the cutting edge of their fields.


Norvestor is focussed on companies providing services that can be streamlined and upgraded through the judicious deployment of technology, upping operational efficiency and creating tangible value for both its clients and the wider society.

Norvestor treads carefully but decisively in those sectors where its team possesses experience and a strong network. The company prefers takeovers or close partnerships with targets that are managed by strong and ambitious teams. The aim is to spur accelerated growth during the holding period – usually between three and six years – through the expansion of geographies and the acquisition of complementary businesses in addition to implementing digital strategies.

Norvestor’s approach to investing has remained largely unchanged since the 1990s – and with good reason. During its ownership period, operating profits of Norvestor portfolio companies have grown by an annual average of around 20 percent. Norvestor typically concentrates on medium-sized targets with turnovers in the €25m to €250m range. Its funds have made 82 platform buyouts and partnered in over 300 add-on acquisitions. Norvestor has successfully executed 54 exits, including 16 IPOs.

Sustainability with a view to building long-term value is a key tenet of Norvestor’s investment philosophy. This includes companies with circular economy business models. One such example is SmartRetur, a Nordic pioneer in reverse logistics, specialising in reusable packaging. The company provides physical handling and digital inventory management of wooden pallets for a diverse customer base that includes grocery chains, breweries, carriers, manufacturers and construction companies. SmartRetur was built to reduce waste: 100%

of the wood pallets sourced in 2021 were sustainable according to industry standards, and the recycling rate is documented at 98%. The company’s business model is centered around industry collaboration and sharing of pallets to reduce the total number of pallets in circulation, and to reduce unnecessary shipments of pallets. Investing in digital capabilities has allowed the company to monitor and report factors of the clients’ logistics ESG footprint: pallet reuse level, vehicle capacity utilisation, journey length, number of shipments and emissions. This way

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Partner (Norvestor): Henning Vold Group CEO (Position Green): Joachim Nahem
"Nordic investors and funds have been in the ESG driver seat since the advent of ESG as a set of performance parameters. Perhaps, none more so than Norvestor which boasts nearly three decades’ worth of experience in partnering with businesses on the cutting edge of their fields."

the clients can take action to cut cost and cut carbon emissions.


In April 2022, Norvestor agreed to the takeover of sustainability software platform Position Green and the advisory firms The Governance Group and Velocity Consulting. The three companies have since been clustered in the Position Green Group. This holding joins leading experts in ESG software, strategy, and communication and helps corporates fast-track their sustainability agenda.

Position Green Group currently has a portfolio of over 400 clients and more than 100 consultants across offices in Norway, Sweden, and Denmark. The holding hopes to make additional acquisitions to broaden its European footprint. Founding Partner Joachim Nahem of The Governance Group, now CEO of the Position Green Group, sees increased demands from regulators, investors, and supply chain owners for companies to articulate a clear ESG strategy supported by robust data.

“By bringing these capabilities together, supported by the experience and capital of Norvestor, our ambition is to help companies make the right strategic decisions and provide them with the necessary hands-on expertise, whether that’s helping them set a science-based target, conducting human rights due diligence in their supply chain, or providing a second-party opinion on a sustainability-linked bond”

Mr Nahem emphasises that his team provides a unique integrated sustainability offering that combines strategic consulting services with data and software, e-learning, and executive training: “This helps manage ESG-related risk, speed up value creation, and build resilient and sustainable organisations.”

Norvestor Advisory Partner Henning Vold, a renowned expert in IT growth companies, says that sustainability principles and policies will be ever more important as value drivers in business and investment decisions: “Norvestor has set ambitious goals to be an enabler of the global sustainability agenda. Position Green Group brings together a leading and fast-growing sustainability software platform with two bestof-breed sustainability consultancies. We are impressed by the strong positions that these companies have built in their respective market niches. Position Green Group accommodates corporations’ need for an integrated sustainability partner at the forefront of ESG, and we are enthusiastic about the opportunity to support management in scaling the company internationally.”

Norvestor holds a controlling stake in Position Green Group but shareholders of its three constituent companies will re-invest alongside the PE fund. i

Winter 2022-2023 Issue 71

> In Conversation with Managing Partner of Worthwhile Capital Partners: Christian Andersson Would you please say a little about the career steps leading to your present appointment at Worthwhile Capital Partners?

CA: I have had the good luck to work with institutional investors for a couple of decades now and most of that time I spent with Goldman Sachs and Bank of America Merrill Lynch in London (where I was the Managing Director responsible for the Nordic pension- and life insurance market). It was a fascinating time, as we learned how to support the CIO’s decisionmaking processes, and advise on strategic asset allocation, balance sheet risk management and regulatory changes. This experience was very helpful when we set up Worthwhile Capital Partners in 2018. We wanted to bring our ambition, experience, and investment expertise into a fundraising business, which has traditionally been a sector with a different skillset.

In your view, what personal attributes contribute most to business and private life success?

In my career, I've learned that honesty and strong personal values are essential for building trust and maintaining positive relationships in both business and personal life. In the financial world, surviving one's reputation is crucial. This means standing up for your values, even in challenging or difficult situations. For a newly started company, this involves working hard to build and maintain a positive reputation, being transparent in your actions, and proactively addressing any challenges or negative feedback that may arise.

One key aspect of surviving your reputation is the ability to adapt to changing circumstances and environments. This is important not only for business success, but also for navigating the ups and downs of personal life. Maintaining a strong reputation and staying true to your values requires effort and dedication, but it will ultimately be worth it for the benefits it brings.

You refuse business because of poor sustainability impact. Does this attitude threaten or improve your bottom line?

Our business model has not been optimised to drive financial performance in the shorter run. We are contacted by 60 to 70 fund managers per year, which is astonishing since we only just got started, but 95 per cent of them do not reach our criteria and much of this relates to sustainability. Of course, we choose managers with strong pedigrees in managing risk and return, but the overall philosophy needs to be driven by sustainability and the manager must genuinely stand behind an ethos to create a better world. Our business is growing by 45 percent per year,

and it could have been far greater than that, but we have chosen a clear strategy to support only a select group of fund managers who can help improve our planet, our societies, and our economies. That said, we take a long-term view with our focused fundraising strategy and remain convinced that once investor capital begins to accelerate commitments to sustainable investing, we stand to benefit against competition.

Where do you expect to see the strongest investment opportunities in 2023 and going forward?

Our team have spent a lot of time identifying and researching the key drivers for strategic

asset allocation for the coming years, and we will focus our work on five secular trends. These are the large macroeconomic shifts, the demographic burden that will impact pension funds, the accelerating impact from climate change, the increased regulation, and growing geopolitical risks. From there, it is not difficult to conclude that our investors need to diversify their portfolios and invest more sustainably. Pension funds, for example, need to take the fiduciary responsibility to embed climate risks into their risk management, and invest long-term in assets that allows its policy holders to live and prosper in a healthy world once they are old enough to take

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Managing Partner: Christian Andersson

out their pension. Nothing else makes sense. Policy and regulation can support this behavior, and it does. As for our work on fundraising, we will continue to support the energy transition, and we want to begin looking at investments supporting food security and water security. We are currently road showing our new Review Book to all our investors, which outlines these thematics and the investment opportunities that follow. We do a lot of work with investors between our work on fundraising.

What excites you most about the commercial world?

Dealing exclusively with sustainable alternative investments, we are particularly excited about the growing recognition of the importance of sustainability and the impact that businesses and investors can have on the world. At Worthwhile Capital Partners, we are dedicated to making a meaningful impact through our investments, and we are committed to working with our investors to create a more sustainable and equitable future. The commercial world is a dynamic and evolving landscape, and we are excited about the opportunities that lie ahead for our firm and our investors. By focusing on sustainable alternative investments, we believe we can generate strong returns and make a positive difference in the world.

What excites you most about your role at WCP?

As a Managing Partner at Worthwhile Capital Partners, I am passionate about driving business forward and working alongside my talented colleagues. I appreciate the independence of our firm, which allows us to maintain high standards and act with conviction when selecting our business partners. We take as much risk in choosing them as they do in appointing us for their fundraise. I also value the supportive culture at Worthwhile Capital Partners, which encourages collaboration and teamwork. These factors make my role at the firm fulfilling and rewarding, and I am excited about the potential for growth and success in the coming years.

How do you motivate your team? What is your preferred style of management?

My primary focus is on motivating my team and ensuring that they have the support and resources they need to succeed. I believe that the best way to motivate people is to provide clear goals and expectations, and to give them the autonomy and support they need to achieve those goals.

Worthwhile Capital Partners is characterised by a positive and inclusive work environment, where team members feel valued and respected, and where their contributions are recognised and appreciated. In terms of my management style, I prefer to lead by example and to empower my team members to take ownership of their work. We also prioritise open communication and collaboration, and I make an effort to listen to and understand the perspectives and needs of my team members. Overall, my goal is to create a positive and productive work environment where everyone can thrive and achieve their best. i

Winter 2022-2023 Issue 73

Chew on This: A Piece of Gum has a Leading Role in Musician’s Book on the

Legendary Nina Simone

Nick Cave, the man who had brought her there, remembers watching his Bad Seeds bandmate Warren Ellis in the crowd “awestruck and glowing” as she sang, and then “crawling up onto the stage, looking possessed and heading for the Steinway”. Ellis had clocked Simone discarding a piece of chewing gum on the piano, and he had gone to retrieve it.

Ellis would keep the odd artefact in its original towelette and bag for the next couple of decades, almost too scared to lay eyes on it. Eventually, he decided that Nina Simone’s gum should be shared with the world. In 2021, it formed part of Nick Cave’s Stranger than Kindness touring exhibition.

The book Ellis wrote about the odd experience, Nina Simone’s Gum: A Memoir of Things Lost and Found, is part of a tale told in objects and artefacts. It is not just about the things we collect, but how these things — and people, and experiences — shape us. The book should be appreciated by all those fascinated by nostalgia.

Nina Simone’s Gum isn’t about Nina Simone at all. It barely touches on her life, instead marvelling over her impact, her candour, and her brilliance. It is a story told in snapshots: anecdotes of her ordering champagne, cocaine, and sausages before the show, her insistence on being called “Doctor” Simone. “Dr Simone surveying it all,” Ellis imagines, “defending the downtrodden.” Ellis uses a soft voice in his account; in many ways, he is the apparent antithesis of Cave. It’s easy to see how their collaborative run has created some memorable songs. His choice of photographs and images is touching, too. Images of the gum being cast in plaster are displayed next to scans of Emily Dickinson’s herbarium. “It felt like something beautiful was growing around the making of this replica,” Warren muses. He quotes Yale English Professor Richard Sewall as saying: “Take Emily Dickinson’s herbarium far enough, and you have her.” It’s a fitting analogy; the little resin gums appear like flower buds when collected on the page.

There are many images of interest — Polaroids, rare shots of Simone at that final concert,

screenshots of texts and photographs of Warren’s personal life — that are valid, and equally candid. Sometimes they are almost amateurish, in a way that makes you feel that the author might be a friend from the office, or your uncle at a family dinner. But the book remains an intimate glimpse into the mind of a brilliant artist.

Not a book about Simone, then, but not one about Ellis, either. The author is a wildly talented musician — playing violin, piano, accordion, bouzouki, guitar, flute, mandolin, mandocello and viola — but what shines through is his

unfailing belief in the power of people. “People are ideas waiting to happen,” he writes.

It is a contagious notion that affects everyone who comes into contact with it. The gum becomes a symbol imbued with Simone’s spirit, and Ellis’s world is full of magic and possibility. “Keep the sacred and magical close,” he advises.

If Nick Cave’s 2022 book Faith, Hope and Carnage is about the importance of assigning spirituality and meaning in our lives, Ellis’s is the how-to manual. “Create your Gods,” he writes, “and they will watch over you.” i

74 | Capital Finance International
When Nina Simone left the Royal Festival Hall stage on July 1, 1999; it would be her last ever UK performance.


Vale Pier Luigi Ferrari The Man and his Legacy

The passing of our father, Pier Luigi Ferrari, President of First Marine Insurance, has been marked by condolences and messages from his friends and peers.

“He was a monumental person in the P&I (Protection and Indemnity) world and leaves a tremendous legacy behind in the maritime industry.” reads a typical testament. “We shall remember him with great admiration and as a significant leader and innovator.” adds another.

It’s hard for us to summarise our father’s career, but once we asked him what he considered his main driving values. We share his words with you: “Knowing how to listen, understanding owners’ needs, and creating the right services to satisfy those needs.”

He used to recount what he believed to be behind his main successes, at least at the beginning of his broker’s career.

“Everyone, especially ship-owners” he said “love telling their interesting experiences. Knowing how to listen with profound attention is certainly a key to understand their needs, and to forge our services around these needs”.

Back in the 1960s, the role of the owners’ broker, as we term it today, was not well known. At the time, the prevailing figure was the insurance agent, who was there only to safeguard the interests of the insurance company employing him, sometimes to the disadvantage of the client.

“A key to my success has been to act as owners’ broker and explain to the clients that our role is to protect their interests, without compromise”.

Our father forged strong and lasting relationships with his colleagues, and cared for their wellbeing. Another of his important values was trust.

“Mutual trust has been the key to create, together with colleagues, the right working environment, and the passion for our work,” he said. “The wellbeing of my colleagues has always been my priority, and a key to the success of my organisation”.

Our father, at the end of his career, found himself alone in embracing his original vision of sharing his affection, positiveness, and devotion to his family and his job.

This happened in his old company, after 50 years from founding it, and for this reason he left and started FIRST MARINE with his sons, a new reality, which we are now, more than ever, proud to keep growing. i

Winter 2022-2023 Issue | Capital Finance International 75

Loss, Yearning, Learning and Hope: Cave’s Grief and Glory Laid Bare

Nick Cave’s work is permeated with a sense of longing, and seems to attract other lost souls.

Speaking of his online project, The RedHandFiles, in which members of the public may send unmoderated questions to Cave, he says the submissions “tell me, explicitly and repeatedly, that we all suffer”.

The pandemic is a recurrent theme in Faith, Hope and Carnage, an event that ruptured something essential in society. “Whatever we had assumed was the story of our lives,” he muses, “this invisible hand had reached down and torn a great big hole in it.” The book offers a spiritual homily of sorts, and a beacon of hope.

Faith, Hope and Carnage is the result of 40 hours of conversation between Cave and journalist O'Hagan. Its 300 pages condense the dialogue into loosely thematic chapters exploring everything from the singer’s time in rehab to conflicts within the band.

Those hoping for a memoir will be disappointed. The book oscillates between creative manual and quasi-religious text. To the uninitiated, Cave can come across as didactic or pedagogic. His strong voice is easily mistaken for selfassuredness. O'Hagan provides a muchneeded, gently questioning tone, reminiscent of a Socratic student. The result is a moving text that thankfully never reads like an abnormally long interview, nor as a sermon.

Especially affecting are Cave’s musings on grief. The book touches on the death of his teenage son, Arthur, in 2015, his mother, Dawn, during the pandemic, and ex-girlfriend and artist Anita Lane in 2021. Another of his four sons, Jethro, died in May this year.

You get the impression that Cave initially agreed to quite a different project: a sort of behind-

the-scenes look at his work, perhaps. But as he notes himself, “grief is a magnetising force from which the book cannot escape”. It is impossible to talk about his work without talking about his grief, because one saturates the other. “The loss of my son is a condition, not a theme,” he tells O’Hagan. “It infuses everything.”

Fans of his most recent albums, The Skeleton Tree, Ghosteen, and Carnage, will walk away with a greater appreciation of his life and talent.

Listening to Cave’s music takes on a new meaning after reading that it as a safe haven for Arthur. “I think his spirit inhabits this work,” says Cave, “and I don’t mean that in a metaphorical way. I mean that quite literally. This isn’t an idea I’ve articulated before, but I feel him roaming around the songs.”

Talking about the lyrics to the opening song on the album Ghosteen — “and you're sitting at the kitchen table, listening to the radio” — Cave explains that though this unremarkable image is for him transcendent, because “it’s the last unbroken memory of my wife”.

The importance attached to faith and religions is at times disarming. Cave’s words are reminiscent of philosophers like Camus and Sartre, drawing on the moral obligation to rebel against an absurd existence. Faith,HopeandCarnagehas something of the spirit of Sisyphus, and, as Camus says, “one must imagine Sisyphus happy”.

Some will find these conversations hard to read, and many will disagree with the conclusions. But Cave draws his own path, with conviction and certitude. Even for those who do not agree with everything he says, it is hard not be inspired or imbued with a sense of hope for the world. i

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‘I think there was always a yearning within me for something else, somethingbeyondmyself,fromwhichIfeltexcluded...’
Book Review - Faith,HopeandCarnage by Nick Cave and Sean O’Hagan Nick Cave in 2009
"Listening to Cave’s music takes on a new meaning after reading that it as a safe haven for Arthur."

Kathrein Privatbank:

It’s Been a Tough Year All Round, But There Are Strategies to Cope

Wilhelm Celeda, CEO of Austria’s Kathrein Privatbank, agrees with the international assessment: 2022 was a particularly challenging year for investors.

It presented a rare scenario: both bonds and equities suffered negative performance and heavy price losses. From January, most stock markets have been in a bear phase. The mixture of high inflation, lower earnings expectations and generally poor sentiment continues to be “an unpalatable cocktail” for equities.


The investment environment may have been challenging, but active portfolio management allows for the continuous adaptation of investment strategy to the current circumstances. “We have implemented strategies in our portfolios that outperform the market in this challenging environment,” says Celeda.

“In the equity sector, the focus is on defensive stocks, and those with pricing power. We won a record of six Austrian fund-of-funds awards this year — something that underscores the quality of our portfolio management.

“In the bond sector we invest in local currency bonds of emerging countries to generate higher returns — but only in issuers with excellent credit ratings, such as development banks.”

To generate an upside for clients in such an environment, trend-tracking is another option. “Some of our funds and portfolio strategies offer the possibility to take short positions and create positive returns with significantly less risk.”

Kathrein Privatbank’s investment strategy has been defensive since February 2022, “which has clearly paid off for customers”.


Sustainability is front and centre at Kathrein. “We’re convinced that responsible business practices contribute to a better quality of life for generations to come.” This is no knee-jerk reaction to recent global upheavals; the private bank began its first sustainable investments in 2012.

“We have invested around 50 percent of the total fund volume, abiding by the sustainability approach,” says Celeda. “We increased the number of sustainable funds, certified by independent organisations.” Three were added in 2022.

Kathrein was the first private bank in Austria to introduce sustainable gold. Its clients can buy bullion — certified by the London Bullion Market Association — in amounts from two to 1,000 grams. Gold adhering to this standard ensures minimum CO² emissions and exemplary ESG standards throughout the production process.

“We are proud to offer our clients an outstanding performance,” says Celeda, “paired with relentless commitment to sustainability.” There will be no change to that policy: “We strive to elevate the rate of our sustainably managed assets — and to deliver outstanding performance.”

Whatever market forces may present themselves, where there is a will, and resilience, there is a way. “To manoeuvre through turbulent times,” Celeda says, “you need patience, the right strategy, and a trustworthy partner by your side.” i

Winter 2022-2023 Issue | Capital Finance International 77
CEO: Wilhelm Celeda
Austria’sKathreinPrivatbankhasmanagedtodeliverforitsclientsthrough activeportfoliomanagement—andanemphasisonsustainability.

Film Review

Director Andrew Dominik is so passionate about teaching us that Marilyn Monroe was more than a pinup girl that whether she is having a mental breakdown, being physically abused or raped, it is imperative we are able to see her breasts at all times.

Sometimes it feels as if she doesn’t even exist outside of the sphere of sex. It’s unclear whether Dominik believes we should be disgusted or titillated by these scenes. It is entirely possible to effectively depict sexual violence and abuse without graphic detail, or letting the camera linger too long.

In Blonde, the victimisation of Monroe is relentless to the point it becomes almost unaffecting. Dominik thinks she was dehumanised by Hollywood — but he never attempts to humanise her. More than just a victim of circumstance, she becomes an animatronic doll with no agency or personality.

It makes sense, then, that Dominik has said the film is not about Monroe’s life, but her slow march towards death. It’s perhaps meant to parallel the narrative of his 2007 film The Assassination of Jesse James by the Coward Robert Ford. What separates them is that Blonde makes no real attempt to understand its subject. Whether it is laziness, misogyny or disdain, the result is a poorly executed idea that smacks of torture porn.

Even if you choose to dismiss this as woke hysteria, Blonde is superficial and boring. Dominik has a unique visual style that borders on the quaint, despite upsetting subject matter. The Assassination of Jesse James is a striking feat of cinema. In Blonde, Dominik suffers the fate of many directors who achieve enough commercial success to surround themselves with yes-men. His reliance on unique visual effects is more garish than interesting, and I doubt in the way he intended. The viewer is caught wondering whether the crew was constrained by the sort of software teenagers used for taking Facebook selfies circa 2010.

Even the elements I thought I would enjoy, such as a soundtrack by Nick Cave and Warren Ellis, feel derivative and out-of-place. If the film had been made by a student, it might indicate promise; coming from an acclaimed director, it is a disappointment.

Blonde is the work of an artist who does not trust his audience. Dominik believes the people who don’t like his art are simply too stupid to understand. He’s so worried we won’t “get it” that all subtlety is lost over three hours of having the nail hammered into our heads. President John F Kennedy is depicted watching fireworks on TV as he orgasms, a photograph of Clark Gable becomes animated and talks to a young Marilyn, later she stargazes on a beach and remarks “look at them up there shining so brightly and yet each one is so very much alone”.

The idea that Marilyn Monroe was a helpless victim of the Hollywood cabal has been overdone, and Dominik offers nothing new here. The biggest failure of Blonde is in believing its theory is a radical one. His source material is equally rote, but at least attempts to portray Marilyn Monroe as a human being, someone who had happy memories, a serious interest in literature and dedication to her craft. Although Joyce Carol Oates’ 2000 novel of the same name would eventually be nominated for a Pulitzer Prize, it was not without its detractors.

Internet misinformation is recycled every time there is renewed interest in Marilyn’s life. In

a book review after the publication of Blonde in 2000, a New York Times article confidently informs us that Monroe had 12 abortions, and that these may have been the cause of her difficulty to conceive later in life. It is a remarkable assertion which offers no definitive source, and there is no historical evidence this had any basis in fact. To make a judgment on whether Monroe terminated any of her pregnancies is pointless. It serves to play into anti-choice debate. Oates and Dominik heavily rely on such imagery that the claim that Blonde is a feminist film is hard to swallow.

From the depiction of abortion as a forced, painful, traumatising medical procedure cumulates in the use of an animated foetus that asks Monroe: “You won’t hurt me this time, will you?”. The message is so damaging that even Planned Parenthood released a statement condemning it.

Despite some questionable choices, Oates clearly has a lot of interest in Monroe — something

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“Monroe is more than a sex symbol in new film”, one headlined review of Blonde declares. That must be why actress Ana de Armas spends half of the movie wearing no clothes.
Blonde: Is Marilyn Biopic a Bombshell ... or a Bust?
"Blonde is the work of an artist who does not trust his audience. Dominik believes the people who don’t like his art are simply too stupid to understand."
Ana De Armas at the Blonde Premiere

Dominik seems to lack. In one interview, he labels cinematic work a “whole lot of movies that nobody really watches”. Talking about what inspired her to write Blonde, Oates said: “I felt an immediate sense of something like recognition; this young, hopefully smiling girl, so very American, reminded me powerfully of girls of my childhood, some of them from broken homes.” There’s something to be said for her othering of girls from broken homes, but compared to the low bar of Dominik’s misogyny, Oates comes across as sympathetic.

When it comes to Marilyn Monroe, sympathy is not enough. She did have friends, and one of them, photographer Sam Shaw, once said: “Everybody knows about her insecurities, but not everybody knows what fun she was, that she never complained about the ordinary things of life, that she never had a bad word to say about anyone, and that she had a wonderful, spontaneous sense of humour.”

Watching Blonde, I couldn’t help thinking about Truman Capote’s essay about Monroe, entitled A Beautiful Child. Published a decade after her death, it tried to capture the bubbly side of her. She swears like a sailor. She describes the Queen of England using words that I shan’t repeat, and they would never make it to print. Remarking on the tabloid journalists who ran gossip columns about her, she asks Capote “What did I ever do to those hags?”. I wonder how this woman with a dirty mouth and dry sense of humour has been replaced by one seemingly made of glass. A fragile Ana De Armas, bare-chested, constantly quivering, forever on the precipice of tears.

What Dominik fails to understand in Blonde is that there is no slow march towards death. People’s lives are not neat stories. Even those suffering from mental illness can have happy days, and that tragic drug overdose could truly have been an accident.

The problem with Blonde is it does exactly what it accuses everyone else of doing. It has been described as a “cultural artefact of the #MeToo era” — but it denigrates the women who paved the way for the movement. Monroe was one of those women. i | Capital Finance International 79
Author: Kitty Wenham

Student Digs, Anyone? European Rents May Rise to Meet Demand

Purpose-builtstudentaccommodationcouldbeagoodinvestment thankstoavarietyoffactors.

There is strong investor interest in purpose-built student accommodation across Europe.

European cities are globally attractive and well connected, and continued growth is predicted. The number of 15- to 19-year-olds is forecast to rise 5.8 percent by 2027. Many European markets are facing a shortage of purpose-built accommodation, which could indicate strong growth for rentals.

These factors are driving investment in the sector, which rose by 16 percent to Q3 2022.


At the start of Q4, global events were still impacting the European economic environment. With inflation expected to keep rising on the back of an economic slowdown, a weaker market landscape is expected. The Russian invasion of Ukraine has driven up energy prices, with almost half of euro-zone inflation directly linked to oil and gas.

Despite this macro-economic backdrop, past data has shown countercyclical trends, with student numbers increasing in times of economic downturn — ensuring strong levels of demand for purpose-built student accommodation (PBSA).

But rising inflation rates across Europe pose challenges in this and other real estate sectors. At 9.1 percent in the Euro Area at the time of writing, the cost of living has significantly increased. With PBSA generally moving in line with the residential market (mostly indexlinked), landlords will need to consider how much they can raise rents before they become unaffordable. Rising energy prices present another challenge in countries where “all-in” student rents include utility bills.


Oxford Economics estimates the student-age population in major European cities will rise by an average of 5.8 percent over the next five years. This is due to rising fertility rates in Europe from the beginning of the century until 2010.

Figure 1: Most valued factors by students to pay a rent premium.


Figure 2: Monthly utility interest rate in Europe. Source:EUROSTAT,2022.

The number of students who enrolled in the 2021-22 academic year increased by one percent over the previous period. While this is a smaller increase than the 3.4 percent seen in 2020-21, due to the pandemic, 2022’s statistics fall back in line with average growth.

With the positive demographic forecast for the student-age group and the slowing economy — which is expected to affect the labour market in 2023 —growth of overall student numbers can be expected over the next three years.

As pandemic travel restrictions were lifted, crossborder student mobility resumed. International student numbers increased in nearly all countries (Fig 4), particularly in the Netherlands (11 percent) and Spain (seven percent). Denmark is the sole exception, with student numbers falling by 56 percent from the previous year.

This was largely the result of a government decision to reduce the number of courses taught in English to lower Danish state education support grant expenditure.

80 | Capital Finance International > CBRE:

The availability of English-language courses — and the wealth of cultural experiences in Europe — should continue to attract students from across the continent. Europe has also become more affordable to some international students. As the Euro weakens against the US dollar, Europe will become more attractive for students from America, Hong Kong and the Middle East, where currencies are pegged to the greenback.


With increasing numbers of international students, who often have higher budgets and are less familiar with local housing, a rise in demand for PBSA is likely. Current annual average occupancy rates range from 95 to 98 percent, unchanged from the previous academic year.

Interest rate peaks have forced some buyers to postpone or cancel residential property purchases, moving pressure to the rental market — and thus student accommodation. Across the European cities that have released their 2022 data, prime PBSA rents have increased by an annual average of 3.8 percent. About half of the cities recorded some rental growth, with rents remaining stable in the others.

All-in rents are the standard for student housing, providing more certainty around monthly outgoings. Such rents typically include water, electricity, heating and wi-fi, with some including additional amenities (Fig 6). These extras generally include communal spaces for socialising, 24hour security, laundry services and onsite catering. The perks make PBSA housing a popular option, and act as an enticement to pay premium rents.

With rising energy bills weighing on operators’ costs, utilities may be kept separate from rents and directly charged to students. The other option for landlords looking to offset additional costs would be to increase rents. But they will need to approach this with caution, as students are often less able to absorb any increases. It is possible that governments could step in to protect students from sharp rental hikes.


PBSA is one of the few real estate sectors to have seen an increase in total investment volume in 2022.

The sector has continued its countercyclical trend, with large numbers of young people entering higher education during challenging macro-economic periods. This is probably linked to perceptions of a weakening job market and lower employment prospects.

As a result, PBSA represents a good opportunity for investors to balance their portfolios, with strong demand feeding high occupancy levels and resilient income streams.

Nevertheless, challenges remain. Developers and operators face rising building costs and energy prices, threatening development viability and narrowing operating margins. This is arguably balanced out by a historic shortage of highquality stock and a slowdown in new building completions, which may insulate the value of existing assets.

Investment in the European PBSA sector is fuelled by strong fundamentals: growing student-age populations in many markets, continued strong enrolment in higher education, demand for amenities, and a shortage of quality stock. i

Winter 2022-2023 Issue 81
Swansea, South Wales: Coppergate student accommodation



Once again brings you reports of individuals and organisations that our readers and the judging panel consider worthy of special recognition. We hope you find our short profiles interesting and informative.

All the winners announced below were nominated by audiences and

then shortlisted for further consideration by the panel. Our research team gathered additional information to help reach a final decision. In many cases, senior members of nominee management teams provided the judges with a personal view of what sets their companies and institutions apart from the competition.

As world economies converge we are coming across many inspirational individuals and organisations from developing as well as developed markets - and everyone can learn something from them. If you have been particularly impressed by an individual or organisation’s performance please visit our award pages at and nominate.

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Banca Generali, a private bank founded 22 years ago, is leading Italy’s financial market towards more sustainable practices. The bank is responsible for €80.4bn in AUM, with ESG AUM accounting for 15 percent of managed assets. ESG considerations form the central pillar of Banca Generali’s development and growth plans. In recognition of the bank’s ongoing commitment to responsible investments, it has been promoted by the financial research and index provider, MSCI, which raised its ESG rating from BBB to A in November 2022 and also by Sustainalytics with

ESG Risk Rating update to "negligible". Banca Generali’s MSCI ESG rating has been upgraded four levels over the past five years. In October 2021, Euronext and the Borsa Italiana, where Banca Generali was listed in 2006, included the bank on the newly formed MIB ESG index, which recognises Italian blue-chip companies with exemplary ESG practices. Banca Generali has assembled a top-notch team to ensure clients’ needs and ambitions are met. Nearly half the bank’s workforce is female, and all its consultants are trained in sustainable finance.


Banca Generali excludes companies that violate the UN’s Global Compact from its investment universe and pursues opportunities that can align traditional financial returns with tangible contributions towards the SDGs. It operates on a business model that creates shared value for all stakeholders centred around quality service, innovation and sustainability. In 2021, its activities generated over €1bn in global added value. The judging panel presents repeat programme winner Banca Generali with the 2022 award for Best Sustainable Private Bank (Italy).

The Co-operative Bank is a purpose-driven financial institution that puts customers first and principles into action. The bank is celebrating 150 years of ethical banking and has strong commitments to the planet, its people, and the communities it serves. The bank isn’t a co-operative in the traditional sense, but its ethical policies fall within that business ideology. Since 1992, The Co-operative Bank has sought customer feedback to shape policies and lead by example as the only ethical alternative on the high street. The

bank’s ethical mandate is fully underwritten by its shareholders and celebrated by its customers and partners. The bank has been beyond carbon neutral for over 15 years running - every year it adds an additional offset of 10 percent to address historic emissions. In 2021 The Co-operative Bank recycled 70 percent of its operational waste and reduced energy consumption by 18 percent year-on-year. It relies on renewable sources to power operations and promises that clients’ money will never be used to finance fossil fuels,

oppressive regimes or unethical labour practices. The bank believes in collective responsibility and isn’t afraid to turn away business that doesn’t adhere to the same standards. With its market-leading ESG credentials and financial strengths, the bank is proving that sustainability just makes good business sense. In recognition of 150 years of proactive business practices, the judging panel unanimously voted for The Co-operative Bank as the 2022 award winner for Most Ethical Bank (UK).


