European Family Office Winter Symposium
Tatiana Nevard, Co Founder of Red Square London attended the Opal European Family Office Winter Symposium on the 11/12 February 2013 at the Park Lane Hilton, London. On the second day, Tatiana joined a team of experts on the BRICs Region panel; hot on the heels of that appearance, here are the top questions that were answered by the panel and our summary of the answers given:
1. Q: Can the BRIC grow while the developed world slows?
The panel was optimistic that within two years there would be a pick-up in the BRICs economies. They acknowledged a slow down had occurred, but felt there were still reasons to be optimistic. In the main the sheer scale of countries like the Russia Federation and China still present enormous potential.
2. Q: Should we invest in MIST, as it outperforms the BRIC? Or other opportunities outside the BRICs region?
Serious food for thought here; anyone who can take the risk could do very well. "MIST markets have already posted high gains (Turkey and Indonesia already around 300% from the bottom). Now it is time to take a look at smaller overlooked emerging markets, so called Frontier markets” Denis Vengust, BEF Fund.
Markets of Western Balkans – ex Yugoslav countries are lagging behind the most in the world and have huge potential, as some of them are still at only 10-15% of their 2007’s peaks. Another important factor is that Balkan region represents the last catch up opportunity in Europe in the foreseeable future.
3. Q: Are the BRIC economies facing the same financial bubble as the developed world?
"The West is in dire straits, which in the main is down to the banking system. For example, in India the growth is consistently high, so to my mind that doesn’t indicate a bubble. The Indian banking system is 70% nationalized which actually puts it on parity with the UK." Deepak Lalwani, Lalcap UK.
4. Q: What are the investors’ concerns when looking to BRICS region countries?
Tatiana Nevard, Red Square London was keen to discuss the current concerns over doing business in the Russian Federation. Difficulties over political stability, transparency of decision making process at political as well as judicial levels and enforceability of court judgements were named as contributing factors to slow down in direct, and indirect, investments into the region.
Tatiana Nevard also cited ad hoc administrative decisions of and ‘endless inspections’ by local authorities and officials as ‘undesirable effects’ on businesses, and certainly another hindrance for developing ‘free market’ investment culture in Russia.
"If Russia is where you want to go, don’t expect for things to be done in the same way as your own jurisdiction, there will always be risks specific to Russia and they won’t go away, but it is possible to avoid or at least manage those risks. Having a local business partner or advisers in your own jurisdiction who are specialists in the region will ensure that you avoid most common mistakes in doing business in Russia."
"Current Russian client sentiment is that they are often reluctant to invest in their home jurisdiction because of concerns already mentioned and security and safety of their investments. On a positive side, those who underwent the ‘Russian school’ of way doing business and survived, reap great benefits.” Tatiana Nevard - RSL
All panellists agreed that a failure to understand cultural differences and alternative business methods is a barrier to going into new jurisdictions. It is essential to have competent, trusted partners on the ground in whatever market you go into, to ensure you bring about success.
BRICSs Region
Moderator:
Managing Director, HFIM/ DHANDSA FAMILY OFFICE
Panelists:Director and Co-founder, RED SQUARE LONDON, FAMILY OFFICE
Director, India, LALCAP (UK)
Investment Manager, BALKAN EMERGING FRONTIERS FUND, SP
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