Dallas-based national commercial real estate firm Stream Realty Partners announced the promotions of Dylan Munoz and John Rogers to executive managing director and partner roles within its Investment Management team.
“Both Dylan and John have played a pivotal role in the success of our Investment Management platform,” Adam Jackson, Stream’s chief investment officer, said in a statement. “Their promotions are a testament to their exceptional leadership, expertise, and dedication to delivering outstanding results for our partners. We’re excited to have them as partners, and we look forward to their continued contributions to the success of our firm.”
Munoz joined Stream in 2018 as an associate and has risen through the ranks to become a pivotal figure in the Investment Management platform, the company said.
In his new role, Munoz will continue to play a crucial role in managing Stream’s investment portfolio, sourcing new investment opportunities, and spearheading strategic initiatives. The company said Munoz’s dedication and expertise have been instrumental in the success and expansion of Stream’s investment management endeavors.
Rogers is one of the original members of Stream’s Investment Management team and has been an influential and driving force behind the team’s growth and achievements since joining the firm in 2016.
Stream said Rogers has a wealth of capital markets experience and a strong track record of investment performance throughout market volatility.
The company said Rogers’ promotion to executive managing director and partner reflects his significant contributions to Stream’s investment management efforts. Rogers will continue to lead Stream’s debt strategies and placement efforts nationally, manage key investments for the platform’s discretionary funds, source strategic opportunities, and serve as a member of Stream’s Investment Committee.
More on Stream’s Investment Management team
Stream said its Investment Management team leverages local knowledge and real-time information gathered by Stream’s market experts across the country to make investment decisions based on current supply and demand fundamentals.
Since its founding in 1996, Stream said it has invested alongside its partners in more than 54 million square feet of office, industrial, mixed-use, and data center space—amounting to approximately $8.8 billion in total capitalization.
The Investment Management team manages five co-mingled funds that account for over $2 billion in equity.
Stream operates 16 core offices in markets that cover areas including Alexandria and Arlington, Va.; Atlanta; Austin, Boca Raton, Fla.; Charleston, S.C.; Charlotte, N.C.; Chicago; Colorado Springs, Colo.; Dallas; Denver; Fort Lauderdale, Fla.; Fort Worth; Greenville, S.C.; Houston; the Inland Empire, Irvine, Calif.; Los Angeles; Miami; Nashville; Orange County, Calif.; Phoenix; Raleigh-Durham, N.C.; Reston, Va.; San Antonio; Tampa, Fla.; Tysons, Va.; Washington, D.C.; and South Florida.
The company said that since 1996, it has grown to more than 1,400 professionals and now completes more than $8.8 billion annually in office, industrial, retail, healthcare, land, and data center transactions.
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Pawel Kentaro, a seasoned real estate expert, is paving the way for investors seeking lucrative opportunities in Latin America through strategic investments in Mexicos dynamic property market. With his unparalleled expertise and in-depth knowledge of the region, Kentaro is opening doors to real estate investment, unlocking the potential for sustainable growth and financial prosperity.
Latin America: A Hotbed of Real Estate Potential: Latin America boasts a diverse and rapidly evolving real estate landscape fueled by economic growth, urbanization, and a rising middle class. Pawel Kentaro recognizes the untapped potential of the region, particularly in Mexico, where favorable demographics, government incentives, and strategic location make it an attractive destination for investors seeking high returns and long-term stability.
Mexico: Gateway to Opportunity: As one of the largest economies in Latin America, Mexico serves as a gateway to opportunity for real estate investors. Kentaro sheds light on Mexicos vibrant property market, characterized by robust demand for residential, commercial, and industrial properties. He highlights key factors driving investment, including demographic trends, infrastructure development, and tourism growth.
Strategic Investment Hubs: Kentaro identifies strategic investment hubs across Mexico, from cosmopolitan cities like Mexico City and Monterrey to resort destinations such as Cancún and Los Cabos. Each region offers unique opportunities for investors, from luxury condominiums and beachfront villas to commercial office spaces and industrial parks.
Navigating Regulatory Landscape: While Mexico presents lucrative investment prospects, navigating the regulatory landscape can be complex. Kentaro provides invaluable insights into legal considerations, land ownership regulations, and tax implications for foreign investors. By offering expert guidance and comprehensive due diligence, he ensures that investors can navigate regulatory hurdles with confidence.
Sustainable Development Initiatives: Kentaro emphasizes the importance of sustainable development in real estate investment. He highlights Mexicos commitment to environmental conservation and community engagement, encouraging investors to prioritize projects that promote eco-friendly practices, social responsibility, and inclusive growth.