As the largest finance company in the Nordics, Nordea Finance plays an outsized role in leading the region’s green movement. It serves over a million clients across the Nordics and has extended more than €21bn in credit volume for personal and corporate vehicles, business equipment, retail financing and corporate factoring invoices. The Nordic market is a global frontrunner in sustainability, and Nordea Finance is committed to strengthening an already stellar reputation. It sets clear climate targets and pursues them with uncompromising vision and

passion. By 2030, Nordea Finance intends to halve its internal emissions and slash emissions across investment and lending portfolios by 40 to 50 percent. It’s fuelling green transport by financing electric and hybrid cars, EV charging stations and e-mobility solutions, like bikes and scooters. It’s helping to move households away from carbon polluting practices by financing renewable energy upgrades, like solar panels and heat pumps. Nordea Finance has identified sustainable megatrends in the household market that will impact future business. Increased

regulation will require more comprehensive tracking and reporting of carbon emissions — an area where Nordea is already ahead of the curve. It capitalises on evolving consumer behaviours and big data analytics to drive the change and unlock a business-first approach to sustainability. The jury has been inspired by the ambitious ESG commitments set — and superseded — by Nordea Finance, a repeat programme winner of the award for Most Innovative Climate Impact SME Finance (Scandinavia, 2022).

Winter 2022-2023 Issue | Capital Finance International 83


Since its launch in 1989, private equity firm Norvestor has been backing innovative companies seeking to solve global challenges. The firm targets Nordic companies with inspired leadership and revenues ranging between €25m to €250m. The firm has a large and experienced team, with offices in Oslo, Stockholm, Helsinki, Copenhagen and Luxembourg. Norvestor has integrated ESG considerations throughout the investment process due to its potential as a driver for sustainable growth and competitive advantage. Potential investments are assessed through a risk-reward matrix and subject

to extensive screening. Norvestor takes a structured approach to promoting sustainable business practices by first establishing a baseline of the portfolio company’s footprint. The fund manager then collaborates with portfolio companies to identify methods of reducing carbon emissions and amplifying positive contributions to people and the planet. Ongoing monitoring and transparent disclosures ensure all investments continue to contribute to the SDGs. It forges partnerships with portfolio companies to fuel growth over a three- to six-year holding period. Norvestor has

completed six successful exits in recent times, including four investments averaging a nearly fivefold gross multiple of invested capital. Over the past year, the firm has worked with portfolio companies to implement over 100 priority projects designed to deliver outsized ESG impacts alongside business benefits. Norvestor companies continue to chip away at carbon intensity, now down half from 2018 levels. The judging panel recognises the ongoing efforts of Norvestor — a repeat programme winner — with the 2022 award for Best Sustainable Equity Investor (Nordics).


Toledo Capital levers a decade of experience in wealth management and financial planning. The firm caters to high-net-worth individuals, tailoring solutions to cover their needs & long-term financial objectives. It is one of the few multi-family offices fully regulated by the Swiss Financial Market

Supervisory Authority (FINMA) and one of the first to offer to their clients access to a unique operating Investment Ecosystem with their Real Estate and Innovation scouting group companies. Toledo’s ecosystem introduces its clients to exclusive private deals, giving them the opportunity of diversifying their portfolio.

Thanks to their professional approach to wealth management & financial planning, Toledo has been able to maintain their clients trust for more than 10 years. The judging panel presents repeat winner Toledo Capital with the 2022 award for Best Financial Planning Solutions (Switzerland).

Since its launch in 1950, Byblos Bank has evolved to consistently meet and exceed client expectations. The group is headquartered in Lebanon, where it has an expansive branch network in addition to a firm foothold in countries across Asia, Africa and Europe. The group levers its status as a trade finance bank in a niche market, allowing Byblos Bank Europe to extract insights and react with decisive speed. Byblos has been dealing with emerging markets for decades and is familiar with their inner

workings. It has been a consistent partner for clients seeking to capitalise on the opportunities and mitigate the challenges present across these markets. The bank combines digital capabilities with human capital to provide clients with the highest levels of customer service and product innovation. Bank representatives are available seven days a week and can be contacted by phone at customers’ convenience. Byblos Bank Europe is an international organisation that forms an integral part of the group. The bank

pulls from its wide knowledge and in-depth experience in emerging markets to facilitate the trade flow of clients both in and out of Asia, Africa and the Middle East. With Byblos Bank Europe and its network of trusted correspondent banks worldwide, business clients can expand their operations beyond borders to compete in the global arena. The judging panel presents repeat winner Byblos Bank Europe with the 2022 award for Best International Trade Finance Bank (Europe).

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The customer-centric focus of FWU Group is underscored in its name: Forward You. Since its launch in 1983, the life insurer has operated according to the values of a family-run company and fuelled development with progressive agility. It’s a tech-enabled company with people at its heart, from its dedicated staff to the million customers it serves worldwide. The Munich-based company has established a presence in Europe, the Middle East and Far East Asia. FWU approached the challenges of Covid as an opportunity for improved customer service. It implemented tech upgrades for better customer engagement and regulatory compliance. Rather than wait for new regulations to come out, FWU anticipates changes to consistently remain ahead of compliance

headwinds. The group has retired all paper-based applications, and now 40 percent of insurance sales are conducted through digital channels. The enhanced customer experience has boosted sales results. FWU is never content to rest on its laurels and goes through extensive testing before introducing new products. The FWU team takes the time to understand customers’ wants and fears to match products to their needs. The product line is structured for transparency and long-term solutions. FWU adapts its datadriven “Quant” investment approach into suitable strategies for each client’s risk profile and preferences. The judging panel presents repeat winner FWU Group with the 2022 award for Best Long-Term Savings Solutions (Europe).


As suggested by the name, Worthwhile Capital Partners only pursues investments that deliver worthwhile impact, and the firm rejects opportunities that do not align with its ethos. The firm believes in the transformational power which connects institutional capital with sustainable investment opportunities that support our planet, society and economy. Of the 60 fund managers that approached the firm in 2022, 95 percent did not pass the firm’s due diligence process for risk, return and sustainability. Worthwhile Capital Partners is not interested in opportunistic solutions; it seeks to partner with fund managers who are fully committed to protecting and preserving the planet. Impact targets must be identified, monitored, measured, and reported back to investors. Worthwhile Capital Partners’ hard-line sustainability focus and thematically identified investment thesis have helped build a reputable brand in short time and most of the managers that

the firm represents come from the US, Australia and Europe. Since its launch in 2018, this winner has raised $1.2bn for renewable energy investing, avoiding more than 50 million tons of CO2 emissions. The team has been particularly successful in supporting fund manager first closes, where it has dominated capital commitments, driving momentum for the remainder of the fundraising period. The firm’s strengths are its independence, thematic approach, and convictionbased selection of partners, and it supports its investor base with thematic research. Worthwhile Capital Partners is just as proud of its selection of sustainable investment strategies as its wellrounded workforce and highly-focused recruitment process. The judging panel congratulates Worthwhile Capital Partners – a previous programme winner – on claiming the 2022 award for Best ESG Specialist Fund Solutions (Europe).


Kathrein Privatbank has undergone several rebranding and restructuring transitions over its 98-year legacy, but its focus on innovation and exceptional customer service has never waivered. The renowned Austrian bank was founded by Carl Kathrein and has maintained the same headquarters since its inception. Apart from being one Austria’s oldest private banks, it’s also one of the most exclusive. Kathrein Privatbank caters to affluent clientele and takes a partnership approach to help them achieve their dreams. The bank recruits top talent and works with industry experts to ensure clients’ needs are never left unresolved. Customised solutions are the gold standard at Kathrein Privatbank, which specialises in wealth management solutions for high-net-worth individuals, family offices, private foundations, institutional investors and corporate

clients. Over the past decade, the bank has pursued increasingly ambitious sustainability targets. Kathrein Privatbank has found that sustainable investments can provide attractive returns while also actively shaping a better future. The bank structures its sustainable funds according to international standards, quality certifications and exclusion criteria. It enjoys crunching the numbers — but is even more interested in the story behind each client’s values and ambitions. Kathrein Privatbank takes a holistic approach to understand clients’ personal goals and then tailors solutions to fit. The judging panel has followed the bank’s progress for several years and continues to be impressed with the level of customised care it provides. The judges declare Kathrein Privatbank as the 2022 award winner for Best Private Bank (Austria).

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MAX Burger, a popular brand established in Sweden in 1968, was the first fast-food chain to label and compensate for its environmental impact. From land usage to customers’ travel, the company estimates it’s responsible for the emission of 29,000 tons of carbon dioxide equivalents (CO2e) each year. Unlike most fast-food chains, MAX has stepped up to the plate and become part of the solution. It has been labelling products with climate impact summaries since 2008, giving clients food for thought at order time and raising awareness with

every meal served. It began planting trees in Africa a decade ago and has managed to offset its carbon footprint through a reforestation project including more than 700,000 trees. It follows the world’s only independent standard for carbon neutrality — ISO 14021 — and has verified the impact of the offset project through a third-party review to ensure its calculations meet the international protocol for greenhouse gases. MAX Burgers goes beyond the industry standard requirements and has been offsetting 110 percent of its emissions to achieve climate

positivity since 2018. It has received praise from customers and international awards agencies for its plant-based burgers. MAX Burger was the only European company to be recognised by the UN in the 2019 Global Climate Action initiative. The family-owned franchise shows there is profitability in sustainability and hopes to inspire more companies to become climate positive. The judging panel presents MAX Burger, a repeat programme winner, with the 2022 award for Best Sustainable Restaurant Chain (Europe).


Over the past three decades, C-Quadrat (CQ) Investment Group has earned a pioneering reputation for its quantitative asset management and ESGdriven investments. The group has also begun to make a name for itself as a conscientious manager of pension funds and alternative investments. The Vienna-headquartered group has an active presence in 21 countries and distributes products to institutional clients through wholesale channels in various markets. The group’s cofounder and CEO, Alexander Schütz, views responsible investing less as a competition

and more of a mindset. CQ Investment Group has been setting up educational programmes in orphanages over the past 20 years. Once the programmes are in place, the group passes them to local organisations to operate. The group takes pride in its track record of commercial successes — and satisfaction in fulfilling its goal of giving back to society. The group is among the most socially active investment managers worldwide thanks to its role as a pioneer in the field of microfinance funds, ESG investment solutions and social activities in the area of support for

children and young people from socially and economically disadvantaged backgrounds or regions. CQ Investment Group’s funds, products and strategies consistently rank among the best of their respective asset classes. When the firm first launched, it introduced Austria to a higher calibre of investment products than was previously available, bringing in big names like Morgan Stanley and Meryl Lynch. The judging panel announces CQ Investment Group as the 2022 global award winner for Outstanding Contribution to Social Improvement.

Uncertainty is a constant challenge in today’s world, but diversified fund management can smooth investment performance when financial markets get volatile. Architas is a specialist multi-manager, offering investment funds which combine a broad range of asset classes, with a view to achieving this safety net of diversification. With a focus on long term investing, Architas aims to support clients in volatile markets. In addition, Architas is committed to ESG integration within their

investment process and demonstrates an ongoing commitment to sustainable investing with the launch of sustainability focussed funds. Architas is an independent fund manager, but also part of the AXA group, a multinational insurance and investment company with a presence in 50 countries and a long-held belief in sustainable investing. This allows them to take advantage of the size and scale of the AXA group, whilst still being agile to quickly take advantage of opportunities

they see. Architas was established in 2008 and, with headquarters in London, now has operations across Europe and Asia. Architas oversees €28.6bn in AUM, helping individuals and institutions to achieve their financial goals through an investment process that’s geared to benefit clients and the wider community over the long term.

The judging panel announces Architas as the 2022 award winner for Best Multi-Manager Investment Solutions (Europe).

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Considering that global maritime shipping accounts for up to 90 percent of international trade volume, specialised insurance solutions are crucial to protect against disasters and disruptions. First Marine Insurance was founded in 2011 to provide ship owners, charterers and operators with peace of mind. First Marine Insurance has established a strong foothold in the Mediterranean, with offices in Athens, Genova and Monte Carlo. The company’s late president, Pier Luigi Ferrari, pioneered Protection and Indemnity (P&I) insurance in Italy more than 60 years ago. First Marine Insurance takes a partnership approach to tailor services to clients’ needs and protect their interests. This partnership mindset extends to staff as well, with the understanding that first-class service is only achievable with a first-class workforce and knowhow. The company

recruits young trainees from universities and helps shape them into experts. Its training investments allow the company to maintain a buffer zone of qualified human resources to support clients, with new business growing at 20 to 30 percent per year and client retention at nearly 100 percent. The boutique P&I and Hull and Machinery insurers and its clients benefit from a seasoned management team comprising ex-captains, economists and lawyers with deep industry experience and personal connections with CEOs across the insurance sector. The company also produces an annual market report providing in-depth analysis of market-wide loss ratios and projected results of the running year. The judging panel has unanimously selected First Marine Insurance in the 2022 award category of Best Marine Insurance Broker for both Greece and Italy.


Central Bank of Bosnia and Herzegovina (CBBH) has been serving the interests of the country and its citizens over the past 25 years contributing to macroeconomic, monetary and financial stability, providing stability of the domestic currency. More recently, with the commitment of the entire staff led by Governor Senad Softić, Ph.D., it has overcome the pandemic and geopolitical challenges to ensure the stability and convertibility of the domestic currency, keep cash circulating throughout the country and increase foreign exchange reserves. It ended 2021 with the highest foreign exchange reserves ever recorded. New treasury machines aid in checking the authenticity, accuracy and reliability of banknotes.

Transparent communication increases awareness and inspires public trust. During the first year of the pandemic, the CBBH had around 6,000 media releases. It also hosts informal sessions with media professionals and regularly organises

financial education and inclusion initiatives. It outlines the benefits of official remittance channels for the BH diaspora, half of which were relying on unofficial channels that were blocked during the pandemic. The CBBH led the reform of the country's payment transactions system. According to Transparency International's (CPI), for the year 2022, BH took a low rank in Europe. In such an environment, the CBBH has strengthened and improved the compliance function, established independent channels for anonymous reports of nonconformities and corruption, supporting its integrity. Rating agencies refer to the CBBH as an important economic anchor in the country, with activities and policies that align with global best practices.

The judging panel announces CBBH as the award winner in two categories: Best Central Bank Governance (CEE 2022) and Outstanding Contribution to Economic Development (Bosnia & Herzegovina 2022).


Founded in 2013, Pollen Street Capital is a progressive entrepreneurial partner leading a transformation in financial and business services. Pollen Street is a purpose-led alternative asset manager that has embedded ESG data as a strategic source for impact propositions. The firm is a pioneer of diversity, equality and inclusion (DE&I). Lindsey McMurray, the firm’s managing partner, was recognised as a diversity champion of 2021, and Pollen Street has received high commendation for championing women’s equality. Over a quarter of the executive committee for the private equity portfolio are women. Pollen Street’s second internal DE&I survey shows that 64 percent of the firm’s employees are state-educated, and 17 percent come from ethnic minorities. Active management and engagement have spurred the

average portfolio gender pay gap to decrease by 6 percent. Over the past 12 months, Pollen Street Capital has expanded ESG data collection and developed a proprietary scoring mechanism to ensure it’s better equipped to track and build on positive impacts. The ESG data model allows the Pollen Street team to rank and score investments using 50 data points from each portfolio company. The scoring system helps the team set targets, measure progress and design improvement plans. All of its portfolio is addressing ESG concerns at the board level and 40 percent have formulated net-zero or carbonneutral commitments. The judging panel presents Pollen Street Capital — a repeat programme winner — with the 2023 award for Best Responsible Alternative Investment Team (UK).

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Since its launch in 2012, Appian Capital Advisory has been investing in Metals and Mining operations and related infrastructure that support the green energy transition such as copper, nickel and rare earths. Headquartered in London, but with offices globally, the firm has helped its portfolio companies and local stakeholders develop 8 assets into production in the last 4 years alone. Appian's strategic vision revolves around ESG from an end product perspective as well as a social license to operate perspective. Appian considers the social and environmental impacts of all potential investment projects as

part of a 360-degree due diligence process to create shared benefits with host communities.

At present, there are three active mining operations, extracting nickel, copper and cobalt from two sites in Brazil and one in West Africa.

The firm manages two equity funds and has eight international locations, alongside US$2bn in assets under management, including co-investment. Appian has created 4,650 jobs directly and over 11,000 indirectly. Its workforce is 16 percent female with 85 percent of employees recruited locally. In 2019, the company’s philanthropic arm, Appian Way

Charity Foundation (AWCF), decided to focus on educational projects that would deliver the greatest impact per dollar spent. The AWCF approved a US$1.7m budget to implement teacher training programmes expected to benefit 120 teachers and 8,000 students. It also donated US $25,000 to the Young Mining Professionals Scholarship Fund to support post-secondary and post-graduate studies in the field. The judging panel announces Appian Capital Advisory as the 2022 global award winner for Best ESG Mining Investment Strategy.


Wesco International pulls from a 100-year legacy to build, connect, power and protect the world. The company was established as the distribution arm of the Westinghouse Electric and Manufacturing Corporation, bringing lighting and electrical products to municipal and business clients across the US. Consumer products were introduced in the 1940s while the following decades marked a period of institutional evolution. The separation of WESCO from Westinghouse in 1993 signalled a turning point in the development of the company. Between 1994 and 1999, Wesco completed several corporate acquisitions and

in 1999 the company became publicly traded. In 2020, it acquired Anixter, an industry leader with complimentary capabilities in data communications, security, wire and cable. The Anixter acquisition was a transformational move that expanded Wesco’s global footprint and unlocked new possibilities along the value chain. Today, the new Wesco has emerged as number 200 on The Fortune 500™, with $20bn in annual revenue. Wesco now has more than 18,000 employees in 53 countries and nearly 1.5 million products in the lineup. It continues to fuel growth by focusing on sustainability and a customer-centric business

model. As a responsible corporate citizen, Wesco aims to contribute to a more sustainable future through ESG-focused operations and initiatives. It engages with supplier partners to implement increasingly ambitious sustainability standards. In 2021, Wesco achieved a 23 percent reduction in the intensity of greenhouse gas emissions and a three percent improvement in fuel efficiency. It made Bloomberg’s Gender-Equality Index again and was recognised by Barron’s as one of The World’s Most Sustainable Companies. The judging panel congratulates Wesco International, the 2022 award winner for Best Sustainable Supply Chain Strategy (US).

PGM Global is a boutique investment firm with headquarters in Montreal and an office in New York. It specialises in securities trading, transition management and global macro research. PGM Global runs its trading desk day and night throughout the workweek, reaching $78bn in annual trade volume. PGM’s transition management service brings all investment types — equities, fixed income and currency — across its trading desk. The firm assists clients to update the structure of their portfolios in the most efficient and cost-effective manner possible. It

conducts an exhaustive pre-transition analysis to chart a smart trading strategy, with special attention paid to managing the opportunity cost. It helps clients save time and money through competitive commissions, strategic executions, coordinated custodial communication and wellmanaged risk exposures. It settles transition trades with prompt efficiency and offers flexiblereporting options that promote transparency and reduced operational risks. PGM’s transition management projects increased more than 40 percent over the previous year. The firm

continues to add new clients from around the globe. In 2022, PGM Global helped clients make small tweaks and wholesome changes to their portfolios as well as trimming when necessary. PGM Global first registered on the radar in 2019, earning praise from the judging panel for its transparent pricing schedule and conflictfree executions. The company continues to find favour in the awards programme, as the jury has unanimously voted for PGM Global in the category of Best Transition Management Team (North America, 2022).

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There’s no broad-brush approach to wealth management, which is why JP Morgan experts pay attention to one-on-one relationships, creating bespoke strategies with each customer’s requirements in mind. The New York-based multinational investment bank prides itself on its ability to tailor specific wealth planning schemes, drawn up using the expertise of staff, and the company’s long experience in the field, serving some of the country’s wealthiest individuals and families. The company’s wealth planning experts take a 360 degree view of each client’s finances, understanding that their needs are likely to evolve. JP Morgan specialists are skilled in helping customers navigate major events, no matter how quickly they arise. One area - sustainable investing, involving Environmental, Social and Governance (ESG) criteria - is currently soaring in popularity. Some sceptics

suggest that investors risk sacrificing returns by investing sustainably. JP Morgan disagrees - the company believes sustainable investing has the power to both drive long term growth, and have a positive environmental impact. The company’s experts judge that sustainable investing helps identify businesses which display quality growth and offer higher profitability. JP Morgan insight teams report many examples of this trend. More companies, for instance, are tying executive compensation to ESG initiatives. JP Morgan monitoring teams also note that shareholders are increasingly forcing climate change issues up the agenda, demanding that environmental issues are tackled. Adding to the company’s impressive awards tally, the judging panel in 2022 is pleased to present JP Morgan with the award, Best Wealth Planning Services United States.


La Trobe Financial takes pride in a well-earned reputation for strong portfolio performance.

The Australian firm has refined its signature approach over seven decades of institutional and retail experience. As a diversified credit asset specialist, La Trobe Financial serves clients primarily through its two complimentary business segments: investments and loans. The Asset Management segment of La Trobe Financial is responsible for $8.5bn of the Group’s $15bn in AUM — and, since its inception, has never lost a single cent in pooled offerings. The firm stands in a class of its own, with a track record of impeccable performance driven by a team of committed investment experts. The team takes a bottom-up approach to investor relationships, providing them with deep insights and transparent portfolio management. The

firm’s CEO, Chris Andrews, sets the tone for the team, reminding them of the sacrosanct pact with their clients: “Everything we do is predicated on the fact that we are managing other people’s money, we are trusted stewards of people’s futures.” As such, the team tends to build granular pools that lend themselves to a built-in conservatism. This strategy has proven successful across economic cycles. Despite the pandemic-induced volatility in financial markets, La Trobe Financial achieved strong results. It has carefully navigated the uncertainty of the past 12 months and feels confident that its portfolios can withstand the market volatility caused by current conflicts and inflationary pressures. The judging panel presents La Trobe Financial — a repeat winner — with the 2022 Best Investment Management Team (Australia) award.


PGM Global brings over 50 years of experience in the securities industry to help clients master international markets. It has established a homebase in North America, with headquarters in Montreal and an office in New York, but its reach and expertise extends worldwide. The boutique firm operates a trading desk — 24 hours a day, five days a week, $78bn annual trading volume — that plays a crucial part in the execution of transition management services. It works with institutional investors to execute trading in equities, fixed income and currencies. In addition to trading and transition, the PGM team also specialises in global macro research. The team distils global macro trends into concise trades ideas

tailored to client’s needs. Despite the current economic environment, PGM Global has found 2022 to be an active year with an uptick in projects. Clients appreciate the high calibre and extensive scope of PGM’s research capabilities. The team is travelling more since Covid restrictions have loosened, prospecting internationally for new clientele and establishing touchpoints across its operational sphere. PGM Global strives for excellence in all endeavours and has won the loyalty of its clients — as well as a nod from the judging panel. PGM Global, a repeat programme winner, claims the 2022 award for Best Global Portfolio Strategy Team (North America).

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Nazca was created for entrepreneurs by entrepreneurs. Since its launch in 2014, the VC firm was focused on providing Latin American founders with the funding, networking and knowledge sharing to propel their business forward. It targets bold leaders with techenabled business models in fintech, mobility, education, health, e-commerce, among others. Nazca walks hand-in-hand with start-ups as they seek to scale, providing early-stage capital, guidance and an environment conductive to growth. The fund manager aims to uplift

entrepreneurs while laying the groundwork for tech-enabled ecosystem in Latin America. Nazca’s investments generate meaningful impact in most Latin American countries, such as Mexico, Peru, Chile, Colombia and Argentina. The IFC announced a $10m equity investment in Nazca’s second fund in July 2020 and a $15m investment in its third fund in June 2022. The Nazca III fund surpassed its target size of $150m. Nazca refers to IFC’s recurrent backing as a catalyst for the transformation of industries across Latin

America. It has embraced ESG from the onset, and the companies in its portfolio share that same passion. One of its start-ups is tackling private- and public- sector problems using data science. Others are addressing last-mile logistics, circular economies, carbon credits, ondemand learning, smart mobility and financial inclusion. The judging panel – inspired by the firm’s values system and success stories – announces Nazca as the 2022 award winner for the Best ESG Transformative Technology Investment Team (Latin America).


PPS Portfolio Performance launched in 1996, bringing to market the first Brazil-made software for investment fund analysis. It has been finetuning metrics and tech capabilities for decades, and periodic upgrades have unlocked new levels of analytical power with each iteration. The proprietary software, which is currently in its eighth edition, provides a quantitative performance evaluation. The company’s technical prowess is complemented by a team of experienced investment professionals who oversee qualitative assessments and conduct

due diligence. PPS Portfolio Performance works primarily with institutional investors of pension funds as well as a selection of insurance companies and corporations. It prevents conflicts of interest by remaining independent of banks and financial institutions. It offers unbiased consultancy of fund performance as well as support services in regulatory compliance, asset liability management, internal controls and professional training. A long-standing partnership with a North American consultancy has resulted in international insights and an

established presence in global markets. PPS Portfolio Performance has earned the trust of its customers, as evidenced by continued repeat business and a 10 percent increase in the client base over the past year. The workforce also grew by 20 percent from 2021 to 2022. The company counts its clients as its greatest asset and tailors services to their needs. PPS Portfolio Performance has placed in the awards programme for five consecutive years, most recently claiming the 2022 award for Best Investment Services for Pension Funds (Brazil).

Active Capital Reinsurance (Active Re) is celebrating 15 years of fruitful operations based on strong ethical principles, global partnerships and client allyship. The insurance and reinsurance company is headquartered in Barbados with business development offices in Miami, Panama City and Madrid. The company’s founder, Juan Antonio Niño Pulgar, leads with the belief that businesses thrive when they turn customers into allies and ensure benefits are shared by all. The company has developed a specialised portfolio of solutions

covering affinity, property, engineering, energy, marine hull & cargo, credit & surety, liability and alternative risk transfer. Active Re deployes a skilled and strategically located workforce — encompassing more than 50 reps and nine languages — to serve insurance companies and reinsurance brokers in over 112 countries. The company is reaping the benefits of a diversification and globalisation campaign that began in 2015 and continued to unlock new markets and distribution lines over the next five years. It now offers services in Latin America,

the Middle East, Eastern Europe, Asia Pacific and North Africa. Its underwriting capabilities and financial strength are underscored by the positive outlook affirmed by the international credit rating agency, AM BEST. Active Re first registered on the radar in 2018, and the judging panel has consistently commented on its upward momentum since then. The jury reaffirms Active Re’s champion status in 2022 for dual awards in the categories of Best Specialised Reinsurance Solutions (Global) and Best Reinsurer (Emerging Markets).

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IBM was an early adopter of the principle of shareholder engagement. As early as 2005, long before the term was in general use, the world’s longest-established tech company had developed sophisticated and ground-breaking proxy season engagement strategies. In the following years the company turned its attention to developing its off-season engagement approach. Teams regularly meet with investors across the whole year, and feedback from these meetings is carefully scrutinised to ensure response is up-to-the-minute. IBM teams constantly monitor investor trends, seeking out developments across a range of topics. An illustration of the company’s determination to stay at the cutting edge is its focus on the transformational importance of 21st century technologies – hybrid cloud and AI. IBM has updated its client engagement model


to ensure opportunities in these areas are understood by clients and staff alike. The company, which employs 350,000 people across 170 countries, places significant emphasis on the continual training of staff to ensure all are up-to-date with latest developments. The company’s aim is to embed a client-centric culture, using its range of hardware, software and consulting experience to find solutions to business challenges. In its 111 years in business IBM has come a long way from the production of time clocks and punch card machines, but its focus on reinvention has remained constant. The company has picked up five separate awards since 2019, including in this category in 2021. The judges have no hesitation in presenting the company with the 2022 award, Best Shareholder Engagement United States.




Since its launch in 2009, Al Hilal Life has evolved into one of the first-choice providers for protection and savings solutions in the Middle East. In the past, 90 percent of the insurer’s business came from bank branches. But recent efforts into diversification and digitalisation have allowed Al Hilal Life to increase business from direct sales and brokers to 30 percent of the total volume. It has achieved impressive organic growth over the 2021-22 financial year, in part due to the company’s growing online capabilities. Clients appreciate the convenience of perusing and purchasing insurance products online. Al Hilal Life recently introduced a paperless tablet format to further streamline the process. Al Hilal Life slashed the lengthy processing times typical with traditional insurers when


it became the first in Bahrain to allow customers to open and digitally sign an online application. More and more leads are coming through digital channels now, which has doubled the productivity of its financial planning team. The company has developed a robust product suite that caters to the needs of locals and expats alike, consistently launching products that appeal to people from all walks of life. Al Hilal Life offers Shariahcompliant products and is licensed by the Central Bank of Bahrain. The judging panel has followed the company’s progress for years and is pleased to note that it continues on a course of constant innovation. Al Hilal Life claims the 2022 award for Best Life Insurance Provider (Middle East).


Old Mutual Investment Group believes in investing for a future that matters. The pandemic has proven that economic, environmental and social systems are interconnected. Old Mutual Investment Group aims to deliver sustainable long-term risk-adjusted returns for clients while also creating positive impacts on communities and ecosystems. It integrates material ESG issues across the investment process, using quantitative and qualitative analysis from internal and external sources to conduct a proprietary assessment. The company has five dedicated responsible investment professionals and 20 ESG research analysts collaborating on 161 actively managed portfolios. Old Mutual Investment Group is committed to helping clients build wealth while also building for a better future. Old Mutual Investment Group has spearheaded the

development of ESG-focused investment products in South Africa. It offers a selection of investment products designed to deliver green economy outcomes. South Africa is a carbon-intensive country, still heavily dependent on coal. Old Mutual Investment Group has begun to explore cleaner alternatives to power the country, and the infrastructure is already prepared to switch from fossil fuels to renewables. The company forms part of Old Mutual Limited, a group with a 177year history in South Africa. Its growing reputation as an ESG champion has attracted new talent: young professionals with a passion for positive change and the drive to make a difference. The judging panel congratulates Old Mutual Investment Group — a repeat programme winner — on claiming the 2022 award for Best ESG Responsible Investor (Africa).

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GCC 2022

Qatar Insurance Company (QIC) was founded in 1964 as the country’s first domestic insurer. Now it’s reshaping the regional landscape by pioneering customer-centric, digital-first capabilities. The group employs 700 professionals from 54 countries. QIC has solidified its status as the digital giant of regional insurers, with a 240-person team dedicated to ushering in a new age of connectivity through the integration of banking and fintech partnerships. QIC’s comprehensive online platform allows clients to buy and renew insurance policies within a

few clicks and a couple of minutes. QIC has earned top marks for stability from international rating agencies, making it one of the most highly trusted insurance companies in the Gulf region. In 2021, the QIC group reported excellent performance in terms of profitability, diversification and investments. Gross written premiums reached $3.5bn (12.6bn QAR) and net profit was up by 400 percent over 2020. The group’s diversified portfolio covers profitable sectors across the globe: insurance, reinsurance, corporate ventures, business

acceleration and real estate. QIC’s wholly owned subsidiary Epicure Investment Management is among the country’s largest regulated investment firms, managing over $7bn in equities, fixed income and real estate assets for its clients. Innovation and digitalisation have played a key role in the strategic direction of the company — and will continue to do so in the future. The judging panel has found Qatar Insurance Company as the award winner for the second consecutive year in the category of Best Insurance Leadership (GCC, 2022).

