I have a Dream.
December 16, 2024
On 5 December 2024, I sent out the below tweet on my X handle in what seem to be like a dream has come to realization with the critical standing team.
10 days later, it has gone into full activation, a journey that one day in the distant future will update you on.
For now, I will be sharing the pitching email below I sent out to a small team that might soon led to the birth of something that I dream one day will be something worthy of all efforts.
Enjoy the reading to the end.
“Good afternoon/morning,
I would like to extend my thanks for your expression of interest in Joining the journey.
In this email, I'm going to try to articulate as much as possible the vision that I have and give you time to assess your option to be part of the founding members to enable us to kick start this off.
Whereas this might be coming off as an Investment club, it is not a truly Investment club but a full Equity company that should have potential to be a full fledged Private Investment and Asset Management company with a vision and plan to invest in critical assets that matter and assessed in a way that maximises Equity return of the Owners of Equity. I will articulate the Investment Plan later but for now, let me first focus on the Membership plan and structure.
This is going to be an exclusive club that should bring in a select few of highly ambitious, financially able, technically diverse people that should at minimum contribute at least 20 million a year (all going to Equity ownership of the Apex company) and be willing to actively be part of developing the structure, direction, investment assessment, risk assessment of the company but most importantly be willing to embrace the technical embrace of employing specialists to run things. This exclusive club, for the start in my computations, I have zeroed it to a maximum 40 people for the Apex Company to ensure limited dilution of ownership, maximizing return to the vision bearers and early risk takers and those who are willing to invest in early, the time and resources to kick off what can potentially be a wholistic future of an Asset Management company.
Will this mean we won't allow in new members?
This from my vision would be two fold. In the future, but with the approval of an Investment committee, and when time matters, the Apex ownership might be opened up to an extra people but in a manner that ensures the protection and builds on the foundation of what might have been built by those early members. It must be strategic that any other person joining in, must serve to the great value add of the whole company and the Equity owners. Control matters.
But the second fold would be, since this would be a full Investment and Management company, in the current trends of finance, Some investments are best done in a spinned off company or Special purpose vehicle or even Joint ventures where the Apex company owns just a percentage stake in a particular investment and this allows us to outsource the remaining Equity in this particular vehicle to other external investors who can bring in as much money to this particular project and their exposure is limited to this investment. This would help to serve a wider group without necessarily diluting the Apex Holding company. This will enable private raising of capital for ambitious projects, from a selected network of high ambitious individuals to invest in specific projects without owning Equity in the ultimate company and this would enable even the mass investors who might want to contribute just as little as 5 million per year to be part of something owning stakes in specific vehicles without ownership in the private Apex company.
Investment Plan.
The first proposal would be to have among the group, a selection of an Investment committee that whole must design the Investment policy framework of the company and tasked with review and approval of Investments with particular emphasis on the allocation of assets in a manner that puts risk and return into perspective. The Company would have a risk-adjusted return benchmark and goals set per year to achieve and calibrate to ensure goals and equity return is maximized for the owners of the company.
Because this is a company that would be established through the legal framework of Uganda, the first opportunities to look at would be in Uganda, and should be wholly consistent with the overall strategy, direction and objective of the company with the risk tolerance that would need to be set off clearly in an objective manner like below
Establish the Investment guidelines and performance benchmarks
Recommend and manage the services of Investment managers that the company might employ.
Invest and deploy assets of the company
Determine and set liquidity and establish cash needs and Capital raising goals.
With this, my current assessment would be an asset class that is wholly diversified but addresses and maximizes the risk adjusted returns of members in a manner below.
Fixed income Securities Investments. For both Holding and trading. Buying fixed income securities in the region, to hold and maximize returns for Equity but also trading to a network of people in a competitive way that allows the Company to obtain liquidity while at the same time making a profit on the traded assets. The allocation to these would be set forth by the Investment committee and approved by the whole group in a manner that maximizes the risk-adjusted return to the members.
Real Estate. Real Estate in Uganda is still one of the most profitable capital-intensive sector that with the right plan can be tapped into and offer good yields and returns while reducing risks to the company. The Real Estate project would also offer the best angle into operationalizing the Special purpose vehicle investments that would bring in new external investors in just specific projects while the Apex company purely manages the assets with a stake in it. This would ensure the Apex company earns from Equity and management of these assets and also through private mobilization of assets from private individuals.
Strategic business Acquisitions. A higher risk investment but with worthy returns. Wholly and partially. As the country grows, there are strategic sectors that are now ripple for private investment both through Equity investments or Debt advancement, and these would be strategically selected, capital allocated with a plan to run and manage them to ensure value and return is maximized from them. (This would also categorize and consider businesses like money lending or private credit to mortgages)
Legal Considerations.
From word go, the plan is to ensure the company complies with the legal and regulatory requirements of Uganda and to ensure we set forth the right tone and right structure for running of the Apex company.
Risk consideration
Because this is a unique opportunity to bring in diverse people of different backgrounds, the risk starts at the beginning, and this would be a critical element to have a risk task force and an assessment and development of the different potential risks. The ideal path would be to have a risk task force right away to start on this and come up with a risk policy that must be adhered to and guide the members and owners to ensure the vision of the company is realized.
Critical risks I believe we must consider right away and develop a thorough plan for are
Operational risks. How the whole company must be set up and run in a manner that ensures the right corporate governance are followed. Setting up the right controls in place, personnel and systems that would protect the company from both internal and external shocks.
Market risk. Since this would be an investment and Asset Management company, it would be prudent to have the right approach on deployment of capital in a way that monitors the portfolio to ensure at any one time, the market exposures are limited to what the company has approved.
Strategic risk. Impact on the ultimate shareholders value of the company is realized over time.
The risk consideration must cover the elements of Return, volatility in the markets we want to enter, Capital objective and direction and Liquidity needs of the company and overall direction.
Why a minimum 20 million per year Minimum then?
As you can see, to execute this, would require significant capital especially in the early years of the company yet must also need a select few people to ensure there are proper establishment of protocol, execution and direction, something that can't be done from a mass level.
If you have read up to the end and you are still interested in this path forward, kindly reply to this email and I will fully start organizing the group in a way to move forward to execution.