Opportunities for Diverse Investors: Whether investors are seeking residential properties, commercial ventures, or hospitality projects, Kentaro provides tailored solutions to meet their diverse needs and objectives. From first-time buyers to seasoned developers, he offers personalized guidance and investment strategies to maximize returns and mitigate risks.
Capitalizing on Market Trends: Kentaro stays ahead of market trends, identifying emerging opportunities and adapting investment strategies accordingly. He monitors shifts in consumer preferences, technological advancements, and global economic trends to ensure that investors capitalize on evolving market dynamics and stay ahead of the curve.
Building Strategic Partnerships: Collaboration is key to success in the real estate industry. Kentaro fosters strategic partnerships with local developers, government agencies, and industry stakeholders to facilitate investment opportunities and drive sustainable growth. By leveraging his extensive network and expertise, he creates synergies that benefit investors and communities alike.
Empowering Investors for Success: Through education, empowerment, and personalized support, Kentaro empowers investors to achieve their real estate goals and unlock their full potential in Latin America. He provides access to exclusive market insights, investment opportunities, and resources, empowering investors to make informed decisions and build wealth for the future.
About Pawel Kentaro
Pawel Kentaro Grendys is a leading expert in Latin American real estate. His background includes residential and commercial experience, and he offers extensive knowledge about local investment laws and building codes.
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David Swensen, a profoundly influential American investor, wielded significant influence in moulding the investment strategies of institutional funds. Having served as the Chief Investment Officer of the Yale University Endowment for close to four decades, David Swensen authored notable works such as “Pioneering Portfolio Management” (2000) and “Unconventional Success” (2005).
Revered beyond the university for his groundbreaking contributions to investment management and mentorship of future leaders in the field, Swensen was equally esteemed within Yale for his dedication as an educator, astute advisor, and spirited member of the university community.
David has bestowed upon the financial world a multitude of investment principles, a selection of which are outlined below.
Focus on asset allocation
Asset allocation represents a nuanced strategy that extends beyond mere diversification. Below is a breakdown of its fundamental components.
Rebalancing: Rebalancing necessitates periodically readjusting the proportions of various asset classes within your portfolio to uphold your desired allocation. Market valuations fluctuate. Rebalancing enables you to seize opportunities by acquiring undervalued assets while averting excessive exposure to overvalued ones.
Risk management: Although diversification plays a significant role in risk mitigation, it’s not the sole factor to consider. An integral aspect of asset allocation entails evaluating the inherent risks associated with each asset class alongside your overall risk tolerance. This could entail implementing measures such as mitigating exposure to high-risk assets amid market volatility, employing hedging techniques to safeguard against particular risks, and choosing investments that match your risk tolerance.
Returns matter
David aimed to highlight asset classes likely to yield higher long-term returns, albeit at the expense of sacrificing a significant level of short- and intermediate-term liquidity. This clarifies why Swensen didn’t limit his investments to conventional stocks and bonds. He sought asset classes offering the prospect of superior long-term returns, even if they lacked liquidity (meaning they couldn’t be readily bought or sold). This readiness to trade off liquidity for potentially greater returns is a fundamental element of the investor’s Yale Model.Also Read: 10 investing principles of Kirk Kerkorian that elevated him to the status of a billionaire
A measured approach towards diversification
David Swensen’s approach to asset allocation was not characterized by a rigid, one-size-fits-all strategy. The Yale Model is recognized for its diversification across multiple asset classes, and one approach he endorsed is a straightforward, equal-weight allocation. Here’s a breakdown of this method:
Various asset classes: The portfolio is segmented into approximately five or six discernible asset categories, such as domestic equities, international equities, real estate, and fixed income.
Equal allocation: Each asset class is allocated a similar proportion of the overall portfolio investment. This streamlines portfolio management and guarantees extensive diversification.
Active management helps
Swensen’s conviction in the value of active management forms the foundation of the model. It emphasizes the utilization of proficient investment managers who strategically select assets to surpass market performance, thereby providing a means to bolster portfolio returns. This differs from individual investors attempting to identify the “hot” stocks independently.
The Yale Model emphasizes investing in asset classes where active management stands a greater chance of success. These often include less efficient markets such as private equity or venture capital, where information may be less readily accessible. Conversely, Swensen acknowledged the challenge of consistently outperforming the market in highly efficient markets like large-cap US equities.