Kuwait International Bank (KIB) is a public quoted company with a 49-year legacy of supporting the economic development of its clients and the country. It has been operating according to Sharia principles for more than 15 years. The bank recently released financial reports for the first nine months of 2022, achieving the equivalent of $151.9m in operating revenue and $12.9m in net profits. KIB delivers high-quality, innovative services across all its business lines: retail banking, real estate

and corporate banking. The bank pursues long-term sustainable growth through the continuous reinforcement of its financial core, operational model and technical infrastructure. It’s a modern bank with regular roll-outs of new products to meet the changing needs of society. It launched a Sharia-compliant Dirwaza savings account, based on Wakala investment, that distributes monthly profits to customers, in addition to cash prize drawings throughout the year. It also introduced two new subsidiaries

this year. KIB Mubader Centre is dedicated to the country’s entrepreneurship segment, while Innovotech Centre will serve as the technology arm of the bank. KIB is one of the longestreigning champions in the awards programmes and has been recognised in each of the past eight years. The judging panel announces Kuwait International Bank as the winner in two award categories for 2022: Best Banking Vision (MENA) and Best ShariaCompliant Bank (MENA).

BIAT (Banque Internationale Arabe de Tunisie) aspires to be more than a bank by anchoring development through the lens of corporate and social responsibility. Since its establishment in 1976, BIAT has evolved into the leading bank of Tunisia by focusing on superior services for individuals, entrepreneurs and companies at home and abroad. It is committed to delivering socio-economic impacts for the local population as well as Tunisia’s diaspora community. BIAT activities lay the foundation for a more united and sustainable society at every level.

The bank has proven itself a reliable partner of SMEs, corporate clients and government institutions by offering solutions and assistance to cope with rising inflation and persistent Covid complications. Despite the ongoing global challenges, BIAT has achieved continued growth in general and is expecting positive results moving forward. The bank credits its adaptability and experienced workforce as key factors to its success. A strong governance structure helps the bank deliver on promises to BIAT’s stakeholders. It follows international best practices to ensure

transparency and foster innovation. BIAT established a charitable foundation in 2014 that aims to arm Tunisian young people with the entrepreneurial skills to excel. In February 2022, it launched the second edition of a competition in multidisciplinary entrepreneurship between university institutions. The judging panel has followed the bank’s progress for several years and has been consistently impressed with its progress. The jury presents BIAT — a repeat programme winner — with the 2022 Best Bank Governance (Tunisia) award.

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Over the past two decades, Ventures Middle East has successfully completed more than 1,000 projects and achieved a client retention rate of 92 percent. The consultancy was founded by a threeperson team; now it has over 200 employees with experience and expertise covering more than 20 industries. Ventures Middle East is a client-centric company with a can-do attitude. No project is too big or too small to benefit from its research and consultancy capabilities. It has established a strong presence across the Middle East and North Africa (MENA), bringing international know-how to local markets. Ventures Middle East has attracted a multicultural workforce, representing 50 nationalities and eight languages, all united behind the company’s core values of objectivity, integrity, excellence, collaboration, innovation and resilience. Ventures Middle

East helps clients achieve a competitive edge with customised analysis and strategic insights across industries and sectors. Advisory services cover the gamut of industry analysis, market reports, competitor assessments and market sizing. It provides assistance with investment management, helping clients to identify opportunities and mitigate risks. It can give businesses an overview of customers’ experience, including engagement and satisfaction levels across service suites and marketing campaigns. It can guide clients through digital transformation, set up internal business units for shared services and implement strategies for optimised operational performance and more efficient supply chains. It’s also an expert head-hunter. The judging panel announces Ventures Middle East as the 2022 award winner for Best Strategic Business Advisory Services (MENA).


Metito, a pioneer in the water industry, boasts 65 years of history and 4,500 employees at 20 international offices. The company has experience in 50 countries and a portfolio of over 3,000 projects. Founded in 1958 in Lebanon, Metito has played an innovative role in the water and wastewater industry. It was the first company to introduce the reverse osmosis technology for desalination outside the US and has brought water and wastewater solutions to countries across the MENA region through public-private partnerships (PPP). Metito has developed its four business lines — design and build, utilities, operation and maintenance, chemical solutions — with a focus on impact and sustainability. It aims to kickstart the circular economy by partnering with governments, industries and communities to

implement intelligent management solutions across the entire water treatment value chain. It relies on high-value engineering capabilities to hasten the smart water ecosystem of the future. It integrates cuttingedge technologies to reduce freshwater and energy use as well as recover nutrients and materials in a carbon-free, sustainable hydrological cycle. Metito has placed in the awards programme numerous times, and over the past year, has achieved more milestones to warrant the attention of the judging panel. It built the world’s first and largest floating desalination barge for Saudi Arabia and has also secured new PPP contracts for projects in Qatar, the UAE, Serbia and Uzbekistan. The judging panel crowns Metito with the 2022 global award for Most Impactful Water Company.


BIAT (Banque Internationale Arabe de Tunisie) has established a nationwide footprint with 206 strategically located agencies and nearly 2,000 employees to look after client needs. BIAT is a universal bank that forms part of a group with subsidiaries in the fields of insurance, asset management, investment capital, stock market intermediation and consulting. It offers a broad range of products and services for individual, entrepreneurial, SME, corporate and institutional clients. BIAT’s reorganisation of its corporate and investment banking activities has broadened the service suite while enhancing real-time management of positions and customer assets. The bank invests in technical and human resources to make qualitative improvements while building on past achievements. BIAT embarked on a digital transformation four years

ago that continues to pay dividends in terms of customer engagement and product innovation. It is constantly rolling out new features with the aim of becoming a benchmark digital bank and playing a catalytic role in the country’s digital transformation. MyBIAT consolidates the bank’s digital offerings in one streamlined service, enabling clients to access products, accounts, cards and credits within a few clicks. In July 2022, it introduced biometric login and push notification for the mobile app. Customers can use MyBIAT to load prepaid currency cards, monitor credit details, manage outgoing transfers and update travel assistance certificates. As a repeat programme winner, the jury is familiar with the bank’s inspiring legacy — and its bright future. BIAT claims the 2022 award for Best Digitalisation (North Africa).

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From its Nigerian roots, Continental Reinsurance has evolved over the past three decades into a truly pan-African player. Since its launch in 1985, the company has become one of the few African reinsurers with the resources and skills to challenge the multinationals operating on the continent. The history of Continental Reinsurance is marked by strong corporate governance and international best practices and always with a key focus on innovation. The reinsurer’s commitment to above-board operational standards has proven fundamental in attracting capital from international investors, including some prominent

names from South Africa and America. Continental Reinsurance has earned the trust of its clients as well as the market. It is benchmarked against the highest international standards and has achieved the “AM Best” rating for 13 years. The reinsurer has an AM Best Financial Security Rating of B+, and a Long-Term Issuer Credit rating of BBB-, which is a couple of notches above the Sovereign rating of Nigeria. Continental Reinsurance credits its success to the calibre of its people, who bring unmatched experience and strength to the team. Together, they have built a formidable entity with a diverse portfolio and far-reaching ambitions. It

has six offices and several specialist subsidiaries located across the continent. The portfolio spans more than 50 countries and features a mix of relevant product focus areas, including large Commercial, Industrial, Engineering, Energy and other property installations, infrastructure development, and Agriculture, to support Africa’s food security. The company leads by example on ESG issues and strives to deliver sustainable value to shareholders and stakeholders alike. The judging panel announces Continental Reinsurance PLC as the 2022 award winner for Most Innovative Reinsurer (Africa).


Société Générale Guinée (SG Guinea) — one of the oldest private banks in the country — began serving the Guinean population just 27 years after the nation gained independence. It was created in 1985 as a subsidiary of Societe Generale, a group with a 158-year legacy and 32 million customers in 76 countries. The bank contributes to the benchmark status of its parent company by embracing the values of commitment, responsibility, team spirit and innovation. SG Guinea levers a capital position composed of international and local shareholders to

fuel the economic development of the individuals, entrepreneurs, companies and associations that make up its client base. The bank has established itself as a leader in the credit market as well as corporate and retail banking. The values-driven team eschews the short-sighted, profits-crazed strategies favoured by lesser banks by focusing on becoming a powerhouse in the development of human capital. Socio-economic development is the primary role and ambition of SG Guinea. In 2022, the bank turned its attention to address

the knock-down effects of the crisis deriving from the Russo-Ukraine war. SG Guinea will inaugurate new headquarters soon, underscoring the permanence of its commitment to the region, its people and their financial stability. The CFI. co judging panel has recognised the bank in past awards programmes and is pleased to note that it continues to pursue the mandate of growing with Africa. SG Guinea claims the 2022 awards for Best Business Bank and Best Corporate Banking Team (Guinea).


Zambian Home Loans (ZHL) has a lasersharp focus on the national mortgage market and wherever the diaspora community calls home. The mortgage lender deploys a team of 14 professionals to provide reliable and innovative service for Zambians dreaming of homeownership. It has a developed a product suite that covers every aspect of buying or building a home. It can finance the purchase of land or provide the capital to renovate a home. Unlike most mortgage providers, like commercial banks and building societies, ZHL

maintains an exclusive focus on the mortgage sector. The company differentiates itself from the competition with its lightning-fast decision-making process and loan delivery. It claims to be the only player in Zambia to issue mortgages within five days, whereas the banks typically take around 90 days and its main competitor spends at least three weeks to process an application. The company has several Memorandums of Understanding (MOUs) with building material suppliers. Customers are never obligated to work with

the suppliers covered by the MOUs, but the arrangement allows them to take advantage of highly competitive pricing. ZHL suppliers are paid directly by the company, thus mitigating risks. All clients, whether at home or abroad, can benefit from the relationships that ZHL has established with suppliers, architects and contractors. The judging panel — impressed with the company’s service and speed — has declared Zambian Home Loans as the 2022 award winner for Most Innovative Mortgage Finance Services in Zambia.

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B u i l d Y o u r H o m e T o d a y


Ghana Investment Promotion Centre (GIPC) is defending the country’s favourable FDI status through a concentrated digitalisation campaign that’s enhancing service delivery, promotional exposure and investor engagement.

The Centre currently operates under a law passed in 2013 (GIPC Act 865) to encourage, promote and facilitate investment in the country — and the latest figures from the United Nations Conference on Trade and Development (UNCTAD) prove that it’s hitting the mark. UNCTAD’s 2022 report ranks Ghana as the secondhighest recipient of FDI in West Africa, receiving $2.6bn in 2021. The centre credits the increase in FDI in part to the country’s underlying attractiveness as an investment destination with a resilient economy, business-friendly environment, skilled workforce, and abundant resources. But GIPC’s contributions to the FDI increase can’t be understated.

It has helped investors to register projects and apply for

exemptions online, highlighted investment opportunities across various social media platforms and established an investor aftercare division to provide support for businesses, ensuring seamless integration for investors and business continuity. The centre also prioritizes the SDGs and has collaborated with the UNDP to implement the SDG investor roadmap, which transforms country-level sustainability gaps into private-sector investment opportunities. Meanwhile, Yofi Grant, the Centre's CEO, is serving a second term on the World Association of Investment Promotion Agencies' Steering Board as the Regional Director for Sub-Saharan Africa. In that capacity, he continues to collaborate with key partners to address some of Africa's and the world's most critical concerns, particularly in the areas of investment promotion, FDI attractiveness, and advancing open and free trade. The judging panel confirms GIPC’s fourth-year award win in the category of Best Investment Promotion Agency (Africa 2022).


This year is a special one for Tunis International Bank as it celebrates 40 years of continous growth and sustained success. Founded in June 1982, TIB was the first private, nonresident commercial bank in Tunisia. TIB’s main shareholder is Burgan Bank Kuwait which is a subsidiary of the Kuwait Projects Company (KIPCO): one of the largest holding companies in the MENA region with consolidated assets of $34bn. The bank’s reputation has been firmly established as a local provider of the

highest quality products and services for corporates, financial institutions, governments and individuals both in Tunisia and abroad. TIB has always been an innovative institution, providing a comprehensive range of products and services tailored to customer business needs including: Foreign Exchange and Money Market operations, International Trade Financing, Private Banking Facilities, Corporate Projects Financing, Loan Syndications, Commercial Banking, and Investments.



Mauritius-based MauBank offers tailored services for SME, retail, corporate and international banking clients. Digital transformation investments continue to pay dividends in terms of convenience, security and engagement. MauBank is creating an open banking ecosystem that allows for ongoing integration of third-party partners and products. It supports the shift towards a cashless society by ramping up contactless payments with QR code payment facilities and NFC technology. Nearly half of all active debit cardholders are taking advantage of MauBank’s mobile banking platform, and it aims to increase usage by 40 percent by the end of the 2023 financial year. MauBank has achieved steady growth over the past three years through the prudent management of assets and

liabilities. It reports an increase in after-tax profits of 130 percent from 2021 to 2022, thanks to a campaign of consolidation and reinvention that resulted in reduced operating costs, an uptick in revenue and the liquidity to meet unforeseen challenges. The judging panel was impressed with the bank’s steadfast piloting of pandemic challenges, which was fuelled by a strategic focus on expansion, conquering market shares and product development. The jury applauds the bank’s new green financing scheme to promote renewable energy improvements for individuals and businesses. MauBank — a repeat programme winner — was the champion in two award categories in 2022: Best Digital Transformation in Banking and Best Growth Strategy Banking (Mauritius).

Winter 2022-2023 Issue | Capital Finance International 95


TotalEnergies is a multinational French company created in 1924 — and now driving an energy transformation in 130 countries. In Eurasia, straddling Western Asia and Eastern Europe, TotalEnergies works within company’s climatecentered transformation strategy to deliver affordable, clean energy. The company has a history of supporting national energy resilience by developing oil and gas assets, but it's been pushing to clean up the portfolio. TotalEnergies has been active in Azerbaijan since 1996, primarily through its gas operations. In 2015, TotalEnergies sales were split between approximately 65 percent

petroleum products and 33 percent natural gas. Last year, the energy mix rebalanced at around 44 percent petroleum, 48 percent natural gas, seven percent (mostly) renewable electricity and two percent biomass or hydrogen. The company continues to phase out oil production and is looking to natural gas as an ideal transitional solution in the net-zero journey. TotalEnergies identifies opportunities in international markets, working with government and business partners to boost renewable energy production. Transformational strategies are driven by the SDGs and aligned with climate targets. TotalEnergies


plans to increase renewable energy capacity to 35 gigawatts by 2025 and 100 gigawatts by 2030 globally while TotalEnergies Azerbaijan is focused on development of renewable portfolio in the country. The company is working with the Azerbaijan - France Chamber of Commerce to build a sustainable energy roadmap for the nation and its people. It supports gender equality initiatives and invests considerable resources to educate and promote local talent. The judging panel announces TotalEnergies Azerbaijan as the 2022 award winner for Outstanding Contribution to Sustainable Transformation (Azerbaijan).

Thai Life Insurance continues to build on its 80year legacy as the first public insurance company established by Thai nationals. The company is headquartered in Bangkok and engages with clients through multiple sales channels with 64,000 professional agents. The company is pursuing a 10-year vision that’s underpinned by strong corporate governance and a mandate to create value for all stakeholders. Digitalisation and diversification are key components of its sustainable business model. Thai Life Insurance is ramping up the e-commerce side

of the business to complement the expansive national footprint it has established — now at 260 branches and customer service centres. The insurer prides itself on a fully inclusive strategy that covers all segments of Thai society and brings increasingly innovative products to market. It offers insurance products for every lifestyle and stage of life to provide financial security and stability for Thai families. Insurance plans cover everything from health, life and critical illness to investments, savings and taxes. It trains employees to embrace the

corporate principles of care, compassion and trustworthiness. The company differentiates itself as an insurer that has remained true to its oriental heritage while also adopting the best practices from around the developed world. Thai Life Insurance has earned a AAA rating from Fitch and struck a strategic partnership with a Japanese insurer to expand into new markets and capitalise on fresh opportunities. The judging panel announces Thai Life Insurance as the 2022 award winner for Best Life Insurance Provider (Thailand).

MTR Corporation started out as the Mass Transit Railway provider for Hong Kong, but over the past 47 years, the company has expanded its operational scope and geographic footprint. MTR pursues a “rail-plus-property” business model that has enabled it to create synergies and diversify revenue streams. MTR Corporation leads and coordinates property development, negotiating with governments on greenfield land rights before opening tender packages to partners. MTR oversees the design and construction, while the development partners

typically cover the land premium and development costs. The company now has a global footprint stretching from Hong Kong to the UK, Sweden, Australia and mainland China. MTR’s diversification has proven crucial as waves of Covid variants continue to threaten people’s health and companies’ solvency. The corporation has promised to “ride out the tough times together with the public”. It froze fares for the 2022/23 financial year — just as it has over the past two years. It introduced a fare reduction of 1.85 percent

last year, and has also extended a special fare rebate of 3.8 percent till the first of January, 2023. It’s offering more than $600m worth of fare promotions this year, in addition to the usual $2.2bn in concessions the corporation bears on an annual basis. MTR keeps cities moving by investing in hi-tech innovations, like robot cleaners and smart sensors. The judging panel presents repeat winner MTR Corporation with the 2022 award for Best Public Service Financial Management Team (Hong Kong).

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DATE: THAILIFE 18–03–2021 Printed in 4 colors C100 M 34 Y0 K2 C0 M 95 Y100 K0 C100 M 88 K5
A\W Thai Life Logo MASTER ENG


ID Clear (KPEI) is designated by the Indonesian government to function as a self-regulatory clearing and guarantee institution in collaboration with the national bourse and securities depository. The non-profit is dedicated to the ongoing development of the Indonesian capital and financial markets to ensure safe, efficient, fair and transparent operations. All profits are redirected towards this development mandate. KPEI maintains close contact with regulatory bodies in order to bolster market faith, protect investor interests and guard against systemic risk. These efforts enable the organisation and its clearing members to make the maximum contribution to the Indonesian economy. KPEI’s principal services are centred around the clearing and settlement guarantee of securities — equity, fixed income and futures — exchange transactions. Over the past two

decades, it has marked several milestones that have extended its partnerships and allowed the organisation to deliver other value-added services. It offers clearing services for alternative market trading, securities borrowing and lending, collateral management, as well as guarantee and risk management services. It aims to inspire trust in the Indonesian money market. It accomplishes this objective by always acting with integrity and remaining consistent in words as well as deeds. It promotes open dialogue with clients and addresses their needs with proactive responsiveness. KPEI adheres to prudent risk management principles and fosters a corporate culture of mutual respect and support. The judging panel congratulates KPEI on claiming the 2022 award for Best Exchange Transactions Clearing Services (Southeast Asia).

Varun Beverages Ltd (VBL) pursues ESG leadership as a way of life rather than an exercise in compliance. The company has been associated with PepsiCo for more than two and half decades, continuously expanding its product range, licensed territories, distribution network and ESG commitments. VBL is the leading PepsiCo franchisee in India, with a presence across 27 states and seven union territories. It has established 37 manufacturing plants across India — its principal market and home base — as well as Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe. A strong governance structure unites all operations and employees behind VBL’s commitment to good corporate citizenship. VBL provides refreshing beverages to billions of consumers through a sustainable ecosystem that creates positive impacts for the planet and people’s well-being. The company

INDIA 2022

has established a cross-functional ESG task force composed of executive leadership, advisors, independent directors and various department supervisors. It practices responsible water stewardship and waste management while consistently ramping up renewable energies and reducing carbon emissions. VBL is expanding existing ESG policies throughout its contractor and supplier network. It prioritises the health and safety of employees and manages human capital with a focus on diversity and skills building. CSR initiatives — which promote healthcare, education, environmental sustainability and rural development — are also being assessed for impacts by independent agencies. The judging panel presents Varun Beverages — a repeat programme winner — with the 2022 award for Best FMCG Corporate Governance (India).


Since its launch in 1975, MTR Corporation has shown a penchant for strategic investments at the most opportune moment. From its base in Hong Kong, the multinational company aims to connect communities and foster growth through the provision of caring services and value creation for all stakeholders. MTR (Mass Transit Railway) Corporation invests in technology and infrastructure to support cities of the future. It continues to pursue digital transformation to bring customers smart mobility as well as smart operations and maintenance for better efficiency and environmental benefits, including carbon reductions. It combines these efforts to deliver smart city services to communities through ongoing property projects along railway lines. It partners with tech start-ups at home and abroad to create opportunities for young talent. These

areas of key focus propel the company forward on its mission to keep cities moving. MTR Corporation and MTR Academy (a global training hub for railway management and operation) has announced a Memorandum of Understanding with The Hong Kong Polytechnic University to explore innovative solutions that advance the performance of railway assets, operations and maintenance using smart sensing technology. MTR Corporation collaborates with academia to amplify research impacts. The company has allocated over $38m for investment in startups over the next few years, with more funding reserved for similar projects in the future. The judging panel has unanimously voted for MTR Corporation — a repeat programme winner — in the 2022 global award category for Most Innovative Transport Solutions.

Winter 2022-2023 Issue | Capital Finance International 97

Africa: Moroccan Metropolis Makes its Move to Become a Financial Bridge to Africa

> Inalittleoveradecade,Casablancahasbeentransformedinto aninternationalplayer.

Johannesburg has been dethroned from the north. In just 12 years, Casablanca Finance City has grown from the site of an old airport to become Africa’s new financial gateway.

The Moroccan city is ranked 54th in the Global Financial Centres Index for 2022. It is the highest ranked African centre, 12 spots ahead of Johannesburg and 51 ahead of Nairobi. Casablanca first appeared in the index in 2014, when it was ranked 62nd — 12 spots behind Johannesburg. The lead swapped just one year later, and Casablanca has stayed in front.

It has long been the financial centre of Morocco. Its stock exchange, opened in 1929, is the thirdhighest rated by market capitalisation in Africa, after Johannesburg and Lagos). It is larger than the Egyptian and Nairobi exchanges. It was modernised in 1993, with a central securities depository system introduced in 1996. A futures market came in 2014.

For much of its modern history, Casablanca has looked towards Europe. In the 19th Century, steamships established maritime trade routes with European cities hungry for wool. It was under French occupation until 1956, when a new city was built around the old medina. Casablanca’s port was built in 1912, which further strengthened trade with Europe.

Since 2010, under reforms initiated by King Mohammed VI, Morocco’s attention has pivoted south towards the African continent. Casablanca is looking to become a new financial and investment gateway. It has strong European influences, and at its heart it is Arab and African.

Morocco re-joined the African Union in 2017 after a 33-year hiatus. It has been seeking membership of the Economic Community of West African States.

The Casablanca Finance City (CFC) was established in 2010 in the new Casa Anfa district. The government hoped to recreate the success of the Tangier Free Zone — but this time in the financial arena. Tangier’s Free Zone was established in 2008, and in 2012 was voted the best in the world by Foreign Direct Investment magazine.

The CFC’s goal is to be a gateway for domestic and European investors in sub-Saharan Africa (SSA), particularly western Africa, and a financial centre for greater north-west Africa. It can leverage Morocco’s political stability and its geographic advantages.

The CFC offers a five-year corporate tax “holiday” followed by a reduced rate, reduced income

tax for workers, no limits on the repatriation of foreign exchange, and streamlined regulations and administration, including expedited visas for expats. It has also established itself as the leading green financial centre in Africa with events, seminars, and the issuance of green bonds.

Companies licensed in the CFC operate under Moroccan law and are regulated by the national regulators. The country aims to match those regulations with global best-practice.

The CFC has also signed 21 south-south partnerships, including 18 with African investment promotion agencies. It has also signed partnerships with 15 international financial centres, including Abu Dhabi Global Market in 2019 and Frankfurt Main Finance EV in 2018.

While progress has been slow — the landmark CFC Tower designed by Thomas Mayne was finally opened in 2019 — the CFC has posted some good early returns. Since 2010, it has attracted 53 regional headquarters for MNCs, 48 consulting firms, 24 banks and insurance companies, 20 financial service companies, 11 asset management companies, and eight legal companies. These companies operate in 50 African countries.

Influential tenants include the Bank of China, which is using Casablanca as a staging post for African investment, and the African Development Bank’s $3bn Africa50 Fund, which invests in infrastructure projects across the continent.

Greenfield investments from Casablanca increased from $61m to $5bn in the first five years of the CFC. Around 90 percent of greenfield investments from Morocco between 2010 and 2018 went to SSA. The start of the AfCFTA (African Continental Free Trade Area) should prove a boon to CFC goals.

However, it can do more with regards to fintech and digital finance. It ranks 200th in Findexable’s global rankings, which places it 10th in the continent. Nairobi is highest-ranked at 37th

Lagos is ranked 93rd, Cape Town 97th, and Johannesburg 99th. The CFC has a dedicated space for fintechs and a 2025 strategy to boost growth in the sector, but so far there are only 38 fintech start-ups in Casablanca — and no unicorns among them. With the growth of fintechs across Africa, Casablanca needs to seize the opportunity to integrate and support African finance.

The CFC sits on 100 hectares within the 350-hectare Casa Anfa development, designed to be the city’s new urban centre. It has plans for residential districts, a tram line, a TGV station, and hectares of green space.

Casablanca residents are enjoying this rejuvenation. As the largest city in Morocco — 3.5 million people — it has plenty to offer.

There are green spaces such as Parc de La Ligue Arabe, cafes and beaches of La Corniche, shopping in the Quartier des Habbous or Morocco Mall, modern art in the Villa des Arts, food outlets and stalls in the old market, and the Hassan II Mosque, the second-largest in the world.

The city is 124th on Mercer’s quality-of-living rankings, which puts it six spots ahead of Istanbul, 39 ahead of Dakar, and 53 ahead of Cairo. It is ranked 143 in terms of the cost-of-living.

Casablanca will benefit from the WessalCasablanca Port project, announced in 2014. The project, led by Ithmar Capital, Morocco’s sovereign wealth fund, will transform the old fishing port and shipyards into a residential and tourist districts with a cruise ship terminal.

King Mohammed VI’s vision of transforming Casablanca into a financial gateway for Africa has become reality. It has gone from financial hub to international player. With the launch of AfCFTA and Africa’s projected growth over the next 50 years, Casablanca is well positioned to play a leading role in regional development, particularly as a bridge between north and south. i

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"It has long been the financial centre of Morocco. Its stock exchange, opened in 1929, is the third-highest rated by market capitalisation in Africa, after Johannesburg and Lagos). It is larger than the Egyptian and Nairobi exchanges."
"King Mohammed VI’s vision of transforming Casablanca into a financial gateway for Africa has become reality."

Patience, Perseverance, Service: CEO of Société Générale Guinée

Shares the Secrets of his Career

in conversation with Thierno Ibrahima Diallo, chief executive of Société GénéraleGuinée.

Société Générale Guinée, a subsidiary of the Société Generale Group, is the oldest fully private financial institution in Guinea.

It was established in 1985, and remains one of the country’s main banks, with 23 branches, and 58 ATMs. It has over 300 employees, and advises more than 100,000 clients and customers. What are your hopes for the future of SG Guinea, and for the banking industry as a whole?

TID: My ambition for the future of SG Guinea is to consolidate its position as leader in the Guinean market, to be a bank rich in human capital, innovative in its offer, to deliver quality service to its clients. I would like recognition for that quality of service, and its guarantee of sustainability.

What relevant changes would you like to see made to the legislation or regulation of the banking sector in Guinea?

Regulation is the responsibility of the regulator. The banks represented by the Association Professionnelle des Banques (APB), to which we belong, have a constructive relationship with our regulator (BCRG). We are listened to and our perspective is considered, so things are going in the right direction.

Can you identify the obstacles for the banking sector?

The sector faces the challenges of digitalisation to make its services available to everyone. It’s more a question of innovation, and the adaptation of our offer. It must be remembered that banking needs a clear and protective legal framework to prosper. In Guinea, banks have historically been faced with difficulties in this respect.

This is not the place to comment on the details, but if things remain unchanged, we will not gain the security and serenity expected in our sector.

Do you have any anecdotes to illustrate your progress over the years?

I can just remind you that we have been in Guinea for more than 35 years. We now have more than 300 employees, and 23 agencies; it's a beautiful story that is being written. It has been punctuated by successes and growth that have enabled us to get to this point. In 2023,

we will be inaugurating our headquarters in Guinea, a symbol of a new SG Guinea, firmly rooted in its country and orientated towards the transformations necessary for long-term survival.

How do CSR parameters affect the way you manage the SG Guinea subsidiary?

CSR is one of four pillars under our Grow

With Africa programme. We say to the world: You are the future. These aren’t empty words, but an ambition to actively contribute to the sustainability of our planet. CSR will play an increasingly important role in our activities. This is already the case for all the projects we support, and it will continue so that our activities have a real and visible impact on our environment.

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CEO: Thierno Ibrahima Diallo

What are the medium- and long-term challenges facing your company?

The challenges of our world are those facing our customers. They need a bank that is agile and able to adapt to their lifestyle. We are resolutely in a digital world, which moves fast, and which no longer makes quality of service conditional on physical presence.

We are very attentive to these changes, which are certainly shaking up habits, but moving in the direction of the bank of tomorrow. Day-today transactions must be carried out quickly and electronically, and advice will continue to be given in our sales outlets so that the bank can continue to play its role in financing the country's economy.

What is the most important condition for becoming a global company?

My answer could certainly be supplemented by others, given the different visions that such a question crystallises. I would simply say, adapt to the environments in which you want to evolve.

How do you see the prospects for SG Guinea?

The outlook for SG Guinea will be positive in the short and medium terms. This is the work we are currently doing, consolidating our achievements while making the necessary changes to increase the level of efficiency of our activities. Banking has never been a business for philanthropists, so we will also have to keep a constant eye on profitability.

What excites you about the business world in general?

Mainly the feeling of being of service to people. Our funding and other services should help change people's lives. There is a constant challenge for us to make sense of our lives.

What lessons have you learned from your previous professional experience?

Banking is a business of experience, that's for sure. One is always learning. But I relive situations, where the recipes I learned in my past experiences work perfectly. I’ve learned above all to keep a human approach, to be patient and perseverant. That helps. i | Capital Finance International 103

hen a financial crisis hits, the general view is that innovation will tank. Companies are struggling, funding dries up, and projects get cut.

But Kellogg associate professor of finance Filippo Mezzanotti and his fellow researchers wondered if more nuanced dynamics were at play. Crises might prompt workers and firms to reconsider their longterm objectives, think deeply about which projects are most valuable, or revamp their operations.

While innovation might still drop, other factors “could potentially reduce the overall negative impact”, he says. And perhaps those less obvious trends “are actually what persist as things normalise”.

Mezzanotti and his co-authors focused on the Great Depression, examining patents by inventors and companies during that period. They found a decline in independent inventors’ patents which appeared to be driven by a lack of local funding in counties hard-hit by the economic crisis.

Large companies in those distressed areas weathered the crisis better — and may have benefitted from it. These patterns suggest that independent creative thinkers didn’t vanish; many of them found jobs at firms where they continued to innovate. Independents did dsuffer, Mezzanotti says — but moving to companies may have saved some of their ideas. “Reallocation was an important force,” he says.

The research partly explains why independent inventors no longer play as prominent a role. Today, most of that creative activity happens at firms. While this shift likely may have taken place at some point anyway, the Depression probably kick-started the trend.


Researchers have pointed to technological trends to explain the shift from independent to firm-based inventing. Technologies that became prevalent over the 20th Century required more capital investment and bigger teams, thus favouring companies as hubs of innovation.

Mezzanotti and colleagues, Tania Babina of Columbia University and Asaf Bernstein of the University of Colorado Boulder, didn’t reject the idea. But they wondered how much the Great Depression contributed to the shift.

When they looked at broad trends in patent data during the first half of the 20th Century, they found that the number filed by independent inventors plunged in the 1930s — and didn’t recover. The decline in firms’ patents was much smaller and shorter-lived.

There was a drop across all technologies around the onset of the Depression. If the decline in independent activity was entirely driven by technological trends, the team would have expected to see that at different times, depending on the type of technology. That pattern hinted that “there was potentially more to the story than just the technology story”, Mezzanotti says.

Historical accounts suggested that the Depression made it harder for independent inventors to get funding. Unlike companies, which often got loans from banks, individual inventors usually sought support from local wealthy businessmen, similar to the way that start-ups look for angel investors today. If businessmen had lost money in the crisis, they might have become reluctant to invest in new projects.

Bank loans to companies also probably dried up, but firms could draw on earnings from existing products to get by, Mezzanotti says. Independent inventors who scrounged up money one project at a time might have lacked a reliable source of income to fall back on.


The Depression crushed the economy, but it didn’t strike with the same force everywhere. To investigate the hypothesis, Mezzanotti’s team analysed county-by-county Federal Deposit Insurance Corporation (FDIC) reports on banking suspensions in the US from 1920 to 1936.

The researchers identified counties that experienced more severe distress, which they defined as having reported some bank deposit suspended from 1930 to 1933. The bank suspensions were a proxy for local economic woes which might have affected wealthy businessmen’s ability to invest in inventors’ projects.

During the Depression, independent inventors’ patents dropped by 13 percent more in highly distressed counties than in less distressed ones. And that gap continued for seven decades. “There is no recovery afterward,” Mezzanotti says.

Using US Census data from 1910 to 1940, the team could find some basic demographic information about these inventors. They found that younger, less experienced inventors suffered from a bigger decline in patenting. Seasoned inventors might have had more personal funds to draw on or built enough of a reputation to continue securing funding.

Among firms, the level of banking distress in their county didn’t seem to affect patenting activity. But a difference emerged when the team split companies by age.

At new firms, total patents dropped by 3.4 percent more in highly distressed counties, perhaps because they relied on funding channels similar to those of independent inventors. At older firms, patents marginally increased in more distressed areas, with most of the increase coming from larger companies. This pattern suggested that innovation talent had somehow been shuffled. Perhaps independent inventors were moving from home laboratories to established firms.


The researchers focused on inventors who had patents granted before and during the Great Depression — they had somehow managed to continue innovating through the crisis. Among this persistent group, inventors who lived in distressed counties were more likely to move to a company. Their names were still listed, but the patents were assigned to firms. Without support from their usual investors, these inventors perhaps saw better prospects in a corporate environment. “It’s not that these independent inventors necessarily disappeared,” Mezzanotti says.

Were these moves good or bad for innovation overall? Mezzanotti can’t make a definitive judgment.

But the team did analyse how the quality of patents changed, using the citations that each patent received as a rough indicator. During and after the Depression, the average number of citations per patent was higher in more distressed counties. Much of the decline in independent patenting seemed to have come from lower-quality ideas.

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> TheGreatDepressionhastenedtheendoftheindependentinventor—butnotall waslost,sayresearchersTaniaBabina,AsafBernsteinandFilippoMezzanotti.
to Innovation
an Economic Crisis…? ThisstoryfirstappearedinKelloggInsight
What Happens
"There was a drop across all technologies around the onset of the Depression."

Society might have still lost out on some potentially great innovations. But the results suggest that “if you were an inventor with a very high-quality idea, the effect there was much more limited”.


Mezzanotti and his colleagues looked more closely at the types of patents affected. The Depression seemed to have acted as an “equilibrium switch” that pushed innovation into firms. The trend should have been even stronger when companies had an advantage over individual inventors.

Some emerging technologies might be more effectively developed by teams, which would be easier to assemble within a firm. An independent inventor working without the support of colleagues could have a harder time executing a complex idea.

This expectation was borne out by the data: in distressed counties, independent patents with solo inventors tended to decline more than independent patents filed by teams. The type of inventing activity that was going out of fashion due to an increasing focus on technologies that required collaboration took a bigger hit.

Independent inventors would be at a disadvantage when working on projects that required substantial capital investment. “This is where the firms are becoming superior over time,” Mezzanotti says. Independent patents declined more in technologies used in industries that relied heavily on external funding.

The researchers also ruled out some alternative explanations. One may expect that government interventions intended to boost innovation after the crisis favoured big firms over individuals. But the long-term decline in independent inventors’ patents wasn’t any more pronounced in industries with more government involvement. In fact, the drop was smaller in those fields than in other technologies.

Nor did the trends seem to be driven by inventors leaving distressed counties. Based on census data, it didn’t seem that they moved away, Mezzanotti says.

The study illustrates how economic crises can transform the landscape of innovation, forcing changes to unfold more quickly than in calm periods. “These are times when people are forced to rethink the way they’re organising their life, their business, or their activity,” he adds. To take a modern example, video conferencing probably would have gained momentum over the coming decades. The Covid-19 pandemic fast-tracked widespread use of the technology.

The Great Depression was a unique event, and its lessons can’t be mapped directly onto recent or ongoing economic downturns. The trends the team saw were not a “recipe” for the next crisis, Mezzanotti says. But the research highlights that, during these extreme events, there may be other forces at work. i

Winter 2022-2023 Issue 105

Middle East

Abu Dhabi’s On a Roll With a Free Zone, Burgeoning Appeal, and an Eye Fixed on the Future

Abu Dhabi has its own financial oasis: Al Maryah Island.

Brendan Filipovski Abu Dhabi: Al Maryah Island

In just seven years, the Abu Dhabi Global Market free zone has become a leading financial centre. The city’s investment in digital banking showed strategic foresight and swiftness of response to outstrip its rivals — but other centres are vying for that top spot.

Abu Dhabi first appeared in the Global Centres Financial Index in 2011 with a rank of 48. Today it is 32nd, and has the second-highest ranking in the Middle East and Africa. It has won the award for Best International Financial Centre (EMEA) for three consecutive years: 2019, 2020, and 2021.

The Abu Dhabi Securities Exchange is the 23rd in the world by market capitalisation as of August 2022, and the second-largest in the Middle East after Saudi Arabia’s Tadawul Exchange. It is over three-and-half-times the capitalisation of the Dubai Financial Market exchange. Last year, it introduced derivatives trading on equities.

Two of the largest banks in the Middle East and Africa are headquartered in Abu Dhabi: First Abu Dhabi Bank and Abu Dhabi Commercial Bank. The city ranks third in the Middle East for highnet-worth individuals, with 23,800 millionaires and three billionaires.

This is all in sharp contrast to the 20th Century, when the capital had a population of just 6,000 and the most important industries were pearl diving and fishing. After oil was discovered in Saudi Arabia in 1938, interest piqued in the Trucial States. Sheikh Shakhbut bin Sultan al Nahyan invited foreign companies to drill. Progress was delayed by World War II and some unsuccessful explorations, but after Jacque Cousteau mapped the seabed of the Gulf, an offshore well owned by BP and the forerunner of Total struck oil in the Umm Shaif field in 1958.

Today, it is estimated that the UAE has the eighth-highest reserves in the world — and Abu Dhabi has 94 percent of that.

In 1968, Sheikh Zayed ibn Sultan Al Nahyan began the first five-year plan to modernise Abu Dhabi. The port was expanded, an airport and desalination plant constructed, and paved roads linked it with Dubai and Qatar. He provided residents with the land and finance to build modern homes.

When the Trucial States gained independence from Britain and came under the UAE in 1971, Abu Dhabi was made the capital, and Zayed became the emirates’ first president. The boom in oil prices in 1974-75 spurred the development of apartment buildings, parks, health services, and hotels.

In 1976, Abu Dhabi created its sovereign wealth fund, the Abu Dhabi Investment Authority. It is currently ranked the third largest SWF in the world with around $700bn in assets. One of the roles of the investment authority is to help diversify the national and regional economies. The city began to attract large numbers of expats, and by 1980, the population hit 240,000.

Abu Dhabi has invested in tourism, biopharma, and manufacturing. It has the world’s largest single-site solar power plant and has built the Barakah nuclear generator.

In 2004, Sheikh Khalifa bin Zayed Al Nahyan succeeded his father as Sheikh of Abu Dhabi and president of UAE. Khalifa retained his father’s passion for development and built on earlier advances to create a truly global city. He introduced land, political, and economic reforms, allowing the leasing of land to foreigners and the liberalisation of state-owned enterprises. This wave of privatisation was key, with many former SOEs listing on the stock exchange. He also created special economic zones and championed education. “Despite our conspicuous economic achievements,” he said, “we remain committed to the development of our human capital, for this is the most valuable of all our assets.”

Khalifa’s reforms drew foreign and domestic private-sector investment and saw the rise of entrepreneurship in the city. In 2008, he released the AbuDhabiEconomicVision2030plan, which set out long-term development proposals. These included the development of Abu Dhabi’s tourism and financial markets. There was an emphasis on innovation in financing and structure.

In 2015, in keeping with Vision 2030, Abu Dhabi opened a financial district on Al Maryah: the Abu Dhabi Global Market (ADGM). The 114-hectare free zone has separate governance, regulations and laws administered by four dedicated agencies, including its own courts (based on English common law) and the Financial Services Regulatory Authority.

The ADGM was designed to create a space for financial innovation and cross-pollination

between domestic and international banks, financial service companies, fintech firms, and other entities. Companies can register digitally and are exempt from import, export, and income taxes.

In its first seven years, the free zone attracted over 4,200 licensed companies, a workforce of over 18,000, and total AUM of $33bn. “ADGM’s accelerated growth strategy reflects a commitment to boosting local innovation in both traditional and new-age finance across a diversity of clusters,” said ADGM chairman Ahmed Jasim Al Zaabi, “including virtual assets, cleantech, healthtech and cybertech.”

In a relatively short time, ADGM has become a world leader in virtual assets. By consulting with industry, it has created an evolving framework that allows the use of NFTs, decentralised finance, and multilateral trading.

Living conditions in Abu Dhabi have also come a long way. The small fishing village is now into its second-generation urban plan and has become a popular venue for locals and expats. The relaxed city vibe features parks, the waterfront, and a lively café and restaurant scene. This family-friendly lifestyle is epitomised by Saadiyat Island, which combines luxury living with pristine beaches, landscaped parks, and cultural attractions including the Louvre Abu Dhabi. In 2025, the Guggenheim Abu Dhabi is due to open.

Cuisine reflects the city’s diverse influences and has gained the attention of the Michelin Guide, which will begin coverage of the city in its 2023 edition. Mercer ranks Abu Dhabi 78th for quality of living, six spots ahead of Taipei, eight ahead of Tallin (Estonia), and 26 ahead of Tel Aviv. It is ranked 61st in terms of costof-living — Dubai is 31st, one spot ahead of Miami.

The city has become a modern and dynamic centre. Abu Dhabi’s focus on the future of finance, and backing from the Abu Dhabi Investment Authority, should see it continue to rise in regional and global importance. i

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"Living conditions in Abu Dhabi have also come a long way. The small fishing village is now into its secondgeneration urban plan and has become a popular venue for locals and expats. The relaxed city vibe features parks, the waterfront, and a lively café and restaurant scene."
"Today, it is estimated that the UAE has the eighth-highest reserves in the world — and Abu Dhabi has 94 percent of that."

BSF — a Bank that Takes its Responsibilities Very Seriously: Unswerving Focus on Customers, and Creating a Fresh Response to Financial Needs of the Individual

As well as satisfying their immediate needs and desires, consumers and customers have been made aware of the importance of their personal and financial choices. ESG (environmental, social, and governance) and CSR (corporate social responsibility) are of primary importance. So are ethical and religious considerations.

Here, the Saudi Arabian joint stock company Banque Saudi Fransi (BSF), established in 1977, stands strong. "The challenge,” says BSF’s Head of Personal Banking Group Mohammed Alsheikh, “is to set realistic customer expectations — and then exceed them.”

BSF offers a comprehensive range of financial services for corporate and retail banking. Attention has been paid to all requirements, including the demand for Islamic banking in accordance with the Islamic Shari’ah principles. BSF also provides investment banking, asset management and investment funds.

Brokerage services are also undertaken, this time via the BSF subsidiary, Saudi Fransi Capital. A good deal of thought has gone into the complete nature of the financial services on offer. To quote Mohammed Alsheikh once more: “Building an impressive customer experience does not happen by accident, it happens by design.”

Alsheikh believes that focusing on the customer is not simply a matter of doing what is expected of any financial institution. Innovation — a longheld and widely practised value at BSF — and a firm focus on creating a client-focused workforce has allowed the bank to solidly position itself on the “winning side of competitive advantage”.

If customer experience is the new battleground for businesses in general, it has become the defining characteristic of an agile and competent one in the digital world. “Customer experience, or CX, is vital to a successful relationship.”

By combining technology and innovation to meet the ever-increasing demands and requirements of a fast-paced nation, that customer experience has taken the stage front and centre at BSF.

The knock-on effects and benefits have led to sustainable innovation in products, services, and business practices.

An abundance of clients and customers — in a world approaching eight billion people — has meant to some enterprises that there is no need to focus on individual satisfaction. The sheer weight of numbers will pull us through, goes the (outdated) thinking.

Wrong, says BSF. It’s not about customer turnover, it’s about customer satisfaction — at all levels.

Retaining talent has become another focus in 2022, as employers struggle to show proper

respect for their staff. Again, BSF is ahead of the game. It not only retains its staff, it forges lasting relationships with its clients and customers — boosting revenue all the while. “It costs more to obtain a new customer than it does to retain an existing one,” notes Alsheikh.

Customer advocacy is, and always will be, the highest priority for BSF. “We see it as not just serving our customers better,” he adds, “but providing such great service that they are willing to become advocates for BSF products and services.”

With awards and recognition flooding in... job done! i

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Head of Personal Banking Group: Mohammed Alsheikh
Being customer-centric has become the norm for businesses and financial institutions in a world increasingly aware of the importance of how a company is run, and what it stands for.


Securing Sustainable Water Supply Resources — Even in the Most Challenging Environments

Metito is delivering innovative water supply solutions across emerging markets with a clear commitment to the principles of circular economy and theUNsustainabledevelopmentgoals.

Impact, sustainability, innovation: with these founding principles, Metito has established itself

as a global leader and provider of intelligent water-management solutions.

The privately held company operates across the water value chain: water treatment, desalination, wastewater treatment recycling and reuse, and advanced industrial solutions. Metito is the largest global supplier of desalination plants by capacity

for 2021-22, and has pioneered the public-private partnership model in Saudi Arabia, Uzbekistan, the UAE, Egypt, Rwanda, Serbia and Qatar.

With an impressive portfolio of projects and concessions across key geographies, Metito has delivered tens of millions of cubic meters of treated water to municipal and industrial clients.

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The company has established itself as a key proponent of the circular economy, backed by 65 years of operational excellence. Powered by the dedication of more than 4,500 employees, it has gained invaluable experience in over 50 countries and acquired exceptional engineering capabilities, access to global resources and a synergistic shareholder structure.

Metito’s work is aligned with the UN Sustainable Development Goals (SDGs), specifically SDG 6 (Clean Water and Sanitation) and SDG 11 (Sustainable Cities and Communities). The company’s growth trajectory includes expanding operations in existing markets, opening new markets, securing job opportunities to local communities, and upskilling talent to deliver world-class projects and more industry firsts.

Metito has made an impressive impact in furthering access to water through enabling sustainble finance solutions to eleviate pressure on public budgets, and through integrating alternative energy solutions to optimise costs associated with operating mega scale desalination projects. Such unmatchable success is reflected in the company's body of work for 2022 and here we highlight a few of these acts of impact:

Securing Sustainable Finance

The development of truly “circular” water solutions requires sustainable financing. Metito secured the first sustainability-linked loan in the MENA region, a $120m facility by HSBC. This is the banks's first facility of its type in the region and the single largest group-level banking facility ever arranged for Metito Holding.

Pioneering Public Private Partnership (PPPs)

This business model has allowed the development of lifeline water projects through effective cooperation between the public and private sectors. Metito successfully pioneered this business model and developed/is developing

the first PPP water/wastewater treatment projects in Qatar, Serbia, and Uzbekistan.

An Innovative Approach to Desalination

Metito designed, engineered, and built the world’s largest floating desalination barge (50,000 m3/d) to secure water supplies and enhance water security in Saudi Arabia. This is the first of three barges, with a combined capacity of 150,000 m3/d. It will be located four kilometres off the coast of Shuqaiq, and the end-user of this flagship project will be the Saline Water Conversion Corporation. The innovative solution allows governments to meet surging water demand in the face of pressing environmental challenges. Seasonal water requirements vary, and constantly change, in regions of rapid economic growth and through floating desalination barges, there is the flexibility of mobility which can secure additional water supplies anywhere along the coastline — with back-up supplies for contingencies and emergencies.

Optimised Energy Consumption for a More Ecofriendly Footprint and Reduced Emissions

Energy consumption for desalination was reduced from 4.5 per KW/m3 in 2015 to 2.7 in 2021 through innovative high-value engineering.

Turning Waste to Wealth and Embracing Circular Economy

Metito leads the consortium developing the world's largest agricultural drainage treatment, recycling and reuse plant, the New Delta plant - with a capacity of 7.5M m3/d. i

Winter 2022-2023 Issue | Capital Finance International 111
Floating Desalination Barges. Kingdom of Saudi Arabia. Capacity: 3 x 50,000m3/day Kigali Bulk Water Supply Plant Kigali, Rwanda. Capacity: 40,000m3/day

> Innovation, Client-Centricity and Enduring Quality: Synchronised,

Honed, Perfected


Accessibility, ease of use and — most importantly — inclusion are pillars of innovative projects that provide clients with incentive as well as personalised services.

Inclusion and financial education for young people are essential points of focus for national economic growth. By exploring non-traditional techniques, Capital Bank of Jordan has ensured that everyone can find their way to financial independence.

The institution is committed to delivering exceptional banking operations, digital innovation, and regional expansion. Its dedication to youth, financial inclusion and innovation was epitomised by the introduction of Blink — a digital bank that provides services through a smart platform. It was curated to welcome 18-year-olds into the banking world, emphasising Capital Bank’s confidence in Jordan’s youth, home-based business owners, women, and university students.

Establishing secure access to credit and banking services, without unnecessary barriers, is the essence of financial inclusion. Local, regional, and international banks need to play a role in empowering a move to financial stability and independence across generations. Blink’s ground-breaking proposition allows for the instantaneous opening of accounts and issue of credit cards — online, in an efficient and easyto-use way.

Beyond this nod of confidence to the Jordanian people, Capital Bank continues to evolve in the tech world. By investing in digital innovation — partnered by world-renowned banking solutionsproviders and application developers — it provides customers with personalised services and unique offerings.

Going digital may be the theme, but upholding enduring quality, without compromise, is Capital Bank’s continued focus — and key to sustainable growth. New and existing customers are at the heart of all operations. They entrust their finances to the bank, which responds with policies of digital expansion, inclusion, and central growth.

Regional expansion and a strengthened national network have cemented its position as a trusted

local and regional financial partner. This commitment by Capital Bank has endured for three decades.

In less than a year, the financial institution has made two notable acquisitions: Bank Audi, in Jordan and Iraq in 2021, and Société Générale de Banque — Jordanie in 2022. Capital Bank became a major shareholder of the National Bank of Iraq in 2005 and has launched wholly

owned subsidiaries in Iraq, Dubai, and Saudi Arabia.

Capital Bank has over $9bn in assets, and total shareholder equity stands at $898m. Between 2020 and 2021, it reported a record 100 percent increase in after-tax net profit: proof of its resilience, sustainable development, and ability to foster positive growth over the shortand long term.

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digital is a post-pandemic global theme, and no financial institution has takenitmoreseriouslythantheinclusiveCapitalBankofJord
W E H E L P Y O U R B U S I N E S S G R O W 2 0 + Y E A R S I N B U S I N E S S 2 0 + I N D U S T R I E S 7 0 + C O N S U L T A N T S 1 0 0 0 + S U C C E S S F U L P R O J E C T S

Innovative Mena Advances Move Insurance Company to the Head of its Sector

Despite soaring inflation, geopolitical uncertainties, natural catastrophes, financial market volatility and the pandemic, the Qatar Insurance Group (QIC) turned in gross written premiums of QAR7.8bn (£1.76bn) in the first nine months of 2022.

Under the leadership of group CEO Salem Khalaf Al-Mannai, QIC embarked on a group-wide digital transformation programme to improve customer experience, maximise efficiency gains, and modernise its offerings.

The group launched Anoud Technologies, a wholly owned subsidiary, with a best-in-class insurance IT platform, Anoud+. It provides insurers with a comprehensive way to manage all aspects of their programmes. The company was selected by leading European and Caribbean insurance groups to lead a multimillion-dollar IT initiative. Anoud Tech became the first Qatari firm to export internally-developed IT solutions to the regions. The integrated insurance solution is on ACORD and Alchemy Crew’s top 10 list of companies changing the industry through insurtech.

In April 2022, QIC launched Digital Venture Partners (DVP), a unit reshaping the digital insurance landscape. It leverages existing assets and partners with major tech companies and corporations to act as a hub connecting regional and international ventures with strategic growth opportunities.

QIC, in partnership with Deloitte, Google Cloud and QIC Digital Venture Partner (QIC DVP), hosted the Insurtech MENA Summit 2022, where technology leaders, investors and insurance innovators came together to unlock improved customer experiences in the mobility and health insurance verticals. With new value propositions and solutions in big-tech analytics, Al and machine learning, it uses behavioural economics to lead the MENA insurtech ecosystem.

The summit brought together insurance and technology pioneers, investors, and six insurtech start-up finalists from InsurHack MENA, the first insurtech “hackathon” in the Mena region.

In May 2022, QIC launched the all-inclusive qic. online service, the fastest online insurance portal

in Qatar which allows customers to buy and renew insurance policies in less than two minutes.

In support of Qatar’s ambition to reduce the country’s greenhouse gas emissions by 25 percent by 2030, and guided by a long-term ESG strategy, QIC created a sustainability committee. The body ensures that ESG

guidelines are incorporated in its underwriting and asset-management mechanisms.

The company’s digital and ESG strategies are aligned with the Qatar National Vision 2030, which emphasises the development of a digital economy, reducing the nation’s dependence on hydrocarbon industries. i

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CEO: Salem Khalaf Al-Mannai
QatarInsuranceCompany’sgroupmanagementshowsleadershipflairwithESG initiativesandafocusonclient-centricity.

Over Half a Century of Service and Specialisation — the Years

and the Successes Tell the Tale

QIC, the first domestic insurance company in the State of Qatar, was founded in 1964. Today, it is the dominant insurer for the GCC and Mena regions.

QIC is recognised as a core contributor to the development and diversification of the national economy. It has, from the very beginning, been a leader in the creation of innovative insurance solutions catering to regional needs.

QIC is one of the most highly rated insurers in the Gulf, with a rating of A (Excellent) from AM

Best and an A- from Standard & Poor’s. QIC is listed on the Qatar Stock Exchange, with a market capitalisation of more than QAR7.6bn (£1.72bn).


The Qatar Insurance Company has had a stable track record of profitability throughout its 58 years of operations. The group’s gross written premiums amounted to QAR7.8bn (£1.76bn), as QIC’s domestic and Mena operations continued to expand its gross written premiums by 14 percent to QAR2.3bn (£0.52bn).

QIC Global generated QAR5.5bn (£1.24bn) in premium volume, representing approximately 70 percent of the total gross written premiums.

QIC Group generated an underwriting income of QAR272m (£61.5m) in the first nine months of 2022 from its continuing operations, underlining robust performance from its domestic business.


QIC’s international operations operate under the umbrella of Antares Global, an insurance and reinsurance group with a geographic footprint spanning Qatar, the UAE, Oman, Kuwait, the UK, Singapore, Switzerland, Bermuda, and Gibraltar.

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Panel at the InsurTech MENA Summit 2022
TheQatarInsuranceCompanystandsaloneasaregionalandinternational leaderinitsfield.
"QIC is recognised as a core contributor to the development and diversification of the national economy. It has, from the very beginning, been a leader in the creation of innovative insurance solutions catering to regional needs."

The Qatar Insurance Company is a publicly listed composite insurer, and part of the QIC Group. QIC’s diverse portfolio of personal insurances (car, home, travel, boat, personal accident benefit) and commercial insurances (energy, marine and aviation, property and commercial, medical and motor) are key to the company’s success. These combine excellent distribution and service-delivery with a low administrative-expense ratio for the group’s core operations, forming part of its enhanced business model.

Oman Qatar Insurance Company (OQIC), Kuwait Qatar Insurance Company (KQIC), and UAE Qatar Insurance Company (UAEQIC) are Qatar Insurance Group subsidiaries in the GCC region. They deliver innovative retail solutions for home, travel and car insurances to every segment of their customer bases. The companies serve as a conduit for insurance services across the GCC, and connect overseas insurance interests via their global network.

Antares Re is a Class-4 insurer and a global multiline reinsurer, writing all major property, casualty and speciality lines of business. With its headquarters in Bermuda, and with offices in Zurich and London, Qatar Re is linked to the world’s major reinsurance markets — and the core operations of its clients.

The company, backed by a parental guarantee from Qatar Insurance Company SAQ, benefits from QIC’s substantial capital base. The company is rated A by S&P Global Ratings and AM Best.

Antares Global, with branches in London, Shanghai, and Singapore, operates at Lloyd’s, the world’s prime global insurance and reinsurance market. This specialist insurer and reinsurer is recognised worldwide for its services.

Through its highly experienced team of underwriters, Antares provides a diversified global range of property, reinsurance, casualty and speciality underwriting services. Antares provides quality, security, and continuity, taking a consistent approach to risk-transfer. It boasts security ratings

of A+ from S&P and A from AM Best, assigned to Lloyd’s.

Epicure Islamic Investment Management is a 100 percent subsidiary of QIC Group. Founded in May 2019, the Qatar Financial Centre-based entity manages more than $7bn in investment assets across equites, fixed income, and real estate.

Qatar Insurance Real Estate is another wholly owned subsidiary of QIC Group. The company’s portfolio consists of high-quality real estate assets, mostly in Qatar. QICR invests in incomegenerating assets with strong anchor tenants.

Qatar Life & Medical Insurance (QLM) is publicly listed company for life and medical insurance solutions, regulated by Qatar National Bank. It provides best-in-class services to its clients with unique value propositions.

The company’s mission: to continuously provide outstanding medical and life coverage as a trusted healthcare partner. i

Winter 2022-2023 Issue | Capital Finance International 117
Global generated QAR5.5bn (£1.24bn) in premium volume, representing approximately 70 percent of the total gross written premiums. QIC Group generated an underwriting income of QAR272m (£61.5m) in the first nine months of 2022 from its continuing operations, underlining robust performance from its domestic business."
Group structure "QIC

Digital Twins and Data are Building Blocks of the Enterprise Metaverse — and Foundations for the Future

Organisations are moving into a radically different future, at the intersection of new worlds and providing services in environments created by others.

The Enterprise Metaverse is starting to take shape.

The Dubai Metaverse Assembly, organised by the Dubai Future Foundation in partnership with Accenture, the World Economic Forum (WEF), and others at the Museum of the Future, gave a platform to 300 global experts, policy makers and thought-leaders to explore how revolutionary technology can be deployed across sectors to create the foundation of a digital economy.

The UAE Ministry of Economy has launched its metaverse HQ to become the Ministry of Economy’s third address, after Abu Dhabi and Dubai, offering an immersive experience for governments, global corporations and the public to connect and collaborate. The virtual government office is equipped with advanced technology for the ministry to sign bilateral agreements with other nations in the metaverse.

The UAE is advancing as a global hub for nextgen technologies. Dubai has announced its aim to become a top-10 metaverse economy — and create a “digital twin” to simulate plans for tourism, real estate, education, retail, and government services.

Interconnected digital twins replicate everything from assets such as offices, manufacturing lines, production sites, heavy machinery and products to “personas”: clients, employees, and service agents. This extends all the way to core business processes and will power the enterprise metaverse. When digital twins interconnect, they become smarter as they simulate complex relationships and generate richer insights.

This means more comprehensive use cases with increased value. The “mirrored world” gives organisations an unbroken thread of data about their current state. It requires a comprehensive re-thinking of data practices, and a strategy for keeping data sources updated. Combined with the power of AI, digital twins offer complex system

modelling and simulation — the ability to ask “what if” questions and pivot as needs change. What if this vendor can’t provide the parts needed to keep production going? What if the factory needs to be taken offline for a day?

This goes beyond ensuring organisations are ready to respond to change; it puts them in a position to drive it.

Companies are making greater commitments to sustainability, and intelligent digital twins provide the capabilities to enable real change.

Want to update an existing product using parts from renewable resources? With the right data, intelligent twins can tell whether it can be done with existing vendors, or how processes might need to change.

Digital twins were initially championed for their ability to monitor, simulate, and streamline data from different devices. The scale of the models, the addition of AI and an increase in adoption has transformed the equation. Organisations are connecting massive networks of intelligent twins, linking them to create living models of factories,

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Lines between physical and virtual worlds blur as every asset, process and individualrelatedtotheorganisationwillbevirtuallyreplicated.

product lifecycles, supply chains, ports and cities. They are creating unbroken threads of data that will soon be essential to all digital strategy.

When built on comprehensive, compatible and trusted data, intelligent digital twins and mirrored environments can optimise operations, detect and predict anomalies, pivot to prevent unplanned downtime, enable greater autonomy, and dynamically adjust their designs and strategies.

This requires responsibility at the core, from ownership of data to inclusion and diversity, sustainability, security, and personal safety.

In many ways, the new worlds that organisations are building have no history or legacy — there is no right or wrong way to do it. This means immense opportunity, but enterprises will be pushing boundaries far beyond the reach of today’s policies and regulations. And while the possibilities are enormous, so are the potential pitfalls.

Organisations will find themselves on the frontlines of these new spaces: establishing trust and safety and defining the human experience. Trust will be of paramount importance to the adoption of the new experiences. Considerations focus on privacy, bias, fairness, and human impact. Those that wish to lead will shoulder the mantle of building a responsible metaverse — and the actions and choices they make will set the standards for those that follow.

It leaves decision-makers at a critical moment. These new frontiers will redefine and reshape operational progress for decades to come. Those who shy away from the uncertainty could find themselves operating in worlds defined by others — playing by someone else’s rules.

Bold leaders will embrace the uncertainty — and wield it as opportunity. i


Bashar Kilani is Managing Director at Accenture based in Dubai and a member of the Growth

Markets leadership team focusing on Digital Economy market making trends that accelerate growth, transform operations, and enable organisations to build their digital core.

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Author: Bashar Kilani Digital twins facilitate dialogue between designers, clients, marketing, product managers and manufacturers. Image: Accenture
"When digital twins interconnect, they become smarter as they simulate complex relationships and generate richer insights."

Latin America

From Coffee Growing to Global Fintech Hub, Brazil’s São Paulo Knows How to Adapt and Thrive

Bankers the world over start their day with coffee — and in the Brazilian city of São Paulo, banking itself started with coffee.

São Paulo, Brazil: Parque Ibirapuera

The city was founded in 1554 by Jesuit missionaries aiming to convert the indigenous population. For the first 280 years, it remained nothing but a town — but that changed with the arrival of coffee plantations. São Paulo is now the world’s fourth-largest city, Latin America’s most populous, and a leading global financial and fintech centre.

It boasts some impressive stats. It’s the largest city in Latin America and the southern hemisphere, with a population larger than Belgium’s and a GDP nearly half that of Portugal’s. Its stock exchange, B3 (Brasil Bolsa Balcão), is the largest in Latin America by market capitalisation, and 20th in world rankings. It is nearly double the size of the Bolsa Mexicana de Valores, and over five-times the size of the Bolsa Electronica de Chile.

São Paulo is home to around half of Brazil’s multinationals and has three entries in the S&P’s largest banks list for 2022 — Itaú Unibanco, Banco do Brasil, and Banco Bradesco. In fintech, it was ranked fourth in the world in 2021, trailing only San Francisco, London and New York. São Paulo has 508 fintech firms, from lending and mobile payment companies to crypto specialists. The most famous is neo-bank Nubank, listed on the B3 and the NYSE, with a market capitalisation of around $21bn. Fintechs benefit from incubator and accelerator programmes, and receive support from the state government and established financial institutions such as Banco do Brasil.

While São Paulo has an impressive skyline today, its beginnings were humble. Coffee was first introduced to northern Brazil in 1727 for domestic consumption, but as demand increased in the US and Europe in the 19th Century, plantations spread south to the states of Rio Di Janeiro, Minas Gerais, and São Paulo. By 1840, the three states produced 40 percent of the world’s coffee. The Terra Roxa region, named for its reddish-purple soil, has higher altitudes and cooler temperatures — perfect for the bourbon arabica cultivar.

When over-farming depleted soils in Rio, São Paulo state and Minas Gerais became the main growing areas. Given São Paulo city’s proximity to the plantations — and its position at the head of the only road to the nearest seaport of Santos — it became the main hub for the coffee trade. This was bolstered by a railway link to Santos in 1867.

Railways brought foreign companies and banks. Coffee barons arrived, who would decorate Sao Paolo’s main street, Avenida Paulista, with

French and Arabesque mansions. With the abolition of slavery in Brazil in 1888, growers turned to migrants for their labour force. Swiss-Germans, Italians, Portuguese, Spanish, Lebanese and Japanese all flocked to São Paulo. In 1872, the population sat at 31,385; by 1900 it was 239,820.

As the 19th Century came to a close, manufacturing replaced coffee as the number one industry, a fact underlined by the collapse of the coffee price after World War II and the federal government’s import-substitution policies of the 1950s. Local banks grew to meet emerging needs, and cheap energy from local hydroelectric power helped to expand the sector. From 1900 to 1930, industrial production increased 4.6-times, while the population increased at almost the same rate to top one million. Foreign firms began to set up in São Paulo.

Between 1950 and 1980, the population grew from 2.2m to 8.5m. By 1980, a third of Brazil’s industrial workforce was in the Greater São Paulo area. It finally eclipsed Rio Di Janeiro in the 1960s after the Brazilian capital was moved to Brasilia. The 1960s saw many of the mansions of the coffee barons replaced by the skyscrapers of the booming financial district.

The 1980s were difficult for Brazil and São Paulo. Import-substitution and immigration had run their course and manufacturing moved elsewhere in Brazil, or overseas. People also moved — from the city centre to lower-income neighbourhoods on the outskirts.

São Paulo has transformed itself through the growth of services, R&D, and its links to the global economy. In additional to financial services, the city boasts the nation’s leading hospitals and is a centre for fashion and theatre. It has several universities and research centres — well funded by the state government — that have attracted foreign investment.

As a place to live, São Paulo is a mixed bag. High-income areas feature gated communities

with modern amenities and subway lines to the city centre. The ultra-rich avoid the traffic jams with helicopter commutes — there are more helicopter pads than in New York City. Lowerincome neighbourhoods at the edges of lowlying areas often lack public transport, but three subway lines are under construction, and two existing ones are being extended. The city is also rolling out a 5G network.

Mercer ranks São Paulo 119th in terms of desirable places to live, one spot ahead of Beijing, ten ahead of Mexico, 14 ahead of Bangkok, and 20 ahead of Belgrade. It is ranked 168th for prime property costs, some eight times cheaper than London. It has the spectacular São Paulo Museum of Art (MASP) in Avenida Paulista, and life in São Paulo is never dull. The mix of cultures means amazing food (nine Michelin-starred restaurants), vibrant nightlife, and a wealth of street and music festivals. Its place at the forefront of financial centres seems secure, with the Brazilian economy on the rise.

Sao Paolo’s main challenges come not from other cities, but from the environment. Waterways are polluted and forests in the catchment area have been denuded over the years, increasing erosion. Around 30 percent of treated water is lost to leaks and theft. This has been compounded by droughts in recent years that have affected hydroelectricity generation. In 2015, the city was close to running out of water and there were shortages again in 2021. The dystopian São Paulo described in Ignacio de Loyola Brandao’s 1981 novel And Still The Earth gives an idea of what to avoid. So far, authorities have responded to the water crisis with the $680m São Lourenço water-diversion system and efforts to cut pollution and waste.

São Paulo is perhaps best safeguarded from these challenges by its people. Paulistanos remain hardworking and innovative, and while no one knows what Avenida Paulista will look like in another 100 years, the city will almost certainly continue to thrive. i

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"It boasts some impressive stats. It’s the largest city in Latin America and the southern hemisphere, with a population larger than Belgium’s and a GDP nearly half that of Portugal’s."
"Sao Paolo’s main challenges come not from other cities, but from the environment. Waterways are polluted and forests in the catchment area have been denuded over the years, increasing erosion."

Nazca: Meet the Team Keeping Entrepreneurs on Track



and Managing Partner

Hector Sepúlveda co-founded Intangible, the first Mexican "company builder" in 2013, and went on to co-found venture capital firm Nazca a year later.

His experience in the entrepreneurial ecosystem dates back to 2001. He has founded six companies (with two successful exits) in the pharmaceutical, retail, real estate, manufacturing, and technology sectors.

Since 2014, Nazca has supported talented founders including Kavak, Jüsto, Albo, Luuna, Ubvan, Crehana, Momentus Space, Urbanic, and Vest. Hector Sepúlveda is an Endeavor entrepreneur, an industrial engineer who graduated from Universidad Iberoamericana. He completed the Owner President Management (OPM) programme from Harvard Business School.



and Managing Partner

Jaime Zunzunegui is an asset manager, entrepreneur and investor. He has raised more than $300m in equity and debt in sectors including renewable energy, financial institutions, technology, and real estate.

Zunzunegui has overseen 10 successful exits since 2004, including two IPOs. He has been a key agent in the growth and consolidation of Nazca since he joined in 2018 as managing partner.

He is a founding partner and former member of the board of Grupo Financiero Actinver ($20bn AUM). He is a director and member of the audit committee of Seguros Atlas (the seventhlargest insurer in Mexico), and founder of Impulsa Generación Renovable. That firm, which developed hydro-electric, solar and wind power, was sold in 2014.

Zunzunegui was previously the head of mergers and acquisitions (M&A) for CIE B, closing some 30 transactions in Latin America, the US and Europe. He has also worked as an investment banking analyst for M&A at UBS in Mexico City and New York.

Jaime Zunzunegui holds a BA degree from ITAM, an MBA from IESE School, and completed an OPM (Owner President Management Programme) at Harvard Business School.

ANDREA NAVARRO Head of Legal & Environmental and Social Officer

Andrea Navarro joined Nazca’s legal team in 2017, and has been involved in Environmental and Social (E&S) procedures since June 2020.

In March 2021, she was appointed as Nazca’s E&S officer, and completed IFC’s E&S courses on Sustainability Training and E-Learning ProgramSTEP and Managing Environmental and Social Performance.

Navarro received E&S training from IFC when conducting Environmental and Social Due Diligences (ESDDs) in 2020/2021. She led the development and implementation of Nazca’s Environmental and Social Risk Management System and the Disclosure Statement and verification summary for the Operating Principles for Impact Management.

Each principle is incorporated into Nazca’s investment process and aligned with its impact management system and processes. Andrea Navarro has a Law degree from Universidad

Iberoamericana in Mexico City, where she graduated with honours.


Natalia Sánchez is an investment associate at Nazca, after serving the firm as an investment analyst. She has supported the implementation of E&S standards within portfolio companies.

Sánchez has worked closely with many founders and C-suite executives in the review and development of the basis for E&S management systems. She also supports the entire deal flow and opportunity analysis processes, as well as portfolio management of existing investments.

Prior to joining the Nazca team, Natalia Sánchez worked in equity research at Morgan Stanley, where she was part of the team covering telecom, media, and technology companies across Latin America.

She has worked as a business tax advisor at Ernst & Young, and holds a BA in Public Accounting and Financial Strategy from ITAM in Mexico City. i

Winter 2022-2023 Issue | Capital Finance International 123 >
Nazca professionals have the qualifications and verve to keep things movinginLatinAmerica.
Co-founder and Managing Partner: Héctor Sepúlveda Co-founder and Managing Partner: Jaime Zunzunegui Head of Legal & Environmental and Social Officer: Andrea Navarro Associate: Natalia Sánchez

Will Latin America Return to ‘Mediocre’ Growth After Shocks of the Pandemic?

The pandemic hit Latin America hard, and its economic recovery has been relatively slow.

In addition to the legacy of public debt, the pandemic damaged the labour market and human capital. The Covid crisis has receded, but a significant scar has been left.

Deaths from the pandemic are currently low, but average excess mortality in Latin America was among the highest in the world. It was double the worldwide average and second only to Central Europe, Eastern Europe and Central Asia, according to the World Bank's Latin America and the Caribbean Economic Review (Figure 1).

Economic growth is not expected to exceed the pace set in the 2010s. In most countries, employment and GDP have returned to prepandemic levels. But as the World Bank report states, growth forecasts for the next few years are "resiliently mediocre".

Post-pandemic recovery partially reversed the 2020-21 poverty increase. But GDP losses will not be recovered; nor will they erase the longterm scars on health, education, and inequality.

The war in Ukraine has had an economic impact on the region, mainly through commodity prices and increases in domestic inflation rates. While commodity exporters (or importers) had positive (or negative) effects on GDP, all had to face inflation in food and energy prices. This mainly affects those at the bottom of the income pyramid.

Growth-rate forecasts for the region have steadily increased since January 2022, in contrast to downgrades for the rest of the world because of the war. The GDPs of net food- and fuel importers, such as the Caribbean and Central America, were negatively affected. Rising prices have affected households across those regions.

On the other hand, the general increase in commodity prices has been a GDP boon for regional exporters such as Argentina, Brazil, Chile, Colombia, Ecuador and Peru.

For commodities, 2022 has been a volatile year. After rising dramatically in the first half of the year, prices retreated in Q3, reflecting

Figure 2: High Debt. Source: Acosta-Ormaechea et al (2022). Note:LA4=Brazil,Chile,Colombia,andMexico;LA5=LA4plusPeru;EMDE=EmergingMarketandDevelopingEconomies.

China's growth slowdown and the appreciation of the US dollar.

According to the IMF's World Economic Outlook, commodity prices should change course. In the case of oil prices, futures markets predict a coming fall — after a rise of 41 percent over 2022. Russia's Ukraine invasion has raised base metal prices. Those prices are expected to go 5.5 percent lower, on average, and decline by a further 12 percent in 2023.

The IMF report predicts that precious metals prices will fall more moderately: 0.9 percent

for 2022, and an additional 0.6 percent in 2023. Food commodity prices, which also surged, fell to pre-war levels in summer, ending a two-year rally. But not before adding five percentage points to the country's average food price inflation in 2021 — plus an estimated six percentage points in 2022, and two in 2023.

The asymmetrical effects of higher commodity prices on the region's population, mainly undermining purchasing power at the bottom of the pyramid, have been accompanied by social transfer policies and other types of support. The

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Figure 1: Excess mortality due to the COVID-19 pandemic in 2020–21 (percent). Source: World Bank (2022).
GDPlosseswillnoterasethelong-termscarsonhealth,education,orinequality —butthereisstillhope,reportsOtavianoCanuto.

absence of readily available fiscal space has been a constraint.

The increased frequency of adverse weather events — probably reflecting climate change — has caused another shock in food and energy prices. More frequent floods and droughts have affected food and energy supplies in China, India, Europe, the US, Africa and Latin America. Climate change, the pandemic, war, and increasing risks of hunger constitute a "perfect storm".

In addition to these three shocks, a fourth came with the tightening of global financial conditions. Central banks in advanced economies met high global inflation with tighter monetary policies.

Growth dynamics held a positive surprise for most of the region, with the return to pre-pandemic levels of the services and employment sectors. Another factor is the effect of external conditions, which had remained favourable: high commodity prices, strong external demand, remittances, and the return of tourism. These factors help to explain the upward revisions to growth forecasts from January 2022.

Tightening global financial conditions are now pushing in the opposite direction. The availability and cost of domestic finance have been negatively affected as the region's central banks raised interest rates to control domestic inflation. Capital inflows decreased, and external borrowing costs increased due to lower risk-appetite on the part of investors.

The Latin American region is generally more resilient to such ongoing monetary shocks. Banking systems are healthier, and public balance sheets are generally not as fragile. The cushion in foreign exchange reserves also makes a difference.

Corporate debt outside the banking system deserves attention. Higher domestic interest rates will tighten conditions for rolling-over public debt (Figure 2).

After the upward surprises in GDP growth, expectations for 2023 are weaker. While the International Monetary Fund and World Bank expect the average GDP growth rate to reach three to 3.5 percent, forecasts take those predictions down to about 1.7 percent.

But Latin America's recovery should not be limited to a return to pre-pandemic "mediocre" levels of output growth. Investments in green infrastructure, the exploration of digital connectivity opened by the pandemic, and the improvement of the business environment and education systems could lead to more resilient, inclusive, and dynamic growth patterns. i

Winter 2022-2023 Issue 125

Building a Sustainable Future

From board diversity to biodiversity, climate risk to community relations, Barrick’s commitment to managing sustainability effectively and responsibly has long been entrenched in its DNA and Barrick approaches it with the same diligence it applies to understanding its orebodies and accounts.

Barrick Gold Corporation’s 18-country portfolio holds 14 gold mines, including six of the world’s Tier One operations as well as three strategic copper producers, all with long-term business plans based on declared resources.

dPA 6544/A

EY Argentina: How Inflation Hits Businesses and Taxation

Those countries where tax adjustment is available tend to compensate for the consequences of inflation — but many jurisdictions currently are not.

Argentina can help us to understand how tax liabilities are impacted by inflation.

Wikipedia defines inflation thus: "In economics, inflation is a general increase in the prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasingpowerofmoney."

This year, inflation rates increased worldwide. In the US, 63 percent of adult Americans are living paycheck-to-paycheck because of rising prices. And 49 percent of those earning six figures annually are reportedly in the same position.

In the Argentine context, price expansion is impacting businesses and tax liabilities. These dynamics may trigger effects in other jurisdictions.

The Wikipedia definition above applies to generic economic analysis. In the tax dimension, the consequences of inflation merit particular explanation. Argentina is a country that lived in an inflationary environment for the past 50 years, with the exception of the ‘90s when the government of the day managed to reduce it to zero.

Argentina’s tax system is composed of three levels: federal, provincial and municipal. Revenue is dependent on indirect taxes more than direct ones. Taxes on consumption and economic transactions play a bigger role than those on income. Last year, income tax represented just 20 percent of total revenue; indirect taxes accounted for 52 percent. Social security and taxes on equity made up the remainder.

In 1992, Argentina suspended adjustment for inflation for tax purposes and partially enacted it until 2018. In 2021, inflation adjustment was applied without restrictions. Over the past 20 years, corporate tax liabilities had been impacted by inflation without any relief for taxpayers.

One reason for this is that inflation generally boosts tax revenue for governments. In an extreme situation, it may even generate confiscatory damage. Indirect taxes are automatically adjusted

for inflation because their tax base is dependent on price increases. This is true for VAT, gross sales taxes, taxes on financial transactions, and export duties. When prices of goods and services increase because of currency devaluation, so does the indirect tax base. The more the system is dependent on indirect tax revenue, the better it reacts to inflation dynamics.

The Argentine government has created withholding regimes on domestic transactions, aimed at accelerating tax collection. These regimes, which apply to federal and provincial taxes, allow authorities to collect revenue when transactions are actually paid without relying on tax filings. It is not rare for tax credits to accumulate, and may take years to be recovered.

When it comes to income tax, the Argentine authorities benefit from inflation — because deductions, depreciations, tax basis and tax losses are eroded and lose their power to shelter income. If the revenue line of the P&L is automatically adjusted for inflation but some tax deductions and monetary assets are eroded by the same inflationary effect, the entity ends up artificially increasing the income tax basis and paying more. The term “artificially” is appropriate: in the absence of a legal provision that allows taxpayers to counteract the inflationary effect for tax purposes, businesses tax liability is increased without a legal mandate — taxation without representation.

There are other effects. Working capital management is relevant as inflation rises. Highly leveraged companies tend to trigger a gain for having a debt exposed to inflation. If there is no tax provision for this situation, such income is not subject to tax because it is not reflected in the books. Those taxpayers would be the winners of the inflationary context. Those with a positive working capital tend to generate a loss, because inflation erodes the value of inventories and accounts receivable.

But such loss does not hit the tax P&L in the absence of tax provisions coping with inflation effects. The company loses the ability to

deduct such loss for tax purposes. These are the businesses that lose in an inflationary environment.

This was so significant in the two decades, when adjustment for inflation was not allowed, that many companies placed actions in courts arguing that inflation created artificial income tax liabilities. In 2009, the Supreme Court of Justice ruled in favour of a taxpayer since the latter could prove that inflation had created an effective tax rate of 62 percent instead of the 35 percent legal one. This was defined as “confiscatory” by the Supreme Court, and tax authorities were mandated to refund the taxes paid in excess. In 2017, the Argentine government allowed companies to partially adjust income tax bases for inflation for fiscal years from 2018.

In the current global inflationary environment, businesses will be exposed to such effects. The Argentine experience may help to understand such dynamics and plan countereffects to minimise tax liabilities that inflation is creating in the short term. i

Winter 2022-2023 Issue | Capital Finance International 127
Author: Sergio Caveggia
By Sergio Caveggia Partner at EY Argentina
"When it comes to income tax, the Argentine authorities benefit from inflation — because deductions, depreciations, tax basis and tax losses are eroded and lose their power to shelter income."

North America

New York City — a Place of Dreams, Gentrification, Financial Dominance, and Challenge for Low-Income Earners

Amsterdam may have been the birthplace of the first stock market, but it is in New Amsterdam — aka New York — where finance has reached its greatest heights.

Brendan Filipovski

Awind that blows through Wall Street, in the shadows of skyscrapers, is felt around the world. New York is the preeminent financial centre, ranked top on many lists and dominant across almost all metrics. Of the five competitive areas and eight industrial sectors measured by the Global Financial Centres Index, New York ranks first in all but one — banking — where it ranks second to Shenzhen. The combined capitalisation of the NYSE and NASDAQ was greater in August 2022 than the next 10 stock markets put together.

It is home to JPMorgan Chase, Citigroup, IBM, PepsiCo, Morgan Stanley and Goldman Sachs. In and out of these offices — as executives or clients — walk millionaires. There are 345,600 of them, and only the San Francisco Bay Area has more billionaires.

The area was once home to the Algonquian people, and a very different place. In 1624, when the Dutch settled Manhattan Island, Beijing and Constantinople were the largest cities in the world. Thanks to its location, rich agricultural land, deep-water port and Dutch heritage, New York quickly became a key point for exporting flour and food to the Caribbean. In return it received raw sugar — and slaves.

In the decades after the founding of the United States, Philadelphia was the leading financial centre. New York was third, behind Boston. It was the Bank of Pennsylvania that largely funded the US War of Independence. Philadelphia had the first federally charted bank (and de-facto central bank) and the Philadelphia Stock Exchange opened 25 years before the NYSE.

But New York slowly overtook both cities. As trans-Atlantic shipping advanced, New York won out because of its deeper port — one that did not freeze over in winter. Once it became the main trade hub for US cotton, tobacco and slaves, it developed economies of scale and specialisations to maintain its lead. These included the development of insurance companies, auction houses, and other financial services.

When the Erie Canal was completed in 1825, opening trade to and from the Great Lakes and the frontier, New York’s domestic ascendancy had been established. A growing manufacturing

sector contributed to its growing financial influence in the late 1800s and early 1900s. Immigration began to increase, and by the 1920s, New York was the largest city in the world.

Immigration created a large consumer market and labour force, and this — combined with the city’s importance as a port — expanded its manufacturing capacity. The clothing industry became the dominant industry from the mid1800s, with printing and publishing second.

With the economic and geopolitical rise of the US, it was inevitable that New York would become the world’s financial capital. During World War I, the Allies turned to the US for food, ammunition, and funding. The US switched from being a borrower to a lender, with New York at the forefront.

And when the NYSE crashed in 1929, the crisis spread to the world.

New York City has maintained its financial importance thanks to America’s economic dominance after World War II, and the greenback’s position as a global reserve currency. While the hollowing-out of the manufacturing sector saw the advance of urban decay in the 1970s and 1980s, New York fared better than Detroit or Philadelphia. Its financial centre, and the growth in financial services and products that started in the 1980s, provided employment and fuelled economic growth.

The city that never sleeps boomed in unison with Wall Street in the 1990s; immigration increased, crime rates dropped, and gentrification began. The city became a “des res” for the rich and famous. The 9/11 attacks in 2001 rocked the city, but did not break it.

Today, New York is seen as one of the country’s cultural and sporting capitals. Along with the

Metropolitan Museum of Art, there are MoMA, Carnegie Hall, and Madison Square Garden. It has 76 Michelin-starred restaurants in 2022, lagging only Tokyo, Paris, Kyoto and Osaka. The pandemic hit the hospitality industry hard, but there are signs of recovery. New York has 10 major sporting teams, including icons such as the New York Yankees and the Knicks; sports radio can be heard at building sites and in taxi cabs throughout the city.

And the Big Apple a top shopping destination. From Fifth Avenue to Macy’s, through countless independent boutiques, there is something for the most discerning shopaholic. Time Out magazine ranks it as the number one city people want to visit — or move to. Despite this, it ranks only 44th in Mercer’s list of mostliveable cities. City critics point to a rundown subway system, astronomical real estate prices, high cost-of-living (seventh on the Mercer list), hot summers and cold winters, and even a lack of internal laundries. Living in New York can be challenging for those on lower incomes. For many, Covid-19 was the final straw; there was a 3.5 percent decrease in population in the 12 months to July 2021. The rich avoided many of the problems with private transport, newer apartments, and weekend houses in the Hamptons. But the Statue of Liberty still epitomises the American dream for citizens and foreign arrivals. The call of New York remains strong.

The dominance of the financial centre is also not expected to dissipate anytime soon. New York has already invested heavily in fintech and blockchain. China may one day overtake the US economy in size, and Shanghai and Shenzhen may eclipse New York in importance. Will the US dollar go the way of the Roman solidus? No empire lasts forever.

Whatever happens, New York’s glow, or afterglow, will surely last for centuries. i

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"It was never built for the comfort and happiness of its citizens, but to astonish the world."
"The dominance of the financial centre is also not expected to dissipate anytime soon. New York has already invested heavily in fintech and blockchain. China may one day overtake the US economy in size, and Shanghai and Shenzhen may eclipse New York in importance. Will the US dollar go the way of the Roman solidus? No empire lasts forever."

PGM Global Inc:

Global Recognition Rewards Niche Services, Transition Management, and a Comprehensive Strategy

PGM Global Inc was founded in Canada as an institutional, agency-only brokerdealer — and for more than half a century, it has provided expertise to institutional clients around the world.

Continual evolution and adapting to changes in the market have allowed the firm to meet the needs of its extensive client base.

“As a private, employee-owned firm, we are committed to serving our global clients — over 200 strong,” says CEO Patrick Belland. “We focus on a few select services: global securities execution, transition management and global portfolio strategy.”

PGM prides itself on a comprehensive offering, and emphasises excellence. “We work with our clients from the initial stage of global portfolio advice through to implementation,” says Mario Choueiri, head of Global Transition Management. Choueiri has been with PGM for 16 years and has guided the firm’s expansion into the US, a process now in its eighth year. “The focus is on rigorous project management, coupled with unparalleled client communication,” he says.

“The success of the business has been driven by commitment and dedication to client goals. We tailor our service offering to best meet our client needs, and always provide full transparency on our pricing and trade execution.”

Aidan Garrib, head of Global Macro Strategy and Research, believes global financial markets are so intertwined that even bottom-up investors need to consider the macro in their investment process. “Our ability to distil the important drivers of financial markets and communicate their impact to investors has never been more important,” he says.

“The opportunity to provide a differentiated global portfolio strategy service motivates our team to provide custom work. Clients’ investment needs have become broader and more complex, driving the need for truly global advice.”

“By combining our services and working together, we’re able to meet those demands and help them to meet their investment objectives and implementation needs.”

Belland adds: “Under the leadership of Mario Choueiri and Aidan Garrib, we offer a client

experience that remains fully transparent and conflict-free.”

Belland has been with the company for more than 30 years, through many changes and challenges. “Respect and communication are the foundation of our culture,” he says. “As a leader, I strive to ensure that employees are included and engaged in our overall mission, making sure that recognition comes from teamwork and client satisfaction.

“By encouraging employee ownership, we strengthen that level of commitment and sense of worth. Having employees bring ideas forward and lead new initiatives creates a broad sense of leadership.

“Communication, respect and recognition provide the opportunity for everyone to be a leader.”

PGM aims to extend its leadership in a niche market by remaining client-centric, and truly global. i

Winter 2022-2023 Issue | Capital Finance International 131
Head of Global Transition Management: Mario Choueiri Head of Global Macro Strategy and Research: Aidan Garrib
"By encouraging employee ownership, we strengthen that level of commitment and sense of worth. Having employees bring ideas forward and lead new initiatives creates a broad sense of leadership."

Customer-Focused, Committed to Secular Growth and Leading B2B Supply Chain

Wesco International was established in 1922 as the distribution arm of Westinghouse Electric and Manufacturing Corporation, a bold new venture by visionary inventor, George Westinghouse.

Today, Wesco (NYSE: WCC) specialises in supply chain and logistics solutions for communications, security, electrical, utility and broadband markets.

With a dedicated team of more than 18,000 associates, Wesco is a supply chain partner to many Fortune 500 companies. With $18.2bn of revenue in 2021 and a 2022 revenue forecast of $21.3bn, the company is number 200 on the 2022 Fortune 500 list. With access to more than a million products from an expansive network of suppliers, as well as dozens of complementary services, Wesco enables its 140,000 customers to be more efficient, productive, and profitable.


In 2020, Wesco acquired Anixter, a comparably sized peer with complementary capabilities and more than $8bn in revenue. The Anixter acquisition was transformational. It provided Wesco a broader portfolio of products and services— and enabled it to become an even more significant channel partner for its suppliers. Wesco’s expanded global footprint unlocked new possibilities for the company and its customers.

“When we combined the two companies, we took the best from each, providing a foundation for us to be the leading, most comprehensive supply chain solutions provider for our customers around the world,” says Wesco chairman, president, and CEO John Engel. “This isn’t just another acquisition story; we built a completely new company. We looked front-to-back across the business, took a bestof-the-best approach, and literally reengineered the entire enterprise.”

The new Wesco adopted a bold mission – to build, connect, power and protect the world, and set its sights on becoming the best tech-enabled supply chain solutions provider in the world.

As a B2B solutions provider, Wesco occupies a critical part of the supply chain for customers and suppliers. And while digitalisation emerged as a disruptor, B2B supply chains have lagged. Engel knew that the new Wesco would need to modernise to keep a competitive advantage. Now, combined with Anixter, Wesco has the size and scale needed to drive sales and margins not previously possible.

With a focus on digital investment, Wesco is building new capabilities and leveraging big data in fresh new ways.

British mathematician Clive Humby coined the phrase “data is the new oil.” His analogy conveys the idea that data, like oil, needs refinement to create real value.

Analytics, then, is key to unlocking the power of the Internet of Things (IoT). Insights, or refined data in the form of descriptive analytics, can give historical context. Diagnostic analytics can explain why it happened, enabling reaction and new solutions. One step beyond lies an even higher level of refinement: predictive analytics, which can foresee customer needs in the future, providing a critical advantage.

“Our digital transformation is well under way and we're innovating across our entire technology landscape,” says Engel. “We are developing and implementing a new technology stack and digital IT architecture. It includes best-in-class digital applications, products, and services that are integrated with our proprietary architecture. It's important to note this is not an out-of-the-box ERP implementation, but a scalable solution of best-in-class applications,” he said.

Engel says this proprietary architecture is built on the foundation of a world-class data lake. “We have a new Master Data Management construct, which is foundational to how we're going to leverage digital. The result will be improved business processes across the enterprise, as well as customer and supplier solutions that we're building. AI and machine-learning are operating against our big data set. This is a breakthrough for our industry and the overall B2B distribution value chain.”


Continuous improvement is a hallmark of John Engel’s leadership and central to how Wesco runs its business. “Wesco was among the first B2B supply chain companies to implement lean and we’ve been at it for nearly two decades,” says Engel. “We have seen tremendous improvements in our operations, and it’s also helped us create a safe environment and one in which people can achieve their maximum potential,” he said. Wesco has reduced its total recordable injury rate by 10.6% since 2020 and consistently performs 6 to 8 times better than its peer group when it comes to safety.

Wesco is making strides on its Environmental, Social, and Governance (ESG) programs, with a commitment to diversity, inclusion, equity, and sustainability. This year and last, Wesco was recognised by Forbes as one of the World’s Best Employers and, in 2021 as one of America’s Best

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WescoInternationalhasstructure,strategy,sustainability and vision — with international recognition flooding in andaplaceontheeliteFortune500list.

Employers for Women. The firm has been included in Bloomberg’s Gender Equality Index for the past four years. It launched five Business Resource Groups for employees; highly engaged teams developing programmes and providing opportunities for all employees to be heard and supported.

“When you are successful in as many businesses and markets as we are, it requires diverse experience, backgrounds and perspectives,” says Engel. “Because we’re interacting with a diverse set of customers, we are laser-focused on nurturing an inclusive, team-oriented, collaborative environment — every day.”

To advance diversity, the company joined the National Minority Supplier Development Council to work with businesses that bring unique ideas and capabilities to help meet customer needs. This brought recognition within Vibrant Pittsburgh’s cohort of Vibrant Champions for 2022.

“Succeeding here really requires people to cooperate,” says Christine Wolf, Wesco’s chief human resources officer. “That’s the only way to ensure that we are able to deliver on-time, and with all the right materials — particularly given the challenges in the supply chain right now.”


Engel sees six trends driving Wesco’s strong financial results; trends that are reshaping the industry — and the world. Electrification; Automation and IoT; Green energy and grid modernisation; 24/7 connectivity and security; Supply chain consolidation, and Digitalisation require complex solutions and a higher degree of expertise than ever before.

“We see really exciting opportunities with these secular growth trends,” says Engel. “The pandemic has been an accelerant, and it’s

making permanent changes to businesses, and how we all live and work.”

Wesco is uniquely positioned to address these needs with a leading portfolio of products, services, and solutions, its leading positions in all three strategic business units, and its global footprint, all powered by digital investment in advanced capabilities.

With decades of experience, Wesco offers consultative supply chain optimisation services for material management, electronic invoicing and vendor managed inventory systems, integrated supply management, and more. It designs and implements cost-reduction programmes while improving supply operational efficiency and resiliency.

“We’re a distributor and a supply chain solutions company, so we sit right in the middle of the value chain between customers and our supplier partners,” says Engel. “Our technical expertise is unrivalled. We partner with suppliers, then we collaborate with customers to understand their needs and create solutions specifically for them. The key ingredient for our continued success has been our intense focus on the customer.”

Wesco’s portfolio of solutions includes:

• Automation to increase efficiency, reduce downtime, improve capacity utilisation, quality and maximise Overall Equipment Effectiveness (OEE) in manufacturing.

• Communications and network infrastructure to support technology and operational applications in businesses, schools, hospitals and other facilities.

• Electrical, lighting, wire and cable: Wesco offers a broad electrical portfolio and unequalled expertise, helping its customers to operate more efficiently and profitably.

• Maintenance, Repair, Operations (MRO) and Safety: Wesco’s diverse, expert teams analyse inventory and safety programmes, design strategies to improve those processes, and partner with customers to implement the solutions.

• Power generation and distribution: Wesco is the supplier of choice for Investor-Owned Utilities (IOUs), public power municipalities and co-ops, and contractors seeking solutions for electrical, transmission and distribution (T&D), and communications product requirements.

• Renewable energy consultation to help customers meet and exceed sustainability goals, drive efficiencies and results, and cut operational expenses.

• Physical security and hardware: Wesco provides full-line solutions of touchless access, mechanical door hardware, physical security, access control and video surveillance. Its experts successfully manage projects from concept to execution, applying end-to-end product, service and technology solutions to satisfy customers’ project needs.


Several of the secular growth trends are being catalysed by public and private partnership

Winter 2022-2023 Issue | Capital Finance International 133
CEO: John Engel. Photo: Elliot Cramer

investments in projects like rural broadband, resilience and modernisation of utility grids, and a greater need for data centres thanks to IoT. Various studies indicate that electrification, grid modernisation, and the shift to renewables is driving utility Capex increases as aging grid assets will require $1.5-2.0 trillion of investment just to keep the current North American power grids functional, while usage is projected to grow at a rate of five times by 2040.

The US and Canadian governments will deliver $100+ billion for broadband infrastructure deployment to help close the digital divide, boost affordable internet access, and support IoT.

And with the recent Infrastructure Investment and Jobs Act, Inflation Reduction Act of 2022, and CHIPS Act in the US there is an expected $1.5 trillion of investment from the American government into sectors where Wesco is well positioned to participate.

Wesco is also participating in the global rise of cloud data centres that enable new ways of working and power 24/7 connectivity for security systems. Industry experts predict the hyperscale data centre segment will grow at a compounded annual rate of more than 20 percent over the next five years. This was a key driver for the business decision to acquire Rahi Systems, a leader in hyperscale data centres - a deal the company closed in November.


While the increase in demand for electrification and broadband is expected to push electrical grids to capacity, the global climate crisis is demanding more renewable energy sources. From electric vehicle charging stations to remote work, Wesco is ready to meet the rising demand for electrification and broadband in this new post-pandemic economy.

In the US, various studies forecast increasing adoption of electric vehicles will change the flow of energy. Utilities will need to ensure the distribution network in the service area can handle the power load precipitating the need to upgrade power lines, increase live voltage capacity, replace transformers, and add new transmission lines.

Wesco has the drive and opportunity to participate in the decarbonisation and renewable energy sectors, as well. According to a McKinsey study, meeting the goals of NGFS Net Zero 2050 will require massive global investment. Capital spending on physical assets for energy and land-use systems will need to rise by $3.5 trillion (about $11,000 per person in the US) per year for the next 30 years, the study reports. McKinsey also expects capital spend to be frontloaded with the highest spend during the next 10 to 15 years.

The study shows that to reach power decarbonisation goals, the global power sector

would need to phase-out fossil fuel-based generation and add capacity for low-emissions power.

Wesco is expanding its capabilities to meet growing demand for energy efficiency and management, renewable energy, sustainable maintenance, repair, and operations. Each sector of the business has the opportunity for growth by providing customers with products and services in support of their ESG goals.

“We continuously evolve to address the needs and challenges of our customers, our suppliers, and the communities we serve,” says Engel. “Our approach to sustainability is twofold. We aim to minimise the environmental impacts of our own operations while we assist our customers and suppliers in achieving their sustainability goals through the products and services we provide.”

Wesco has an established governance structure for sustainability strategy and activation. The board of directors, through its Nominating and Governance Committee, oversees the firm’s material ESG focus. Wesco has set new sustainability goals for 2030, including:

• Reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 30 percent from a 2019 baseline by 2030.

• Reduce landfill waste intensity by 15 percent across our US and Canadian locations from a 2020 baseline by 2030.

• Achieve a 15 percent reduction in Total Recordable Incident Rate (TRIR) by 2030 from 2020 baseline.

• Provide 425,000 hours of safety training and development to employees by 2030.


This October, Wesco was named among the 50 best workplaces for career growth in the inaugural 2022 American Opportunity Index. The index assessed the 250 largest US public companies based on the real-world experience of more than three million of their employees. It is unprecedented in its focus on worker outcomes, rather than corporate policies or practise. Wesco ranked #12 overall in the report.

Through a partnership between The Burning Glass Institute, Harvard Business School’s Managing the Future of Work Project and the Schultz Family Foundation, the American Opportunity Index is a first-of-its-kind corporate scorecard using big data to study the progress of workers in jobs that are open to those without university education.

Wesco has recently focused on expanding opportunities for employees and recruits. It implemented policies geared to bolstering retention, including raising wages and diversifying the workforce. Once entry-level employees prove their aptitude, Wesco exposes them to less obvious opportunities for career advancement. This dedication to talent-development is unusual in wholesaler environments — and has proven successful.

“The employees on our warehouse floor are critical to our business,” says Wolf. “We wouldn’t exist without them.” i

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Wesco distribution center in Alsip, IL. Photo: Wesco

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t was one of the more unexpected outcomes of the pandemic: Waze, the popular navigation app, became less effective. With fewer drivers on the road during widespread lockdowns, it didn’t have a steady flow of data to feed into its algorithms.

This phenomenon was of interest to Sarit Markovich, clinical professor of strategy at the Kellogg School. She’s interested in the relationship between consumer data and public benefit. “That traffic apps became less accurate during the pandemic shows that if you don’t have public data, it’s hurting everyone because there is a public-good aspect to data,” she says.

But the relationship between the acquisition of such data and the public good is a complicated one. Companies can benefit from selling data that individual consumers share while using an app, in which case there’s a large potential commercial benefit to the company — but at a cost, or discomfort, to consumers.

Or an individual user could use an app strictly for their own benefit, such as opening a navigation app to plot a route to the destination but then closing it so it can’t follow you as you drive — a practice Markovich says her father follows. And this, of course, provides no public benefit either.

“That means he gets all the private benefit without contributing to any public benefit, but he’s benefiting from the data others have shared,” Markovich says. This type of dynamic, where people could get the benefit of others’ data without sharing their own, would also apply to contact-tracing apps.

Such scenarios led Markovich to consider who should have more control over consumer data — businesses or users — and when.

From the start, she believed that a nuanced approach would be useful — unlike the blackand-white approaches adopted by many governments. Europe’s General Data Protection Regulation (GDPR) limits businesses’ control over data, while the US gives companies like Google and Facebook relative carte blanche when it comes to collecting and using data.

“But even having more control over our data as consumers has challenges,” Markovich says. “Like when I’m looking at Europe-based

websites to find reading material for my classes, I’m constantly asked if I am willing to ‘accept cookies’, and I’m trying to be responsible with my privacy, but at some point, you just get tired of it and say, ‘Okay, accept all cookies’. So, the control is imposing a cost on the user, and that takes away from the benefits of having that control.”

To take a more systematic approach to understanding how and when to grant users or businesses control over data, Markovich and collaborator Yaron Yehezkel of Tel Aviv University launched a study. They created a model that enabled them to manipulate dimensions including the public benefits of sharing data, and how much discomfort different users felt over sharing specific types. From that framework came a way of thinking about how much control to assign to users or businesses based on potential public benefits and patterns of user discomfort.

“There will always be trade-offs among business, consumer, and public benefits,” Markovich says. “Our work helps businesses and regulators think through those in assigning control over data to businesses or individuals.”


It can be hard for researchers to get data from apps like Waze or contact-tracing programmes to perform an empirical analysis. So instead of relying on consumer data, they built a mathematical model to explore the trade-offs.

The researchers recognised that even on a given platform, consumers will make different data-privacy decisions about different types of information. “You may have no problem sharing your photo or posts on a social-media platform,” Markovich says, “but if the app asks you to share your email address or phone number, that’s where

you’re going to stop. We feel more comfortable sharing some data items than others.”

And those aren’t the only important differences to consider. “How uncomfortable people feel will vary across users, too,” Markovich says, pointing again to her father’s discomfort with sharing his driving data on Waze versus her more accepting stance, from which she derives a benefit: “If I need to change my route mid-ride, it will let me know.”


The collaborators then set out to determine who should get more control over the data — businesses or users — based on the type of differences, or heterogeneity, that was most relevant.

A navigation app such as Waze or Google Maps has little discomfort-related heterogeneity in the data items it collects, since information like your location, route, and speed are all pretty similar. The issue will most likely be associated with levels of discomfort among users.

An app like Facebook would tend to involve differences in discomfort related to specific items. “You may care more about Facebook analysing your photos and knowing who you are interacting with than Facebook following which ads you click on,” Markovich says. “A given platform will involve both kinds of heterogeneities — across users or data items. But one of those heterogeneities is going to be dominant.”

In the model, the researchers considered whether the public benefit associated with the app or platform was high or low — a distinction with important regulatory implications. Navigation apps have high public benefit, as they can let users know about accidents and traffic jams. On the other hand, an app like Twitter has less public benefit when it comes to user data. Providing information on what tweets you read is not necessarily valuable to other Twitter users.


From this understanding of discomfort and public benefit, the researchers developed a framework to help specify control over data.

If public benefit is high and discomfort about sharing varies more among users than across data items, such as the case for navigation apps,

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> It’snotalwaysclearwhetherbusinessesorconsumersshouldhavemorecontrol. ResearchbySaritMarkovichoffersanewwayofthinkingthroughtheproblem…
Kellogg Insight: Whose Data
is it Anyway...? A
Tug-of-War is Under Way
"Companies can benefit from selling data that individual consumers share while using an app, in which case there’s a large potential commercial benefit to the company — but at a cost, or discomfort, to consumers."

it’s best to give the business or platform control over data for greater collective benefit. “That’s partly because users can decide whether to join the platform or not,” Markovich says. But if discomfort varies more around data items, as with Facebook, she believes users should have more control.

“As platforms bundle more data items that you are required to share if you join the platform, the inconvenience factor for users goes up,” she points out.

A case in point is Facebook’s 2021 announcement that users must allow the platform to collect their personal WhatsApp data, including locations and phone numbers, or risk losing their accounts. You may have used Facebook before and felt comfortable sharing your pictures and friendship interactions with the company, but now the company also collects WhatsApp data. Your discomfort level may have gone up, but you need to agree if you want to keep using it.

“This strengthens our finding that if heterogeneity is mostly across data items — I care more about sharing my phone number than sharing my photos — regulators should let users have more control over their data,” Markovich says.


The findings have implications for how best to regulate the use of consumer data.

These questions are especially relevant when public health is at stake. Israel is considering releasing data on individuals’ vaccination status. There’s no easy answer about what’s best or right in such a case, but using a framework like the one Markovich and Yehezkel propose could help leaders think through the trade-offs, with a strong focus on what would drive the most collective benefit.

“They have to consider the trade-offs involved,” she says. “Sometimes, if you take control over data away from users, the users will feel their privacy is being invaded. But at the same time, it may be creating way more public benefit that outweighs those costs.” i

Winter 2022-2023 Issue 137
"As platforms bundle more data items that you are required to share if you join the platform, the inconvenience factor for users goes up."

> Parks and Retired Life: Roaming Americans Find Freedom on the Move

America’s 423 national and 6,600plus state parks provide boundless opportunity for recreation and exploration — and most rely on a committed workforce of both employees and volunteers.

Shari Orr, manager of the National Park Service (NPS) volunteer programme, estimates that nearly 300,000 people give their time and talent — totalling more than six million hours of service — in a typical year. That translates into more than $185m in annual value.

“We truly could not do what we do without them,” she says. “In the realm of all the things that volunteers can do, the possibilities are really as diverse as our nation’s parks themselves. People can volunteer for a day or year-round.”

The national parks range from protected wildlands to historical sites across the continental US and its overseas territories. Volunteer positions are filled by people of all ages, from curious children to retirees with a lifetime of experience. Orr says that one-day events and shorter-term volunteer projects often resonate with younger audiences, as they have limited time to commit. Retirees make up the majority of positions requiring a long-term commitment.

Volunteers can engage in support, education or public-facing programmes. They could maintain trails, rebuild historical buildings or conduct wildlife research. A favourite opportunity for older volunteers in the national parks, state parks and private campgrounds is camp hosting, which requires a commitment of threeto six months and may come with free lodging — including the hook-ups for an RV. For retirees on a budget, that’s a big perk: campsites often range in price from $25 to $150 per night.

Mike Brown and his wife Brenda travel the country as volunteer campsite hosts throughout the year. The Browns have a class-A motorhome — the kind that resembles a tricked-out bus with all the comforts of home. The avid campers started researching opportunities as retirement approached and were taken on at Cooperstown, New York. This is one of the private franchises of Kampgrounds of America.

Brown, a former air-conditioning worker, says that volunteers must be financially selfsufficient. He and Brenda receive social security benefits, and their RV is debt-free — but inflation and high fuel prices are threatening that delicate balance.

The pandemic has caused a steep price increase in RVs, with demand high and supply short. New vehicles depreciate by 20 percent the moment they’re driven off the lot. The best bang for buck is an RV that’s five years old, when the depreciation rate plateaus, and major repairs are less common. A small used travel trailer, pulled behind a truck, could cost as little as $20,000, while a new motorhome could command a six-figure price — on upwards of $1m for a customised model.

Campsite hosts work 24 to 35 hours each week, depending on park requirements. NPS volunteers are required to work 35 hours per week to qualify for free lodging. At the Georgia’s Lake Seminole state park, the Browns put in 24 hours a week (12 each).

Seasonal positions are a hot commodity for the over-55s. The first step is to submit an application and pass the mandatory background check. Orr suggests getting the application in early and remaining flexible with the park selection. Often, better-known parks are flooded with applications for the high season, while lesser-known parks may have more vacancies.

Prospective applicants can search published positions online, or contact their preferred park directly to inquire about available opportunities.

The NPS recruits through, while state parks use their own websites. Retirees can also find volunteer (and paid) positions through partner organisations and private companies such as Xanterra, Delaware North, CoolWorks and KOA.

Volunteers who would like to live and work in a winter wonderland could apply for positions in

Oregon’s Crater Lake National Park, the fiftholdest NPS site and home of the deepest lake in America. Crater Lake, formed by the collapse of an ancient volcano, is surrounded by oldgrowth forests and is considered to be the world’s cleanest large body of water.

The park is seeking two volunteers to start in early February, splitting time between the park headquarters and leading snowshoe tours. Volunteer benefits vary by location and position. The Crater Park gig comes with private room in a shared cabin.

Orr says that the Trails and Rails programme, a partnership with Amtrak and the Department of Recreation, Park and Tourism Sciences at Texas A&M University, is another favourite for volunteers 55+ who love to travel. Volunteers hop on a train and educate fellow travellers on cultural, natural, and historical areas they travel through. The programme has been running for 22 years and includes 13 routes.

The NPS’s Artist-In-Residence programme allows visual artists, writers, musicians, and other creative souls to immerse themselves in inspiring settings. Residencies typically run two to four weeks and include lodging. Artists can share their work with the public via park programmes.

Volunteer positions are an ideal avenue for younger audiences to expand skillsets and build valuable resume experience and an ideal opportunity for older volunteers to share their skills and expertise in a new way. If paid employment is of interest, Orr encourages retirees to check out the NPS Experienced Services Programme, which offers temporary employment on specific projects for over 55s. i

138 | Capital Finance International
By Heather Smith Crater Lake Neil Adams Big Cypress National Preserve Carol Miltimore, roving trail volunteer at Mt Rainier National Park Education Program at National Mall and Memorial Park at WWII Memorial

Air Austral operates daily flights from its Reunion Island’s hub to Paris. It offers also flights to South Africa, Mayotte, Mauritius, Seychelles, the Comoros, Madagascar, India, Thailand … so many dreams destinations.

Winter 2022-2023 Issue | Capital Finance International PARIS Perth Bangkok Chennai Fort-Dauphin Tulear Diego Anjouan TANZANIA Dar es Salaam Moron i Nosy Be Tamatave EUROPE FRANCE MADAGASCAR SEY CHE L LE S MAYOTTE ROD RIGUES AUSTRALIA THAILAND Joh annesburg Majung a Saint-Denis Saint-Pierre MOZAMBIQUE Pemba (1) Antananarivo ASIA INDIA REUNION ISLAND MAURITIUS SOUTH AFRICA COMOROS Air Austral The French Airline in the Indian Ocean (1) waiting for programming Air Austral subsidiary In codeshare with Operated in partnership with (1) (1)
With Air Austral, go discover the Indian Ocean
140 | Capital Finance International

Cybersecurity Heroes: Cometh the Hour, Cometh the Geek

This is the story of John Moran, who has channeled problem-solving, lifesaving and protection skills gained as a police officer, firefighter, EMT, and Homeland Security Task Force member into his role as technical leader for Tufin - The Security Policy Company.

Police officer, firefighter, incident response veteran, and IT geek - spot the odd one out? Or do they all have a lot more in common than you might think…

When John Moran was young, he wasn’t hacking into NASA. Nope. He was dreaming of becoming a firefighter or a policeman. Jobs that keep people safe. So perhaps it’s no surprise that after a varied career in IT, public safety, computer forensics, and incident response, he was drawn to join Tufin - helping to create products and solutions that protect critical national infrastructure and key organizations.

Tufin? Nothing to do with fish or fins. Described as ‘the’ security policy company – Tufin is renowned for its ability to deliver better visibility, automation and easier compliance for large complex enterprises and critical national infrastructure and it serves vertical markets such as utilities, banks, insurance companies and telcos.


Moran has had a unique career path, but there was a natural flow. His passion for public safety began at high school - he worked first as a volunteer firefighter, then as an EMT. “After high school I wanted a career in law enforcement, so I began working as a full-time emergency dispatcher and part-time police officer to gain experience,” he explains. “While working nights as a dispatcher there were some manual processes that I thought we could improve, so I taught myself some simple Visual Basic and starting writing software. That really sparked my interest in IT and later earned me a job offer from the County’s IT department,” says Moran.

“My first exposure to computer forensics was during a computer networking class, and I immediately knew I needed to learn more. Computer forensics was the perfect mix of the investigative aspect of law enforcement I enjoyed and the deeply technical skills I had been developing. A BS in Computer Forensics and a few certifications later and I was fortunate enough to earn a spot with the Maine State Police Computer Crimes Unit,” says Moran.

Moran investigated a whole range of cases from child exploitation, to hacking, and homicide. “My programming and network experience gave me a unique skillset, which I was able to leverage working on cases with the US Secret Service and

as a member of a US Homeland Security Human Trafficking Task Force,” he explains.

“It was the work I did with the Secret Service that sparked my interest in breach investigations and incident response. I decided I wanted to pursue incident response in the private sector, so I returned to school, earning an MSc in Information Assurance,” explains Moran.

Moran’s first role in the private sector was as an incident response analyst for a global consulting company. While the technical work was largely the same, this was his introduction to the business of security and incident response. “There is a part of me that is always asking ‘how can we do this better?’. Whenever I had an idea, the response was always the same: ‘talk to product management’. That’s what led me to go back to school one last time for an MBA and to pursue my next career in product management.”

Moran then went on to work as a Senior Product Manager for a Security Orchestration,

Automation, and Response (SOAR) provider. It was there that he was first introduced to Tufin. “We created an integration between our SOAR solution and Tufin, and I could immediately see the incident response value”, says Moran. “The network visibility Tufin provides, the ability to perform network path analysis queries – this is data I wish I had when I was performing incident response consulting.” When a position opened at Tufin a little later, Moran jumped at the opportunity.

“Joining Tufin has given me an opportunity to evangelise our value to enterprise SecOps teams. Although many think of Tufin as a security policy management company, the level of visibility we have into the network gives us the ability to help assess and measure risk in unique ways. That is what really gets me excited about what we do at Tufin”, he says.


Unlike decades ago, it’s less about bragging rights. “These days, it’s less about who can hack the ‘unhackable’ - there's much more of a financial motivation to hacking,” says Moran. “The biggest challenges today are protecting legacy infrastructure - where the focus is trying to replace what you can and securing what you can't replace. It's all about prioritising risk, and it's a continuous evolving process.”

What are the biggest threats are out there at the moment and what's currently exposed? “Critical national infrastructure is always a target, and within that there has been a noticeable spike in attacks on healthcare,” notes Moran. “Recently Gartner talks a lot about CTEM, continuous threat exposure management,” says Moran. “The question that CISOs tend to ask is, "What is the most likely to get me on the news?!" Tufin allows enterprises to combine vulnerability data with network data to see which vulnerabilities are contextually exposed to untrusted networks and thus pose the greatest potential risk. That's what is really important for a CISO - not that a risk exists, but that it's exposed,” he explains.

“Tufin is not focused on any one vertical. We have customers in finance, manufacturing, critical infrastructure, retail, government, healthcare, and many other industries. What our customers have in common are some of the most complex, hybrid, and geographically distributed networks in the world. Networks for which downtime or a security incident can result in millions of dollars in losses or even impacts to health and safety. Delivering accurate and reliable visibility, compliance, and automation for such critical networks is something that I, and everyone at Tufin, take tremendous pride in”, says Moran. i

Winter 2022-2023 Issue | Capital Finance International 141
Technical Director, Business Development, Tufin: John Moran Moran as security.

Profits Over People in US Housing Crisis

Housing is treated like a commodity rather than a human right in most of the world. Decades ago, the US signed international covenants that recognise decent, safe and secure housing as a crucial component to an adequate standard of living. But the country has done little to protect that right, unlike France, Scotland and South Africa, which have addressed housing rights at the constitutional and legislative level.

According to a recent report from Freddie Mac, a government-sponsored enterprise that buys, pools and sells home loans as mortgage-backed securities to private investors, the housing supply deficit in the US in late 2020 had risen to 3.8 million units — about 52 percent higher than 2018.

The root of this deficit reaches back to the housing bubble and global financial crisis of 2008, which Wall Street and the US Federal Reserve both played a hand in causing. The Fed set the stage by lowering the federal funds rate from 6.5 percent in May 2000 to 1 percent in June 2003 — the lowest in 45 years. Wall Street fuelled the flames by pushing cheap credit and lax lending standards.

Subprime borrowers, those without income or assets, were easily approved for home loans, only to default in record numbers after the Fed began inching up the interest rates. When the housing bubble burst, it sent reverberations across the global financial system. Ordinary citizens paid the price, as the government opted to bail out banks rather than consumers and small businesses.

Emerson Claus, the president of the Home Builders and Remodelers Association of Massachusetts, was working in Florida when the bottom fell out. He says it was a “bloodbath”, and many homebuilders went under. As business slowed, scores of tradespeople left the industry and got retrained for other fields. Workers became harder to come by, and even after Americans started buying homes again, the slump in building persisted.

Claus says the pandemic has exacerbated an already difficult situation. One door recently took

six months to arrive; ordering a new dishwasher could take up to a year.

Home ownership is a far-fetched dream for those who are struggling just to pay rent. The US Census Bureau reported a national poverty rate in 2021 of 12.8 percent, with significant variance between age groups and regions. The poverty rate for people under 18 was 16.9 percent and 10.3 percent for those 65 and over. State poverty rates ranged between 8.1 percent and 27.7 percent.

Rent is growing faster than wages, according to data from the American tech real-estate marketplace group, Zillow. For minimum wage workers, there isn’t a single county in the US where they could afford a modest two-bedroom rental home.

According to Redfin, a technology-powered real estate brokerage, the median monthly asking rent in the US surpassed $2,000 for the first time in May 2022.

“More people are opting to live alone, and rising mortgage-interest rates are forcing would-be homebuyers to keep renting,” said Redfin deputy chief economist Taylor Marr. “These are among the demand-side pressures keeping rents skyhigh. While renting has become more expensive, it is now more attractive than buying for many Americans this year as mortgage payments have surpassed rents on many homes. Although we expect rent-price growth to continue to slow in the coming months, it will likely remain high, causing ongoing affordability issues for renters.”

HUD (the US Department of Housing and Urban Development) defines cost-burdened families as those “who pay more than 30 percent of their income for housing” and “may have difficulty affording necessities such as food, clothing, transportation and medical care.” Severe rent burden is defined as paying more than 50 percent of one's income on rent.

In 2019, 23.4 million Americans lived in households that paid more than half their income on rent and utilities. According to the Harvard Joint Centre for Housing Studies, the national stock of available rentals rose by 13.3 million units from 1990 to 2019 — but availability at the lowest end of the price range fell by 3.9 million units. The country only has 7.4 million affordable housing units, but those homes are often taken off the market by households with more buying power. Low- and very-lowincome households have claimed 2.1 million

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Home ownership is a cornerstone of the American dream and a key step in building generational wealth. But that dream is being threatened by a perfect storm of contributing factors, including supply issues, inefficient public policies, inflationary pressures and predatory practices by private equity investors
"Home ownership is a far-fetched dream for those who are struggling just to pay rent."

affordable housing units; middle- and abovemedian-income households have taken another 1.3 million units off the market. Barely half of the available affordable housing stock is left for extremely low-income households.

According to the National Low Income Housing Coalition, no state has adequate housing for its lowest income renters. Average statistics show only 36 affordable rental homes available for every 100 extremely low-income renter households. In Nevada, where 81 percent of the population qualifies as extremely low-income renter households with severe cost burden, the figures are 18 out of 100. California trails a close second in this list, with severe cost-burdened households accounting for 76 percent of population and 23 affordable rental homes available per 100 extremely low-income renter households. These households fare only marginally better in the south east of the US — specifically West Virginia,

Alabama, Mississippi and Kentucky — where over 60 percent of the population suffers severe cost burden and the availability of affordable rental homes meets slightly more than half of the need.


Private equity investors are replacing momand-pop landlords and individual-owned rental companies; residents are suffering the consequences. A decade ago, about a third of the 35 largest owners of multifamily apartment buildings were backed by private equity firms. By 2021, half of them were. According to analysis from ProPublica, private equity firms benefited from 85 percent of Freddie Mac’s biggest apartment complex deals.

Greystar, a real estate developer and manager with operations in nine countries and $59bn in AUM, topped that list. When Greystone took

over the Olume building in San Francisco, Daniel Cooper, a former resident, expected his rent to rise but not for the quality of life to deteriorate. “Our building was recently acquired by a new firm which has shown nothing but contempt for existing residents,” Cooper posted online, “and a desire to increase profits.”

Rental renewals, fees and penalties saw a steep increase, while trash collection, cleaning services and security measures were cut back. The building began to fall into disrepair. When the boiler went out, some renters were forced to heat bathwater on the stove or shower at a friend’s place. When large appliances needed repair or replacing, tenants were told to wash laundry in unoccupied apartments.

“We would be told for weeks on end that requests for repairs were awaiting corporate approval,” Cooper said. | Capital Finance International 143

After numerous tenants filed complaints, the city had to issue an abatement order before the building’s violations were finally addressed. Before Greystar took over, the building was owned and managed by Monogram Residential Trust, a publicly traded real estate investment trust. Under Monogram management, any building malfunctions were resolved within days, without needing repeated complaints, visits from an inspector or a municipal hearing.

Bob Faith, the founder and CEO of Greystar, boasted in a 2010 interview about his ability to squeeze money from real estate investments. “Many times we take over an asset that perhaps was managed by a smaller organisation that hasn’t been focused on the bottom line. We can drive dramatic savings out of the expense side of the equation, even in a flat or slightly declining market.”

Freddie Mac provided Greystar with a $1.8bn financing package to acquire the Olume as well as other apartment buildings across 10 states. The deal closed in 2017 and set a new record for the biggest loan Freddie Mac had ever extended to a single borrower. According to data from Freddie Mac, Greystar achieved a 24 percent spike in profits between 2018 and 2019 by shrinking expenses and raising revenues.

In response to recent bad press, Greystar issued the following statement: “Resident satisfaction is very important to us, and we regularly survey our residents to gauge their level of satisfaction, to help us address issues and identify opportunities to make improvements in our services.”

After nearly doubling its portfolio of apartments between 2016 and 2021, Greystar has become the sixth largest owner of apartment complexes in the US.

PRIVATE EQUITY PREYING ON THE MOST VULNERABLE Meanwhile, the homes of some of poorest people in the US are being bought by the some of the biggest private equity firms, like the Carlyle Group, TPG and Blackstone — often using taxpayer-backed, low-interest loans from Freddie Mac and Fannie Mae.

There are around 20 million Americans living in manufactured homes, many of whom rely on fixed income from social security and disability benefits. According to Fannie Mae, more than a quarter of manufactured home owners and over a third of renters are trying to make-do on less than $20,000 a year.

Unlike brick-and-mortar homes or apartments, a manufactured home doesn’t make for a good investment. The value depreciates over time, similar to a car. Within a few short years, a $50,000 mobile home might be valued at only $10,000. Manufactured homes are financed through high-interest “chattel” loans and don’t qualify for the same tax benefits as site-built homes or apartments.

About a third of mobile home residents own their homes — but few own the land underneath it. Most manufactured home residents live in communities where they pay monthly lot rent.

Before corporate investors got involved, lot rent rarely increased more than four to six percent annually. Some residents hadn’t seen a price increase in years. Now, many residents are reporting increases of 10 to 25 percent, while others are slammed with lot rents that have doubled or tripled.


Manufactured homes are frequently called mobile homes, which is only a correct nomenclature when the homes come from the manufacturer or dealership. But after years of residency, moving them becomes increasingly cost prohibitive. Once they’ve been put together, 80 percent of mobile homes never move again. Attempting to move a mobile home could cost between $5,000 and $20,000 — if it can be moved at all.

Frank Rolfe and Dave Reynolds rank as the fifth largest owner of mobile home parks in the US, with a $500m portfolio including over 21,000 lots. They also co-founded Mobile Home University, which tours the US delivering courses on how to extract the highest profits from captive residents. Rolfe was recorded encouraging park landlords to be “heartless” with customers. If residents object to rent hikes, they can walk, but they’ll have to abandon their home. Then the landlord can recycle the property and rent it out to someone else. “You really hold all the cards,” said Rolfe. “So, the question is, what do you want to do? How high do you want to go?”

Rolfe shares tips with would-be investors for free through an online forum, monthly newsletters and weekly podcasts. He also offers a bootcamp version of the course, complete with trailer-park bus tours and warnings not to be “turned off” by residents’ low-class living standards.

“One of the big drivers to making money is the ability to increase the rent,” Rolfe explained in an audio seminar. “If we didn’t have them hostage, if they weren’t stuck in those homes in the mobile home lots, it would be a whole different picture.”


Resident-owned communities are one solution to private equity’s invasion of America’s trailer parks. ROC USA, a non-profit social venture founded in 2008, has been helping mobile home residents take ownership of their communities. It currently works with 304 resident-owned communities nationwide.

If Congress were truly concerned about addressing the affordable housing situation, it could pass laws granting residents a Right of First Refusal (ROFR) and allowing them sufficient time to raise the necessary funds to purchase their home. Despite calls from advocates, it has yet to exercise that power.

In the meantime, prospective tenants might negotiate a ROFR clause with their landlord, essentially giving them first dibs on buying their home if the owner ever decides to sell. These clauses are uncommon, but not unheard of.

In 1980, Washington DC passed the Tenant Opportunity to Purchase Act (TOPA), requiring that tenants be given the first opportunity to purchase their building if it’s going to be sold. The law is credited with helping to preserve some measure of affordable housing in the capital city, creating nearly 100 limited-equity cooperatives that provide over 4,300 units of affordable housing. Proponents claim TOPA gives residents collective bargaining power and better access to funding sources. It also helps to prevent gentrification and the displacement of working-class citizens, lessening the socioeconomic divide between owners and renters. Nonprofit Quarterly points out how the disparity in DC — like most the US — is compounded by race, as most of the city’s low-income households are ethnic minorities.

Other cities — like San Francisco, Boston, New York and Minneapolis — have begun to introduce similar tenant protection initiatives.

Rent stabilisation or rent control laws can also protect residents by freezing rental prices or capping rental increases. As of 2022, there are only six states — California, Maryland, New Jersey, New York, Oregon and Minnesota — and the District of Columbia that allow municipalities to enact rent control policies. Manufactured homes are excluded from these protection policies. Meanwhile, over 30 states have passed legislation banning rent control initiatives.

But even in cities with rent control protection, tenants can face harassment from landlords seeking to force them out. Some take advantage of loopholes that allow them to sell the building if rent-controlled occupancy falls below a certain threshold. Tenants recount

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horror stories of unfounded eviction threats, non-stop construction, shut-off utilities, neglected repairs, buy-out coercion and refusal to accept rental payments.

The Federal Housing Assistance programme (including Housing Choice and Section-Eight vouchers) could help lower-income households by covering housing expenses that exceed the 30-percent marker. But the programme is massively underfunded, and qualified applicants can wait years before being approved. Federal rental assistance is provided to 5.2 million American households, but it still falls short. Only one in four households in need receives assistance. Poverty is stigmatised and many

landlords refuse to accept federal assistance housing vouchers.

If residents fall behind on rent, they can be evicted. A Colorado study found that lawyers represented 89 percent of landlords in eviction cases, while less than one percent of tenants benefited from legal counsel. An eviction conviction stays on a person’s record for life, which can give landlords an excuse to refuse prospective tenants and ultimately push families into homelessness.

New York enacted legislation to ensure tenants’ right to counsel during eviction cases, leading to a 41 percent decrease in residential evictions from 2013 to 2021.

Meanwhile, Bob Nicolls, owner of Monarch Investment and Management Group, has been deemed the “Wolf of Main Street” by Bloomberg for using evictions to drive up rents during the pandemic.

“We have an unprecedented opportunity to really press rents. The country’s highly occupied; we’re at 97.5 percent. And so, where are people going to go? They can’t go anywhere. We have a tremendous opportunity to press on renewing leases for existing residents and to reset market rates — which we’ve reset numerous times even this year,” Nicolls said in a videotaped meeting with investors in September 2021. i

Revenue Management Software Causing Collusion Concerns

“We are concerned that the use of this ratesetting software essentially amounts to a cartel to artificially inflate rental rates in multifamily residential buildings,” Democratic senator Amy Klobuchar wrote to the US Department of Justice in November, calling for “appropriate action to protect renters and competition in the residential rental markets”.

According to an investigation by ProPublica,

pay more than they can afford to keep a roof over their heads.

Jay Parsons, a vice president of RealPage, told convention visitors in 2021 that rents had increased by as much as 14.5 percent in some areas. Another executive, Andrew Bowen, boasted RealPage’s software could be responsible for driving that surge: “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”

Now legislators are beginning to question whether the software is breaking antitrust laws and contributing to the country’s affordable housing crisis.

When RealPage acquired its only significant competitor in 2017 — after receiving blessing from the DOJ antitrust division — it doubled the number of rental units it prices and expanded the cache of data needed to feed its algorithm.

Jeffrey Roper, one of the scientist responsible for developing the software, was surprised the DOJ let the acquisition go through. “Analysis of housing must consider the root causes of supply-demand imbalances while reconciling with the broader welfare needs of the populace. Personally, I find the expectation that commercial asset owners should choose to forego market opportunity in favour of altruism to be incredibly naive.

“It is capitalism 101 rather than an insidious plot,” Roper clapped back in response to the investigation.

He defends the algorithm against the accusations of collusion, claiming the optimisation routines are based on supply and demand. The software makes a recommendation based on the data, but landlords aren’t forced to apply the price change and tenants have a choice whether to pay the rental price or search elsewhere. An off-site algorithm takes the emotion out of the equation. Roper found that there was “way too much empathy going on” when leasing agents were onsite and peers of the tenants.

But ProPublica says RealPage landlords, many of whom are private equity investors, tend to welcome the price-hike recommendations. Only 10 percent of its clients challenge the algorithm’s need to beat the market. For example, a couple in Seattle saw a 33 percent jump in their rent at a RealPage-priced building, compared to only 3.9 percent for something similar in a non-algorithm-priced building.

“One of the defining characteristics of housing markets in the last 40 years has been rents increasing faster than wages,” wrote Ben Teresa, co-director of the RVA Eviction Lab at Virginia Commonwealth University. “The problem is quite precisely that people are paying rents they can’t afford.” i | Capital Finance International 145
Texas-based tech firm, RealPage, is being accused of colluding with landlords to inflate rental prices. RealPage advertises the software as a pricing optimisation algorithm that can outperform the market up to five percent, putting more money in landlords pockets. tenants are being pushed out or forced to


What Will It Take to Achieve UN’s Sustainable Development Goals?

One of the key elements is securing enough capital. Development finance providers are working to mobilise commercial finance. They are designing blended finance instruments and mechanisms, and supporting the issuance of debt instruments such as green, social, and sustainability linked (GSS) bonds.

The OECD DAC Blended Finance Principles guide the action of development finance providers and help to guarantee that efforts are rooted in robust, locally owned development objectives and priorities.

Mobilising finance alone is not enough. To achieve sustainable development results, development finance providers must measure and manage development impact of investments.

But how?

Investment decisions are still being taken with inadequate information about their social and environmental effects. Despite new taxonomies, reporting standards and impact principles, the market is increasingly confused. That means an increased risk of “impact washing”.

As a standards setter, the OECD is conscious of this. This is why, when we developed the United Nations Development Programme Impact Standards for Financing Sustainable Development, we decided not to go it alone, or in a silo. We opted to co-create them with the UNDP and some 300 experts from development finance institutions (DFIs), the private sector, and civil society organisations.

We knew that this was just the first step. To ensure development finance would achieve its full potential, we must work with other standardsetters and maximise coherence across our joint efforts.

What should this collaboration look like? Do we all need to agree on one set of standards? And if so, what should they cover? What do development finance practitioners ultimately need?

To try to answer these questions, on September 30, 2022, we gathered standards setters and practitioners at the OECD for an in-person

conference titled Finance United: Impact Investors, Financial Service Providers and the SDGs. We co-organised the event with the Social Performance Taskforce (SPTF), and had the opportunity to hear from the UNDP SDG Impact Team, Social Value International (SVI) and the International Sustainability Standards Board (ISSB)) and practitioners (such as iDB Invest, the UN Joint SDG Fund, the US DFC, and the Global Steering Group on Impact Investing.

These groups focused on market needs, and how we can collectively deliver. We had donors, DFIs, financial service providers and CSOs around the table to discuss the alignment and implementation of standards.

Here are some of the key takeaways: 1. Address culture and mindset to bring about changes in practice. In the past 12-18 months, the conversation around impact reporting has accelerated, and there has been harmonisation and consolidation among standard setters regarding transparency and external reporting. This led to the establishment of European Financial Reporting Advisory Group (EFRAG). Despite this, the acceleration in reporting standard risks pushing “impact” to become an “add-on” unless it is coupled with changes at the organisational level. Development finance providers have to change the way they embed impact into their organisations, across all levels, to become impact-orientated and achieve real development results. Only then will impact become part of organisational culture.

2. Focus on decision-making, not metrics. Impact standards are designed to be a universal approach for how development finance providers, public and private make decisions. They focus

on the internal decision-making process, the mindset shift needed to bring impact into the decision-making process.

Impact standards shift the focus from a mere metrics-led compliance to generating development results that are embedded, and therefore last. This mindset shift is what is needed to avoid SDG-washing, but also to reorientate development finance providers from a risk-return logic to a risk-return-impact logic.

We need to develop a different starting point — “How can we create more impact? Are we creating enough positive impact?” — rather than “How much impact have we created?”

We need to collect data and build on that. It is a journey to build systems that are robust.


3. Unite in diversity. Standards setters cater to different audiences. Different groups of stakeholders use different words and ideas (such as human rights, capital, sustainable development) — yet we all use the word “impact” to describe our goal. We have to recognise this diversity of positions and accept that we will never have a single impact management standard that fits all actors.

December 2018

We need to be clear about what we are referring to. Companies and investors see all these different initiatives and think there should be consolidation, but different sets of standards are focused on specific groups of actors, with management frameworks, metrics, and taxonomies for different constituencies. Our engagement with the UNDP grew out of the Impact Management Project (IMP). We saw there were gaps between various principles and frameworks, and these extended into the decision-making processes.

We decided to work on that particular gap, and develop standards for the SDGs that would bring the same language to different actors who have operated in different ways, and with different focuses. We have been mindful of each other’s work and have been increasingly converging in the various pieces of the puzzle.

While catering to different audiences, and using slightly different language, the impact

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Achieving the UN’s Sustainable Development Goals (SDGs) requires financial and non-financial investment to discover sustainable development pathways.
MSCI Meggin Thwing Eastman, Paul Horrocks,
"Investment decisions are still being taken with inadequate information about their social and environmental effects. Despite new taxonomies, reporting standards and impact principles, the market is increasingly confused."

management standards promoted by the OECD, UNDP, SPTF and SVI all promote the same values. They all focus on supporting organisations in embedding impact considerations into their strategy, management approach, governance, and transparency. They all push for more intentionality in impact.

4. The proof of the pudding is in the implementation. The September 30 event showed that, as standard setters, we are harmonised at a high-level, on the key messages. Although this is an excellent first step, we won’t stop here. We realise that there isn’t yet harmonisation on implementation. Organisations are not consistently implementing the standards. The standards will only make a difference if they ignite a real change in mindsets, based on intentionality and collective learning. This is why we have to move from Standard setting to implementation — and during the conference

discussions in September, we focused on case studies to show how organisations are using and implementing the standards, the challenges they face, and what they have learned so far.

While harmonisation is important, it is also important to adapt to relevant contexts. Standards need to be tested and improved through the same consultative process that was used to develop them, through multiple iterations with a diverse range of stakeholders who act as a learning community. This helps us to challenge all development finance providers to do more and better, and to be ambitious on their development impact results.

5. Context matters. Not all development actors can implement standards in the same way. In developing countries, efforts must made to avoid the unintentional creation of more barriers. The standards aim to encourage investors to use ESG

criteria not as a tool to exclude potential investee with low scores, but to support organisations to improve, and take them on a journey to become more ESG-savvy. Impact data which is important for development finance actors may not be available in developing countries, requiring that the data are created before investees are asked to collect and report.

The conference conclusions highlighted a number of gaps in ensuring impact in developing countries, and the need for guidance to support the OECD UNDP Impact Standards for Financing Sustainable Development.

The overarching message was that for SDG delivery, impact standards are vital in developing countries. Achieving this would help to reduce transaction costs, facilitate the aggregation of assets, and potentially mobilise greater volumes of capital. i | Capital Finance International 147
"We need to be clear about what we are referring to. Companies and investors see all these different initiatives and think there should be consolidation, but different sets of standards are focused on specific groups of actors, with management frameworks, metrics, and taxonomies for different constituencies."
Photo: © Andrew Wheeler

Asia Pacific

Hear the Merlion Roar! Tiny City-State Defying China’s Bid for Regional Superiority

Brendan Filipovski Singapore

merlion, if you were wondering, is a mythical creature with the head of a lion and the body of a fish — and the national symbol of Singapore.

There is certainly a leonine quality to the city state at the southern tip of the Malay Peninsula: it punches above its weight in terms of financial services and lifestyle. But can it maintain its global and regional status in the face of competition from Chinese cities like Shanghai and Shenzhen?

Singapore is the leading financial centre in the Asia-Pacific. It ranks third in the Global Financial Centre Index 2022, has overtaken Hong Kong in the last year, and trails only New York and London.

Singapore is well-rounded across several categories. It is ranked third in terms of forex turnover by country (BIS), fourth in the number of ultra-rich residents (Henley), third for financial secrecy (Tax Justice Network), and 10th in fintech (Findexable). It has a competitive top corporate tax rate of 17 percent, which is almost nine percent lower than the US. It also has the largest regional REIT market outside of Japan.

Being a city-state, it isn’t the headquarters for many multinationals and its stock market capitalisation ranks only 21st (WFE) — but it is home to 2,492 subsidiaries and stakes a claim as a leading location for Asia-Pacific headquarters. Singapore has long enjoyed being a natural entrepôt; it links the Strait of Malacca with the South China Sea. It is a resource gateway for petroleum, tin and rubber.

Sir Thomas Stamford Raffles “discovered” it as a small fishing village and recognised the potential of its location. He established a trading post there in 1819. That post grew, and attracted the attention of the British authorities; it became a crown colony in 1867, along with Malacca and Penang. Trade boomed after the establishment of Suez Canal in 1869. With the growth of trade, financial services began to develop. Currency, maritime insurance, and trade finance companies grew along Singapore’s waterfront, which now comprises its financial district.

After its independence from Malaysia in 1965 — and the establishment of the government of Lee Kuan Yew and the People’s Action Party (PAP) — Singapore began to truly emerge as a leading global financial centre.

Lee successfully implemented a series of industrial plans that attracted foreign investment and turned the country into a regional manufacturing and free-trade hub. In its first 10 years of independence, Singapore

averaged real GDP growth of 11.4 percent and was hailed as an economic miracle.

Lee leveraged this natural growth to grow financial services. The Asian Dollar Market was established in 1968 to take advantage of the gap in global trade from the close of the American markets to the opening of those in Europe. The local Central Provident Fund (CPF) pension fund, established in 1955, has sometimes been used to top-up local capital markets — as it was in the 1986 recession. The Singaporean dollar was floated in 1973 and exchange controls were liberalised in 1978, ahead of many other countries. Another strategy, from 1987, was selling government securities to banks to aid their liquidity needs — although the Singaporean government maintains a regular surplus and has no need to issue securities for funding.

The government played a key role in establishing world-class institutions to regulate and run financial services, including the Monetary Authority of Singapore (MAS) in 1971, and the Stock Exchange of Singapore in 1973 (it later became the Singapore Exchange — SGX — after merging with the derivatives exchange), and the Singapore International Monetary Exchange (SIMEX).

The late 1980s marked the internationalisation of Singaporean finance. The 1984-85 recession and financial liberalisation in competing financial centres such as Tokyo and Sydney led to reforms. Foreign banks were given greater scope and stockbroking was opened to domestic and foreign banks. An asset-management industry was developed. Local banks were encouraged to combine to compete against foreign institutions. The secondary listing of foreign stocks bolstered the local market.

In the 1990s, the city state cultivated the private wealth market and positioned itself as a destination for Asian HNWIs. This included the adoption of banking secrecy laws and the establishment of the privately-owned Le Freeport, a high-security vault service for the storage of valuables, including gold, gems, and artwork.

In recent years, the government and MAS have invested in digital financial infrastructure and regulations, including the development of fintech hubs, and bolstered anti-money laundering initiatives.

On September 15 this year, MAS launched its Financial Services Industry Transformation Map 2025. Emphasis is given to the development of the insurance, private capital, and fintech sectors.

The development of Singapore has also been spurred by its investment in education and attracting migrants with key financial skills and networks. In the latest PISA report by the OECD, Singaporean high school students ranked second in the world in reading, science, and maths.

But Singapore is more than a financial centre. It has become a tourist destination and a desirable location for expats. Attractions include Sentosa Island, Marina Bay Sands, Orchard Road shopping district, and the Singapore Zoo. Singapore airport is one of the world’s biggest and best. Despite its high-rises, 47 percent of its land area is covered by trees, and there are plans for a 1,300km cycle path network.

It is ranked fifth in the region for its quality of living (Mercer) and boasts the second-most efficient healthcare system in the world (Bloomberg), the second-best high school education, and the top urban mobility. It is regularly voted the safest city in the world and boasts a lifestyle with a unique mix of regional cultures.

It is, however, expensive — ranked eight on Mercer’s cost-of-living index. Prime rentals are only slightly cheaper than Monaco, Hong Kong, London, and New York. Workers face the second-longest working hours in Asia (after Hong Kong), but benefit from the 11th-highest average monthly salaries in the world.

Singapore keeps reinventing itself in the face of strong competition from the Chinese state, which has invested heavily in Shanghai and Shenzhen. The pandemic and the strict zero-Covid measures in China have perhaps given Singapore breathing space. But to maintain its advantage, it must continue to innovate. i

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"Singapore is the leading financial centre in the Asia-Pacific. It ranks third in the Global Financial Centre Index 2022, has overtaken Hong Kong in the last year, and trails only New York and London."
"Singapore keeps reinventing itself in the face of strong competition from the Chinese state, which has invested heavily in Shanghai and Shenzhen."

La Trobe Financial: On Top Down Under

With over $15bn in AUM, La Trobe Financial is one of Australia’s foremost credit asset managers, specialising in credit investment solutions and real estate finance.

The firm has been a proven and trusted partner for institutional investors for seven decades, and operates Australia’s largest retail credit fund for more than 82,000 retail investors.

La Trobe Financial Chief Executive Officer Chris Andrews says there have been “plenty of challenges” for investors over the past 20 years: the Global Financial Crisis, wild swings in economic, property, and business cycles, and the more recent COVID pandemic.

“Throughout all of these challenges,” he says, “we’re proud to have been able to provide our investors with consistent monthly returns.

“We’ve been refining our investment approach since 1952 and strive, above all things, to be good stewards of our investors’ capital. We’re mindful of the deep reservoir of trust we have built, and will do all we can do preserve that.”

La Trobe Financial’s Chief Investment Officer, Chris Paton, says that despite a challenging and volatile macro-economic backdrop, “we have been able to demonstrate significant business growth.

“We have also continued our proud history of delivering low volatility, inflation-responsive monthly income that our investors have come to know and trust.”

La Trobe Financial was established in 1952 and is one of Australia’s oldest credit asset managers, specialising in credit investment solutions and real estate finance.

The firm has won’s Best Investment Management Team (Australia) award for three consecutive years. The programme acknowledges individuals and organisations that have performed strongly throughout the year, and have contributed significantly to the finance sector.

La Trobe Financial’s strong portfolio performance was listed as a key factor in the win. i

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Australia’sleadingcreditassetmanageriscommittedtoretainingand honouringthetrustithaswonfrominvestors.
"We’ve been refining our investment approach since 1952 and strive, above all things, to be good stewards of our investors’ capital."

Kellogg Insight:

Tesla Deserves an A for Its Financial Management

n Tesla’s earning call in late October, Elon Musk said that the company could pursue a $5bn to $10 bn share buyback. He added that “some meaningful buybacks” were likely.

Musk’s comments are probably driven by the massive decline in Tesla’s stock price: companies often use this strategy to boost their stock prices. Now that Tesla plans to join the “pay-out club” — those companies that pay dividends and repurchase their shares — it is time to assess the company’s financial management.

And despite the massive decline in its stock price this year, Tesla scores highly on this professor’s test. Musk should be commended for being in the position to even think about buybacks at this point. When it comes to its financials, Tesla is a straight A student.

It's hard to believe that Tesla is even entertaining a share repurchase. It feels as if it was only yesterday that the company was desperate for cash. In 2017, Tesla burned $1.4bn in the last quarter of the year. A witty Bloomberg headline said it all: “Tesla Doesn’t Burn Fuel, It Burns Cash.”

But things have changed. Tesla reached a nadir in 2017, with a net loss of $2.2bn, which flipped to a net profit of $721m in 2020 and $5.5bn in 2021. And while the annual numbers are not yet available for 2022, Tesla reported a net income of over $5.5bn in the first six months of 2022 — surpassing its income in the entire year of 2021.

The growth in Tesla’s net income was driven by its ability to step-up its operations, mostly by scaling up the production of Tesla’s best seller, the Model 3. Automotive sales grew from $8.5bn in 2017

to $19.4bn in 2019 to $44.1bn in 2021. And despite capital expenditures of more than $6.0bn, Tesla had a free cash flow of over $3.5bn in 2021.

In 2018, investors were concerned about Tesla’s significant debt, which at the time totalled around $12.0 bn. But Tesla was able to turn its cash-burn into a cash-churn — and then used the cash to redeem its highest-paying debt. In 2021 Tesla redeemed $1.8bn in aggregate principal of the 2025 Notes (seven-year bonds issued in August 2017 that paid at 5.3 percent.)

By the end of 2021, Tesla’s debt declined to $6.8bn, while its cash holdings jumped to $17.6bn. Its net debt — total debt minus cash — is negative at -$10.7bn, which means that Tesla can pay its debt in full and still have more than 10 billion dollars left on its balance sheet: more than enough for a significant share buyback.

Tesla made some savvy financial decisions early on. Since 2013, it has financed its expansion and growth using convertible debt, or bonds that can be converted into common stock if the stock price appreciates enough. It issued convertible bonds worth $600m in 2013, $2bn in 2014, $850m in 2017, and $1.6bn in 2019. At the time, Tesla was the poster child of convertible bonds and was able to get away with offering its investors a very low coupon.

Its five-year convertible bond issued in February 2014 attracted investors with a coupon as low as 0.25 percent. Investors agreed to those ultra-low rates because they could convert the bonds into stocks if Tesla’s stock price appreciated enough. Unfortunately, holders of the convertible bond with a coupon of 0.25 percent didn’t get lucky: they saw their bonds mature when Tesla’s stock price fell way below the conversion price of $359.87.

But everything worked out well for Tesla, which was able to raise capital at only 0.25 percent — with no need to dilute its equity.

Tesla also used some unconventional strategies to enhance its liquidity. By taking deposits from customers who ordered mostly Model 3s, Tesla was able to monetise the patience and goodwill of its customers. These deposits, which amounted to $925m by the end of 2021, serve as interestfree loans, enabling Tesla to kill two birds with one stone: enhancing its liquidity while helping to strengthen the commitments of Tesla fans.

In recent years, Tesla has used innovative financing such as automotive asset-backed notes. These bonds are secured by Tesla’s fleet of Model 3, Model S, and Model X vehicles under lease. With the security provided by the leases and other credit enhancements, Tesla was able to pay a very low yield: 0.56 percent on its most senior secured note.

Tesla is facing growing competition in the EV space, which will probably erode its margins, and the risk of a recession is looming over all automakers. But the company is in a strong financial position, with a history of financial shrewdness and a proven record. Apple made its first share buyback in March 2012, almost 32 years after its initial public offering (IPO) in December 1980. Tesla had its IPO in June of 2010 and plans to buy back its shares just 12 years later.

Tesla’s strong liquidity position and relatively small debt earned the company a credit-rating upgrade to BBB by the S&P — but its rating should be even higher.

Tesla gets a very solid A for financial management. i

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> ElonMuskshouldbecommendedforbeinginthepositiontoeventhinkabout stockbuybacksrightnow,saysKelloggInstitute’sEfraimBenmelech.

Full Steam Ahead:

MTR Boss Puts Company Right on Track

The total length of the route was around 40 km. Over the course of his career, Kam has seen the MTR rail network reach more than 270km, covering all 18 districts in Hong Kong and including a high-speed rail connection to mainland China.

The company has also expanded — it now has operations in London, Melbourne, Sydney, Stockholm, Shenzhen, Beijing, Hangzhou, and Macao. Add all those up and you have a combined route length of over 3,300km.

Kam has guided this impressive growth story from various positions. He joined the company as a safety specialist, and held management posts in operations, projects, and the Mainland China and International Business divisions. Before his appointment as chief executive in 2019, he served as operations director from 20112016 and managing director of operations and Mainland business from 2016 to 2019.

Looking back, he says the Airport Railway project in the 1990s played a pivotal role in the company’s development. The new service almost doubled MTR’s route length and demonstrated how a railway can build a city. “Building above and around the stations on this line, we expanded Hong Kong’s CBD, we also extended the CBD across the harbour to Kowloon,” he said. “We redeveloped and revitalised several areas in the western part of Kowloon, and we brought the line to Lantau to serve the new airport that was built there.”

The line also went to the new town of Tung Chung, a former fishing village. With the rail connection, Tung Chung was able to grow and accommodate up to 300,000 residents.

Therein lies the secret of MTR’s success. It builds and operates railway lines to world-class standards, and creates attractive communities that contribute to city development. The company calls this the “Rail plus Property” (R+P) business model — and with network expansion since the Airport Railway project, R+P has contributed to Hong Kong’s growth.

Under the R+P model, property development supports railway construction as well as upgrades and renewal of infrastructure and assets. In a nutshell, it has kept the company profitable since it was listed on the Hong Kong Stock

Exchange in 2000 (apart from a loss in 2020 after the outbreak of Covid-19).

MTR returned to profit despite the continuing pandemic, once again proving how railway funding has given the company financial stability. MTR has ridden out the challenges hand-in-hand with the community, offering a fare reduction and extending a special rebate of 3.8 percent until the start of 2023. And it has continued to invest in rail and introduce new technologies.

Kam believes the benefits of R+P are greater than a simple funding model. “R+P forces railway development to be city-friendly,” he says. “For our projects to succeed, we have to be more concerned about ensuring their smooth integration with the surrounding areas rather than just building a railway.”

MTR’s stated mission is to Keep Cities Moving. “That is not only about mobility, but also about advancing and progressing as a city.” i

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When Jacob Kam Chak-pui joined MTR Corporation in 1995, the company operated three railway lines serving the major population centres of Hong Kong. CEO: Jacob Kam Chak-pui

As If on Rails: The Innovation Driving the MTR Corporation


With a business stretching from its Hong Kong base to cities in Europe, Australia and mainland China, the company is one of the world’s leading railway operators. And that means leading in safety, reliability, customer service, and cost-efficiency.

Despite the challenges of a globally unstable economic climate, and reduced patronage and farebox revenues (all revenues collected from fare-paying passengers) due to the pandemic, the company is moving ahead and achieving new milestones.

Major achievements in 2022 included the successful opening of the Cross-Harbour Extension of Hong Kong’s East Rail Line. This extends a line first built over a century ago, from Kowloon across to the city’s CBD on Hong Kong Island, via a tunnel beneath Victoria Harbour. MTR has also launched services on the Elizabeth Line, London’s new east-to-west network, which it operates on behalf of Transport for London.

The innovative Rail Plus Property (R+P) business model provides a foundation for the generation of diversified revenue streams. As well as building new rail lines, MTR plans and creates fully integrated commercial and residential communities above, or adjacent to, stations along the track alignment.

This has led to a transit-oriented development (TOD) pattern of city growth. Along with a train service reaching all 18 districts in Hong Kong — with an on-time performance of 99.9 percent — the company has 14 shopping malls and manages 120,000 residential apartments. Globally, MTR carries nine million passengers daily, and employs more than 50,000 staff. With revenues from its transport services within and beyond Hong Kong, as well as property development, property rental and station commercial businesses including advertising, the company has strong and sustainable foundations.

MTR is on a transformation journey which has innovation at its heart. Mobility shapes cities, societies and quality-of-life, and high-capacity railways, coupled with extensive digitalisation and integration with last-mile connections, serves as the backbone of smart cities of the future.

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Corporation’s mission is to keep cities moving — and it lives up to that promise.
Opening of the Cross-Harbour Extension of Hong Kong’s East Rail Line.

By using smart technologies more widely, MTR aims to remain a global leader in the mobility sector by enhancing customer service, improving asset management, and providing an efficient and reliable service. Customer-service robots deployed in some Hong Kong stations and shopping malls are an example of this corporate focus on innovation. Robots were also deployed for cleaning duties on trains and MTR premises during the pandemic.


The integrated MTR mobile app provides customers with real-time service information, useful transport-related functions, and news of special offers from MTR malls and station shops. It includes a loyalty programme: customers earn points which can be redeemed for discounts or other rewards when they buy a train ticket or make purchases at stations or malls.

To keep a busy city moving smoothly, train service performance must be at world-class standards.

MTR aspires to Smart Maintenance and Smart Asset Management. Image- and data analytics, supported by AI, monitor railway infrastructure to detect any potential problems before they arise.

Innovation and technology have been embedded into MTR’s corporate strategy. Engine 2, a new growth engine, is one of three strategic pillars along with the Hong Kong core, as well as mainland China and international business. It enables systematic innovation for business growth and the development of new ventures including smart city, railway technology, new retail, mobility-as-a-service, financial and data services, and new mobility modes.

To tap into promising new technologies and talent, the company partners with universities on research and joint investment in technology startups. Its established subsidiary, MTR Lab, steers innovation and co-operation with outside parties to commercialise technology breakthroughs. Staff are encouraged to pursue their own ideas, and can apply for funding support to achieve proof-of-concept.

This drive to embed new technology extends to railway projects. With the extended East Rail

Line commissioned this year, the company is moving ahead on five new projects in Hong Kong. It has committed over HK$100bn (£11.04bn) in project investment over the next few years, as well as the Oyster Bay property development creating 20,000 residential units. New railway projects will be designed with building information modelling (BIM), and use modular and precast construction to conserve energy and minimise disturbance to nearby communities.

Beyond Hong Kong, MTR has operations in London, Stockholm, Melbourne, Sydney, Beijing, Hangzhou, Shenzhen and Macao. The company continues to connect and build communities with an innovative, inclusive and sustainable approach. MTR aims to create value for all stakeholders, and its transformation journey includes principles of social inclusion, advancement and opportunities, and greenhouse gas emissions-reduction. The company has a target of 2050 to achieve carbon neutrality.

For MTR, setting social targets and creating shared value with customers, staff and the broader communities that it serves are a vital part of the vision to sustain high quality services and achieve long-term sustainability. i | Capital Finance International 155
"Innovation and technology have been embedded into MTR’s corporate strategy. Engine 2, a new growth engine, is one of three strategic pillars along with the Hong Kong core, as well as mainland China and international business."

Sri Lanka: Recovery, Redemption & Re-Birth

Ranil Wickremesinghe, Sri Lanka’s most resilient and experienced politician, was gifted his country’s presidency by his political opponents, just as his nation had been declared bankrupt. Although critics question his legitimacy to be Head of State as he lacks a popular mandate, Wickremesinghe has since shown that he is perhaps the only person who can now resurrect a nation that was self-destructing between hope and anarchy. On July 9th 2022, a tsunami of protestors came to Colombo to oust President Gotabaya Rajapaksa from office and amidst chaotic scenes, with security forces almost overwhelmed, Wickremesinghe’s own private residence was torched and destroyed. It was a pivotal moment. The grip that the Rajapaksa family had on Sri Lanka dramatically ceased, yet through their control of Parliament, Wickremesinghe was appointed by MPs to be the next President, and by a resounding majority.

The pearl of the Indian Ocean has the distinction of being Asia’s oldest democracy and should have been a beacon of economic success after gaining independence from Britain after World War II. But successive governments have squandered the opportunity to create an economy that encourages export-led businesses to thrive and instead Sri Lanka is now seeking its seventeenth IMF programme as a bailout, after sixteen such interventions have previously failed to generate sustainable long-term growth. Wickremesinghe also has to contend with healing a nation divided by the unresolved legacy of militant insurgencies, most notably the defeat of the Liberation Tigers of Tamil Eelam (LTTE) in 2009, as well as past and present allegations of human rights abuses that continue to surface at the UN Human Rights Council in Geneva.

Since coming into power, Wickremesinghe has restored both political and economic stability: whereas fuel queues had lasted for 3 days they are now rare, power cuts are shorter and farmers are able to grow crops with access to fertilisers, that had previously been denied. Antigovernment protests are smaller and have not caught the public imagination to the same scale as when the Rajapaksas were in government. Wickremesinghe has used his political acumen to hold together his cabinet of ministers despite them being elected from rival political parties and his government is able to pass legislation, including a recent constitutional amendment. A new budget is currently before parliament which features plans to turnaround Sri Lanka’s economy including unpopular tax hikes as well as increased welfare payments to address rising

levels of poverty. The immediate obstacle is to agree debt-restructuring terms with one of its main bilateral creditors, China. Sri Lanka’s relations with China are complicated by a series of white-elephant infrastructure projects funded by Chinese debt and the perception in the West and India is that successive Colombo administrations have tilted too closely towards Beijing. Re-setting Sri Lanka’s foreign policy will need to be a major objective for the president’s diplomats.

Wickremesinghe is perhaps the only leader who could now heal the political and social wounds of the ethnic conflict that led to Tamil demands for a separate independent state being defeated by militarily action. He has recently called for meetings with all Tamil political parties to resolve this national issue before Sri Lanka’s 75th independence anniversary on February 4, 2023. No doubt high on the agenda will be the issue of implementing the 13th Amendment, where Tamil politicians have long sought for provincial councils to be given greater devolved powers. Moreover, the government is commendably about to propose and establish a Truth and Reconciliation Commission (TRC) that will seek to address grievances amongst victim communities across the island, that have suffered loss and pain due to multiple insurgencies and the state’s responses to them. This Commission is likely to be modelled on South Africa’s TRC, which was so ably championed by Bishop Desmond Tutu. Sri Lanka’s TRC’s independent commissioners who emerge will have a heavy duty of responsibility to bring healing and unite a fractured society. With Britain too seeking to accommodate a Truth Commission to address long-standing abuses during the Northern Ireland troubles, it would be good to see the British government seeking to offering a generous hand to Sri Lanka’s efforts to establish their TRC. Britain and Sri Lanka share a similar legacy of trying to heal divided communities, preventing the recurrence of violence and maintaining their respective union states.

As an island nation, Sri Lanka will face significant Climate Change challenges as well as opportunities. Global rises in temperature could result in volatile weather patterns that may have devastating consequences, as recently experienced in Pakistan. Sri Lanka is blessed with a rich biodiversity in its oceans, mangroves, and rainforests which must be protected and allowed to flourish. As a predominantly Buddhist country, Sri Lanka has led on environmental issues, but more can be achieved. Sri Lanka is still to receive adequate compensation for the pollution and environmental damage caused by last year’s X-Press Pearl shipping disaster and lessons need to learned to avoid such calamity in the future. Sri Lanka is far too reliant on fossil fuels yet has made notable efforts towards renewable energy, particularly with hydroelectric power, as when Margaret Thatcher’s UK government helped to finance the Victoria Dam project in the 1980s. Today, Sri Lanka should be exploiting its abundant potential for solar and wind power. Plans are underway to develop a major solar and on-shore wind project in Pooneryn, in the north and the possibility of electrical grid connectivity to India could mean that Sri Lanka

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"The pearl of the Indian Ocean has the distinction of being Asia’s oldest democracy and should have been a beacon of economic success after gaining independence from Britain after World War II."
Sri Lanka: Gangaramaya Seemamakala Temple in Colombo

earns valuable foreign exchange from any surplus power generation. The World Bank believes that Sri Lanka has huge potential for offshore wind energy which exceeds its domestic needs, and with an opportunity to produce other fuels, such as green hydrogen and ammonia. Unlocking this potential will require external expertise and some considerable financial help. Speaking at COP27 in Egypt, President Wickremesinghe was hailed for championing the global south: “Developed nations should be giving leadership to overcome climate challenges rather than abdicating their responsibilities. It’s ironic that the $100bn pledged annually has not been available in the coffers to finance climate challenges, as many developed nations deem it fit to renege on their climate financing contributions.” It will be interesting to see if the Fund for Loss & Damage that was recently agreed by industrialised nations at COP 27, will mean that Sri Lanka is able to obtain financial help to develop its substantial offshore wind and other renewable energy potential.

Yet for Sri Lanka to really emerge from this year’s series of crises, Ranil Wickremesinghe must seek

to implement some bold “system change” reforms that a new generation are calling for. There is now a growing demand from both within and without the country for the government to meaningfully address corruption. The IMF staff level agreement pointed to Sri Lanka having to adopt measures “Reducing corruption vulnerabilities through improving fiscal transparency and public financial management, introducing a stronger anti-corruption legal framework, and conducting an in-depth governance diagnostic, supported by IMF technical assistance”. Adopting mechanisms that address accountability, a more independent judiciary and the removal of bureaucratic red-tape will have a profound positive effect in enhancing flows of foreign capital into Sri Lanka and discourage those who are currently tempted to leave the country for perceived greener pastures. Sri Lanka has large and influential global diaspora communities who would welcome the opportunity to return, invest and develop their motherland, if a favourable environment is seen to exist.

In the past, Sri Lanka’s political classes have dodged these issues in favour of maintaining

their own privileges. Time will tell, but Ranil Wickremesinghe could yet be Sri Lanka’s saviour. By seeking redemption in the twilight of his own political career, Sri Lanka could not only forge a recovery from its economic fall, but Wickremesinghe could lead a long-overdue awakening that could be the re-birth of his entire nation. i | Capital Finance International 157
Author: Amal Abeyawardene

Wing Bank CEO Invests in his Staff —

‘Better People = Better Organisations’

The CEO of Cambodia’s Wing Bank Han Peng Kwang, is still inspired by his career, and by the banking industry as a whole.

“The need to learn and adapt continuously is exciting to me,” he says. “Banking is a business that is constantly evolving, and that requires me to continue to learn and adapt to remain competitive and relevant.”

Banking has changed, Peng Kwang observes, from the traditional branch banking — which he terms Bank 1.0 — to branchless, digital banking — Bank 4.0. “There is also an emerging trend of decentralised finance that offers higher levels of security, faster transactions, and lower fees.”

He describes his leadership style as a mixture of “servant leadership” and “democratic leadership”. The former is a preference for power-sharing models of authority, prioritising the needs of the team and encouraging collective decision-making. The latter includes team members in the process by asking for their input before a decision is made.

Peng Kwang also incorporates “transformational leadership” in his leadership style: seeking to change the people he leads by inspiring them to innovate. “I always stress the importance of integrity to be successful in life,” he says.

Wing Bank, as an organisation, believes in successor planning: C-suite executives are assisted by their deputies — who are being trained to succeed them.

Peng Kwang assumed the position of CEO at Wing Bank in June 2021. At the time, the entity was new as a commercial bank, but established and well known as a payment service-provider. “I had had the privilege to start a commercial bank from scratch in 2009,” he says, “which was both challenging and exciting.

“It was a very fulfilling personal achievement to successfully launch a commercial bank then. In 2021, I was approached by Wing Bank to be CEO, and help them to establish the commercial banking business.” Wing had just been awarded a commercial banking licence by the National Bank of Cambodia.

“The opportunity was like déjà vu to me — and it got me very excited. The difference is that I

now have the opportunity to build a commercial banking business to complement an existing business. It was already very successful and established, and excels in providing mobile financial services within a large digital ecosystem.

“In this era of digital banking, where it’s crucial to utilise the power of AI and machine-learning technologies to offer better financial services to customers, I see the potential of Wing Bank becoming a leading homegrown digital bank with the capability to serve the full spectrum of Cambodia customers, especially under-served and under-banked citizens. “That’s what motivated me to assume the role of chief executive.”

Peng Kwang plans to leverage the economic uncertainties of the current age to

strengthen employee loyalty, and improve lives. “Wing Bank is an equal-opportunity employer,” he notes, “and an employeefocused organisation. The HR policy at Wing focuses on the holistic development of every employee, and helps to merge their career and life paths.

“‘Wingers’ are proud of their brand, and appreciative of the unconventional HR approaches that help them with life-coaching and career development at the same time. It carves them out as better professionals, and better people.

“Our training programmes are focused in that way because we believe better people make better organisations.” i

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CEO: Han Peng Kwang

Like a wild mustang in a corral, Bernie Marcus has certainly kicked up some dust — and the in-your-face title of his autobiography shows his position as a champion of disruption.

For a Jewish immigrant in the Bronx, turning differences into advantages is a pretty impressive achievement. With the rear-view mirror of hindsight, Marcus can be seen as an archetypal disrupter — an outlier who took on, and shook up, the old-school hardware retail industry in 1970s America. He carried chinfirst chutzpah into every challenge, refusing to accept what life threw at him and creating a lasting legacy through his philanthropic work.

Kick Up Some Dust is particularly relevant in today’s uncertain and self-obsessed world. Atlanta’s Jewish Times called Marcus’s book a call to think big and change the world. The Financial Times described it as an extraordinary story that tells his version of the American Dream from tenement to boardroom, “homespun into lessons for readers wanting to make it in business or philanthropy”. Ron Daniels, president of Johns Hopkins University, commented: “Bernie is living proof of the power of not only doing it yourself, but also of giving back — and Kick Up Some Dust embodies this ethos.”

Marcus’s parents fled the poverty and pogroms of Russia to make a new life in the US, via Ellis Island. His father was a cabinetmaker and his mother a garment worker (who survived the Triangle Shirtwaist Factory fire, a dark moment in US industrial history). The youngest of four children, Bernie Marcus spent a tough childhood in Newark, New Jersey. By the age of 15, he had chalked up a string of jobs — scrubbing toilets and working at a bowling alley — and joined a street gang. He even worked as a comedian and hypnotist in the Catskills.

In 1948, Marcus senior insisted that Bernie labour on a dairy farm; he thought the work would be good for him. Bernie, meanwhile, wanted to become a doctor. He couldn’t afford tuition fees, but later, using money he had

earned and saved, he went to Rutgers University and qualified as a pharmacist.

But Marcus found himself more interested in the world of retail, and worked for a cosmetics company before becoming CEO of New Jersey home improvement store Handy Dan (now defunct). At the age of 49, Marcus was fired, as was fellow employee Arthur Blank.

The pair teamed up with Ken Langone to launch a new hardware store: Home Depot. The first day went so badly that Marcus’s wife wouldn’t let him shave because she didn’t want a razor in his hands.

Despite the dire beginnings, the three partners grew the company into the world’s largest home improvement retailer — and put DIY into the hands of ordinary Americans.

Home Depot went public in 1981, and now employs about 500,000 people at 2,300 stores.

The remarkable success made Bernie Marcus one of the country’s best-known entrepreneurs. He went on to establish charitable foundations

for children, Jewish charities, war veterans, medical research, and free enterprise.

With candour and clear writing, Marcus outlines his belief that the skills needed to build a Fortune 500 company are the same ones that can find a cure for cancer. It doesn’t require a fortune to make a big change to a community. As he says in the book, donating money is easy; getting involved and making a difference is hard. The wealthiest Americans donate, on average, 1.3 percent of their income to charity; the poorest give about 3.2 percent. Ordinary people find ways to support their communities, and they understand it is essential to building a better society.

The idea that each of us can make a difference may sound trite, but it can open the door to transformative powers. Some may make huge contributions; others may simply make another person smile. KickUpSomeDust will inspire the reader to think big, give back, and perhaps even change the world.

Marcus learned this from his mother; no matter how poor they were, she always put aside a few pennies to help those less fortunate. He faced challenges that may have made lesser mortals give up. His life is testament to the principle that no experience is wasted if you learn from it. Failure never discouraged him — and he didn’t take all the credit when he was successful. He was often knocked down, but he kept getting up.

KickUpSomeDust is Marcus’s attempt to show us how our own efforts, dedication, and sacrifice can bring hope and satisfaction — to others and to ourselves. He believes we can all make a difference. If you see a problem, stand up and do something — or, to borrow the Nike slogan: “Just do it”.

Marcus is the poster child for the triumph over adversity, the power of thinking big, giving back, and doing it yourself. The poor boy from Newark transformed millions of lives. He found his passion in business and philanthropy, and lives by the principle that giving to others is good for you — and for your community. i

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ThelifeandtimesofentrepreneurBernieMarcus,andthemessagethat yes,wecanallmakeadifference. Book Review - KickUpSomeDust by Bernie Marcus Think Big and Buckle-Up for
Fast-Paced, Pithy Memoir >
"The remarkable success made Bernie Marcus one of the country’s best-known entrepreneurs."

IDClear ‘Captain’ Has Strategies Ready for Future of Company

Iding Pardi, appointed as IDClear president-director for 2022-2026 last June, is armed with strategies to ramp-up the company’s performance and navigate challenges.

He aims to focus on providing effective and efficient clearing, guarantee-, and riskmanagement services, as well as providing services that add value. To raise the attractiveness of capital market and financial markets, he intends to make IDClear a trusted central counterparty (CCP) for exchange, OTC, and bilateral transactions. This will be achieved by providing the best infrastructure for clearing, guarantee, risk management, and collateral management services in the capital market, as well money markets.

The Indonesian Financial Services Authority (FSA) advised directors to anticipate an increase in transactions on the stock exchange by preparing a reliable system and infrastructure.

“This is in-line with IDClear’s main functions and priorities, and has become the task of the new board of directors,” Pardi said. In the short term, he will focus on development strategies, including implementing CCP for over-thecounter interest rate and exchange rate derivative transactions, clearing development for carbon trading, and developing an integrated collateral management system for bilateral and triparty repo transactions.

With regard to the expansion of services in financial markets and infrastructures, IDClear ensures conformity with a variety of market best practices and international standards, as well as risk management, and efficiency.

IDClear will also adjust the operational system in response to changes in client code, develop settlement shortcuts (settlement flows acceleration), and increase its core system (e-CLEARS) capacity by implementing phase scale-out in the new data centre.

Iding Pardi says the board of directors will follow strategic guidelines and refer to the company’s Strategic Business Masterplan 2021- 2025. The growth strategy has been prepared via an analysis of developments in the capital and money markets, aligned with Indonesia FSA’s strategic plan as the supervisory agency, Indonesia Stock Exchange as the shareholder, and principles, standards, global trends, and inputs from capital and financial market participants.

President-director: Iding Pardi

Iding Pardi is optimistic about navigating IDClear’s future with market and product development initiatives, increasing system processing capacity, and improving coordination between financial market authorities. IDClear will continue to build connections with other FMIs on expanding financial market services and participants, harmonising with market best practices and international standards, infrastructure investment, and human resources.

Pardi has held several positions in the organisation over the years. He was director from 2018-2022, head of research and development from 2013- June 2018, head of the Research and Development Unit (2005-2013), and riskmonitoring officer from 1999-2005.

Iding Pardi earned a Bachelor of Business Administration in 1998, and a Master’s Degree in Management from the University of Indonesia in 2006. i

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The King of Late-Night Chat who Vanquished Personal Demons — and Enchanted

If Craig Ferguson had been just another chat show host, his legacy may not have endured. But from the start, the witty Scot’s televised encounters with celebrities unleashed a superpower: the ability to loosen people up and allow them to be their fullest, funniest, weirdest selves.

Ferguson was one of the UK’s leading comedians when he skipped the Atlantic and shot to fame in Hollywood. With a combination of stand-up, a role as prickly Nigel Wick on TheDrewCarey Show and a burgeoning portfolio of writing gigs, he was well on the way. But it was his time as the host of The Late Late Show, which followed The Late Show with David Letterman, that made his name.

The presenter’s slot opened up with the departure of host Craig Kilborn; Ferguson won out against four other pretenders to the throne and took over the CBS franchise in 2005. He held his place until 2014 and achieved the highest ratings that the show — which began in 1995 — had ever seen. It usually opened with a theme song written and performed by Ferguson himself, followed by a monologue or a puppet show.

The charming Scot was a master in flirtatious banter, and his puppets, puns and parodies brought paroxysms of laughter — but Ferguson had his serious side. He wasn’t averse to addressing serious issues — including his own complicated past.

In his autobiography American On Purpose, Ferguson describes his battle with substance abuse. Not that substances were always his enemy; he claims he set out one night to commit suicide — but popped into a bar, got sidetracked, and forgot all about his grim intention. But he is under no illusions about the evil lure of alcohol. “(It) ruined me financially and morally,” he wrote, “broke my heart and the hearts of too many others. Even though it did this to me and it almost killed me, and I haven't touched a drop of it in 17 years, sometimes I wonder if I could get away with drinking some now.

“I totally subscribe to the notion that alcoholism is a mental illness because thinking like that is clearly insane.”

Ferguson’s recovery, sobriety and self-reflection gave him the self-awareness to engage celebrity guests in an unpretentious, direct, and easygoing way. He had the gift of improvisation, and often tore up his prepared interview cards. He

displayed a genuine interest in his guests as people, rather than as conduits to promote a product or an achievement.

Although the show was reliably comedic, Ferguson’s emotional breadth and confidence enabled him to tackle taboo themes such as death — including that of his parents — and national tragedies. He didn’t shy away from major events or politics, and his interview with South African apartheid opponent Archbishop Desmond Tutu earned a 2009 Peabody Award.

Ferguson penned two other books, a novel called Between the Bridge and the River and a retrospective entitled Riding the Elephant: A Memoir of Altercations, Humiliations, Hallucinations & Observations. He wrote and

starred in three films, directing one of them, and appeared in several others. He lent his voice to animation productions as Gobber in the How to TrainYourDragon film series (2010–2019), Wol in Winnie the Pooh (2011), and Lord Macintosh in Brave (2012).

Since his 15-year stint at The Late Late Show ended in late 2014, Ferguson has continued with presenting work and stand-up comedy. Since January 2021, his main gig has been as the host of ABC’s game show The Hustler

A choice Ferguson quote to wrap things up and showcase his sharp sense of individuality: “If I start giving people what they like I'll turn into one of them — and I don't want to be one of them, I want to be one of me.” i

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his Audience
Craig Ferguson

A CEO Who Worked His Way Through the Ranks of a Family Firm to Lead From the Front

Thai Life Insurance Chief Executive Officer Chai Chaiyawan started

career in 1982 in the most basic way: learning the ropes.

He began by overseeing human resources, accounting, administration, branch management, and supervision of sales agents. He was later made assistant chief of investment and appointed Thai Life president in 2004. He ascended to the chief executive’s post in 2021.

Under Chai's direction, the company has strived for — and earned — global recognition. In all areas of growth, including working methodology, brand creation, and human resource development, Chai has proved to be a visionary leader.

Thai Life has become the national leader in the life insurance sector. Chai Chaiyawan is something of a spiritual guide and thought leader for his staff, inspiring and empowering them in their careers.

Chai's management style is a fusion of East and West. He manages the company in an Oriental manner that emphasises lovingkindness, compassion, empathy, and serenity. He also operates in a Western manner, drawing on professional cultures that have a focus on business models, KPIs (key performance indicators) and OKRs (objectives and key results) to measure performance.

“We use Eastern philosophy, Buddhism, and Chinese or Japanese philosophy while managing people,” he says. Personnel are content and are not forced to work under any stress. “KPI is similar to job improvement — it encourages employees to enjoy pushing themselves,” Chai believes.

The Chief Executive Officer focuses on sustainable growth by setting the brand purpose: to be “a leading brand that is admired and inspired by everyone in society”. For business purposes, he aims to provide all the answers for life insurance, health insurance, and personal financial planning for life’s every stage and rhythm, as well as catering for diverse lifestyles and needs.

He achieves this by continuing to value human, value-driven-centricity. People are an essential factor in driving any business, Chai believes, and says that the most worthwhile part of an entrepreneur's life is to ensure better quality of life for employees and their families. The most rewarding thing for Chai is seeing his organisation

CEO: Chai Chaiyawan

achieve sustainable growth, strengthening society and creating social value.

Chai Chaiyawan was born in 1957 and graduated with a HND in Business Studies from the West

Glamorgan Institute of Higher Education in Swansea, UK. He also holds a BA in Business Administration from Richmond University, UK, and an Honorary Doctorate of Philosophy (Business Administration) from Maejo University, Thailand. i

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Women’s Brain Project: Campaign Raises Awareness of Migraine on Women's Careers

The neurological condition comes with a barrage of debilitating symptoms including pain, dizziness, nausea, vomiting, and sensory disturbances.

The Women’s Brain Project (WBP) is an international non-profit organisation based in Switzerland, studying sex and gender determinants of brain- and mental health. It puts forward the need for a policy framework for the workforce, adapting school and workplace legislation to give migraine sufferers, and girls and women in particular, equal opportunities.

Anna Dé, WBP policy and advocacy lead, spoke about the organisation’s global awareness campaign, Not All In Her Head. The campaign seeks a shift in the way migraine is handled, and focuses on the disproportionate impact it has on women. The WBP has the partial support of global women’s healthcare company Organon Belgium BV for the campaign.

In a worldwide survey, in which 75 percent of the participants were women, 70 percent reported a negative impact on their working lives. More

than half of migraine sufferers struggle to concentrate at work — and a third are forced to take sick leave. An average of 4.6 working days are being missed each month, it was reported. Absenteeism and reduced productivity while working are significant issues, says Anna Dé. Many of those canvassed in the survey reported that their colleagues did not understand the condition.

The launch of Not All In Her Head marks an important step in the fight for greater awareness. Women suffer from longer migraine duration than men and have a higher recurrence rate. Too often it is dismissed as “just a bad headache”.

“After suffering from a traumatic brain injury, I experienced terrible migraines for years,” says Chéri Ballinger, US Ambassador at WBP.

“My migraines were very hormonal, and so debilitating. Yet, I was just kind of written-off most of the time — and I feel like that's the case for many other women.” There needs to be more gender- and precision research, the entrepreneur and film producer strongly believes. The physiological burden of migraine

is “challenging enough without stigma in the workplace”.

“The fact that so many women are affected by migraine ... needs to be more widely recognised,” adds neuroscientist and neuroimmunologist Dr Maria Teresa Ferretti, co-founder and Chief Scientific Officer of WBP. “Migraine hits mostly women in their prime working years (and) addressing it is a must.”

Susanne Fiedler, Chief Commercial Officer at Organon, says her company is committed to helping women and girls achieve their full potential through better health. “By demonstrating that migraine is both a gender equity and economic issue, we hope to break the silence and improve migraine education, care and treatment.”

The Not All in her Head campaign encourages policymakers, patients, healthcare professionals, employers and the general public to adopt a multi-stakeholder approach to improve migraine management with better awareness, early diagnosis, and gender-specific research. i

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Migraine is the leading reason for lost work days for people under 50 — and women are three times more likely than men to suffer from the disorder.
See more:

COP27 Pledges Biodiversity Finance to Boost Climate-Change Resilience

rom the beginning, this conference has been driven by two overriding themes: justice and ambition.”

These were the words of UN Secretary General Antonio Guterres at the close of the COP27 conference in Sharm el-Sheik, Egypt. “Justice,” he continued, “for those on the frontlines, who did so little to cause the crisis — including the victims of the recent floods in Pakistan that inundated one-third of the country. Ambition to keep the 1.5-degree limit alive and pull humanity back from the climate cliff. This COP has taken an important step towards justice.”

Conference parties agreed to the establishment of a loss and damage facility to provide finance for developing countries. Critical to this point is the fact that developing countries in general, and least developed countries (LDCs) in particular, are the world’s lowest greenhouse gas-emitters — and the places most likely to suffer the impacts of climate change.

The breakthrough agreement on loss and damage reflects an essential, if overlooked, fact: climate solutions require finance solutions. For every climate-adaptive infrastructure project, every clean-energy technology brought to scale, every pro-conservation small business that is capitalised, a finance solution is now in place.

The next step is to identify financing solutions to catalyse the necessary capital to support effective action. The UN Capital Development Fund (UNCDF) — the UN’s flagship catalytic finance entity for the world’s 46 least-developed countries — has developed a suite of solutions to deliver clean energy and biodiversity finance at scale.


With scarce resources and overreliance on climatesensitive activities and sectors, such as rain-fed agriculture, LDCs are disproportionally affected by climate change. Local governments are often responsible for managing climate-sensitive sectors that are critically important for successful adaptation. That includes land use, water management, natural resource management, and infrastructure.

The UNCDF designed the Local Climate Adaptive Living Facility (LoCAL) in 2011 to

promote resilient communities and economies. It provides a standard, internationally recognised, country-based mechanism to channel climate finance to local government authorities in LDCs. This contributes to the achievement and implementation of Paris Agreement commitments.

There will be a greater focus on supporting nature-based climate solutions and promoting green economies. By 2025, LoCAL will be expanded to at least double the financing volume via direct access to international funding.

A new standard, ISO 14093 — issued by the International Standard Organisation — was launched at COP27. It is based on LoCAL and offers an internationally recognised, countrybased mechanism to increase local governments’ access to climate finance. The ISO cements LoCAL’s standardised approach to achieve results at a local level.


Climate-related disasters are the number one cause of population displacement over the past decade. More than 20 million people are forced to leave their homes each year. Pacific Small Island Developing States (PSIDS) comprise seven of the 10 countries and regions facing the highest risk of internal displacement. The increased frequency and severity of regional weather events have disrupted economic and social progress and hampered development. Despite high exposure to natural hazards, most residents do not have insurance protection.

The Pacific Insurance and Climate Adaptation Programme (PICAP) aims to improve the financial preparedness and resilience of the region. This will be achieved via market-based insurance products. Under PICAP, the UNCDF has helped to introduce two new parametric micro-insurance products to the Fiji market. Both products offer combined insurance cover against heavy wind

and rainfall, and are designed to offer immediate financial support after extreme weather events.

The UNCDF acts as the convenor for the Climate Insurance Linked Resilient Infrastructure Financing (CILRIF), which is a long-term “known price” insurance solution that incentivises municipalities to invest in resilient infrastructure. The CILRIF aims to provide access to affordable, 10- to 20-year climate insurance with prearranged premiums (contingent upon the cities’ commitment to invest in climate resiliency).

If a city implements the prescribed adaptation measures, the insurance premium will decrease to reflect the managed risk. Access to insurance coverage is also expected to reduce the cities’ financing cost and provide lower-cost development capital.

The CILRIF will operate a climate-risk insurance facility, and an infrastructure finance facility. Participating cities will have access to longterm climate insurance and reduced financing costs informed by their resilience investments. Insurance premiums will reduce commensurate with the increase in resilience.


The UNCDF will support energy transition agenda that emphasises decentralised renewable and clean-energy projects and products. Netzero emissions energy solutions that expand energy access and add value are key elements. The UNCDF promotes access to finance across energy value chains, from customer to enterprise, to larger investments. It helps to fill the SME energy-financing gap via its financial instruments.

The UNCDF increasingly supports solar energy and improved-cooking business models to increase their bankability and reach excluded populations. By 2025, the organisation aims to support investments that allow six million people in at least 10 countries to access and benefit from clean energy. Its investments will also contribute to wider energy-market development, with a focus on productive use and local economic resilience.

At the 2022 COP, the OPEC Fund for International Development (in partnership with the UNCDF) and

164 | Capital Finance International
Forests, coral reefs and populations most at-risk come into focus at 2022 summitinEgypt.
"There will be a greater focus on supporting naturebased climate solutions and promoting green economies."

Sustainable Energy for All (SEforALL) launched a Climate Finance and Energy Innovation Hub. The hub will identify solutions for partner countries, addressing gaps in green finance and private sector investments. It will promote innovative business models and financing instruments to source, unlock, de-risk and scale-up private sector investments in energy access.

The aim is to foster new financing partnerships and mechanisms, including an Energy Access and Transition Trust Fund. Designed as a global end-to-end policy and finance platform, the hub will harness financial innovation to ensure maximum leverage. Each dollar of sovereign finance should attract, in the medium term, $4 of green and sustainable capital.


Coral reefs, which support an estimated one billion people, are among the Earth’s most endangered ecosystems. More than half the reefs have disappeared as a result of climate change and human pressure.

With an aim to deploy $625m over the next decade, the Global Fund for Coral Reeds is the

first blended-finance instrument developed to close the coral reef funding gap and establish the first UN fund dedicated to Sustainable Development Goal 14 (Life Below Water).

The US Agency for International Development (USAID) announced at COP27 a commitment of up to $15m to scale reef-positive finance in the Egyptian Red Sea, in partnership with the GFCR. This was announced as part of a wider regional approach led by the UN Development Programme, aiming to unlock at least $50m in blended finance.

The Central African Forest Initiative (CAFI) is a UN Multi-Partner Trust Fund (MPTF) and policy dialogue platform supported by seven European countries, the Republic of Korea, and the European Union. It will pursue a low-emission development pathway to economic growth and poverty reduction while protecting forests and natural resources.

The CAFI combines investment and high-level policy dialogue to help partner countries to implement the 2015 Paris Agreement on climate change, fight poverty, and sustainably develop.

At COP27, the CAFI and the Dutch investment fund &Green announced a commitment of at least $120m to the Congo Basin Pledge. It is one of the few regions to absorb more carbon than it emits. The forest, the world’s second-largest, absorbs nearly 1.5 billion tonnes of CO2 from the atmosphere each year — four percent of global emissions. The Congo Basin Pledge, launched at last year’s COP26 in Glasgow, is an ambitious five-year (2021-2025) commitment to protect the Central African rainforest.

The funding from the CAFI and &Green will be invested over 2023-2028, and aims to make a long-term impact in the region by increasing local food production, agro-industrial development, and social inclusion without endangering the Congo Basin.

COP27 has settled the debate on the need for financing solutions to combat the climate crisis. But that debate has yielded a conversation around what solutions are needed for the areas at the greatest threat from climate change. The UNCDF stands ready to deliver a suite of solutions that will ensure no one is left behind. | Capital Finance International 165
"The aim is to foster new financing partnerships and mechanisms, including an Energy Access and Transition Trust Fund. Designed as a global end-to-end policy and finance platform, the hub will harness financial innovation to ensure maximum leverage."

The World Cup

World Economy

For a large part of my professional career, I explored the links between the beautiful game and the global economy.

At Goldman Sachs and, before that, at the Swiss Bank Corporation, I indulged my dual obsessions by presiding over special one-off publications for each World Cup from 1994 until 2010. After one, I received personal messages from senior central bankers around the world. Some told me it was the best publication we produced, which, given how frequently we published on economic events and markets, was both amusing and something to ponder. We persuaded national leaders and major football figures to guest write for us. On one occasion, Alex Ferguson, the legendary Manchester United manager, selected his all-time top world team.

I have, to date, managed to attend six World Cups, hosted by the United States, France, South Korea and Japan, Germany, South Africa, and Brazil. From these experiences, I can add my voice to those who describe the event as one of the most beautifully inclusive meetings of many different nationalities and cultures. The advent of the Fan Zones, which really took off following the 2006 World Cup in Germany, embodied this spirit, though I experienced it most intensely in Seoul in 2002.

The link between football and the state of the world economy is apparent in the choice of tournament hosts. I think it is an inescapable fact that FIFA’s selection of South Africa in 2010, Brazil in 2014, Russia in 2018, and now Qatar, was based on the steady rise of so-called emerging economies during the first two decades of this century. I have long thought that the other two BRICS countries (a group comprising Brazil, Russia, India, China, and South Africa) might well join the small group of hosts in the future.

But given many major countries’ inward turn in recent years, are the days of even wanting to host

the event numbered? Will aspiring emergingmarket countries find it increasingly difficult to succeed in staging the world’s most watched tournament? Or, to the contrary, could the world soon shift back to a more contented, globalising, and inclusive international order? One might even ask a deeper question: is FIFA a leading or a lagging indicator of the world economy and the degree of globalisation?

I suspect that how the competition progresses over the next four weeks and, crucially, how many of us watch the matches, might be the clearest early sign of the broader significance of this year’s World Cup. The competition has been the backbone of FIFA’s revenues. There is already talk – probably motivated by professional clubs’ desire for even stronger revenues – of turning the tournament into a biennial event, or supplementing the current quadrennial format with a quadrennial club-based competition.

If the global economy’s future is very different from the past 20-30 years, this will be reflected in FIFA’s decision-making. It is hard to imagine FIFA being enthusiastic about future competitions in emerging-market countries if these countries contribute less to world economic growth than the tournament hosts since 2010.

In the 1980’s, 1990’s, 2000’s, and 2011-20, global real GDP growth averaged, respectively, 3.3%, 3.3%, 3.9%, and 3.7%. The acceleration in the most recent two full decades was clearly due to stronger growth in the emerging world, and it coincides with the period when FIFA began selecting hosts from outside the traditional football strongholds. It currently looks as though this trend could be reversed this decade, even with eight years still to go.

And what about the winners this time? I learned through the popularity of the publications I produced in the past to go no further than predicting the four semi-finalists. For one thing, the same realism with which one must approach economic forecasting applies to the World Cup as well; for another, the leaders of countries we didn’t tip to win often didn’t take it very well.

I start with history. Only eight countries have won the World Cup. Brazil, having won five times, is always one of the favorites, and this year’s squad seems to be one of the tournament’s strongest. Argentina, Uruguay, France, Germany, Italy, Spain, and England are the other previous winners. Even though Italy failed to qualify this time around, the winner is likely to be one of the others.

One of these years, England will win it again, but it could easily be any of the previous winners. Among the rest, Denmark, the Netherlands, and Portugal usually punch above their economic and population weight. Whoever wins, I will be watching for all sorts of signals about the future – just as I have always done. i


Final Thought 166 | Capital Finance International
Jim O’Neill, a former chairman of Goldman Sachs Asset Management and a former UK treasury minister, is a member of the Pan-European Commission on Health and Sustainable Development.
The 22nd World Cup is under way, but who at the beginning of this century would have thought it might be hosted by tiny Qatar? Yet here we are, and the only surprise is that it doesn’t feel all that surprising.
and the
"I think it is an inescapable fact that FIFA’s selection of South Africa in 2010, Brazil in 2014, Russia in 2018, and now Qatar, was based on the steady rise of so-called emerging economies during the first two decades of this century."
"It is hard to imagine FIFA being enthusiastic about future competitions in emerging-market countries if these countries contribute less to world economic growth than the tournament hosts since 2010."


Professor Hawking did more than wonder about time. He spent most of his life probing into the beginnings of our universe, and discovered the very origins of time itself. And then, this theoretical physicist, whose legacy stands alongside those of Galileo, Newton and Einstein, made his discoveries accessible to everyone. The fact that he did all of this whilst battling debilitating motor neurone disease was all the more remarkable, showing Hawking’s courage, insatiable curiosity, and ambition. The Hawking limited series watches are a fitting tribute to this titan of science, and Bremont is proud to present them alongside Professor Hawking’s family.

Winter 2022-2023 Issue | Capital Finance International 167
“I have wondered about time all my life.” - Professor Stephen Hawking
Everyday Exceptional The new Maserati Grecale Trofeo.
consumption combined
2 emissions combined
vehicle types
(l/100 km): 11,2 // C O
(g/km)*: 254 //
class: F CO 2 is the main greenhouse gas responsible for global warming. The average C O 2 emission of all (cross-brand)
offered in Switzerland is 149 g/km. The C O 2 target value is 118 g/km (WLTP).

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