Don’t try to time the market
Swensen recognized the perils associated with market timing and its potential to undermine the success of the Yale Model. Forecasting short-term market fluctuations is notoriously challenging. Swensen likely understood that even the most sophisticated analyses couldn’t ensure success in timing the market. The investor emphasized a long-term investment horizon. Making frequent adjustments based on short-term trends could disrupt the overarching strategy and potentially result in prematurely selling profitable investments or purchasing overvalued assets.
Market timing decisions are frequently guided by emotions such as fear or greed. Swensen probably grasped the significance of disciplined, rational investing founded on thorough research and long-term objectives.
Research well before investing
David Swensen’s focus on extensive research was a cornerstone of the Yale Model and a significant factor in its achievements. Below is an analysis of why meticulous research held such significance for him:
Understanding investment dynamics: By conducting deep research, Swensen aimed to gain a comprehensive understanding of the forces driving an investment’s performance. This included factors like market trends, industry competition, and the company’s business model.
Assessing uncertainty: Investments inherently entail a degree of uncertainty. Swensen utilized research to quantify this uncertainty through the analysis of historical data, simulation exercises, and the evaluation of potential risks.
Assessing competitive edge: A robust competitive position is pivotal for ensuring long-term investment success. Swensen’s research likely centred on identifying companies possessing enduring advantages over their competitors.
Alignment of time horizons: Various asset classes possess differing investment horizons. Swensen utilized research to ensure that investments aligned with the endowment’s long-term objectives and liquidity requirements.
Exploring upside potential and exit strategy: Research contributed to pinpointing the prospective upside of investment and devising a well-defined exit strategy to capitalize on those gains when appropriate.
Contingency planning for worst-case scenarios: Astute investors don’t solely concentrate on favourable outcomes. Swensen’s research probably involved stress-testing potential investments to comprehend their performance under adverse economic conditions.
David Swensen’s enduring legacy persists long after his passing. His insight into the complexities and opportunities confronting investors in their pursuit of successful investment strategies has empowered and informed investors to devise novel approaches to capitalizing on market opportunities and generating returns.
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Almost four in 10 (38 per cent) landlords would like to expand their property portfolio in the next 12 months, research from Lendlord has revealed.
The research, a survey which polled over 200 landlords, found 20 per cent of respondents intend to renovate their properties in the next 12 months, while 42 per cent plan to concentrate their efforts on renting out their existing properties.
Lendlord co-founder and CEO, Aviram Shahar, said: “Despite the wide range of challenges investors are currently facing, there remains a strong appetite among landlords to grow and invest in their portfolios over the next 12 months.
“There is currently high demand for rental property, which alongside the potential for both capital appreciation and steady income growth, continues to make buy-to-let investments appealing in the long run.”
As a result of this market growth and evolution, Shahar said Lendlord users are “well-positioned to seize opportunities and manage challenges”.
Lendlord also looked at the challenges expected, with market fluctuations emerging as the top concern – mentioned by 42 per cent of those surveyed.
This was followed by worries about keeping up-to-date with regulatory changes (38 per cent) and concerns about property maintenance management (20 per cent).
Looking beyond 2024, the overwhelming majority of respondents (82 per cent) expressed a desire to continue growing and expanding their property portfolios.
Meanwhile, just over one in 10 (13 per cent) aimed to focus on managing and building on their existing portfolio, with only 5 per cent prioritising achieving a steady passive income.
tom.dunstan@ft.com
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Real estate as an asset class has long been a mainstay for investor portfolios, both small or large. While it has mostly been focused on residential real estate, the turn of the century brought in another sub-asset class in the form of commercial real estate, which became the go-to product for high net-worth individuals (HNIs), since the rental yields were far higher than residential real estate.
However, the large ticket size meant that the asset class was always exclusive to HNIs or institutional investors. Over the last half a decade, with the advent of tech platforms and listing of Real Estate Investment Trusts (REITs), this asset class has become more accessible to the general public due to smaller ticket sizes in which investors can invest. In order to further stimulate the growth of this asset class, SEBI plans to introduce MSM REITs – a new way to invest into commercial real estate.Also Read: MSM REITs: How SEBI’s game-changing move will transform India’s real estate investment landscape
What are REITs and why is there a need for MSM REITs?
In simple terms, REITs own a portfolio of commercial properties and investors can purchase units of REITs to gain exposure to this portfolio. Similar to investing in units of a mutual fund scheme, investors gain exposure to the portfolio of assets the scheme owns. REITs manage those properties and collect rentals from the tenants occupying them, which is further distributed to its investors.
Currently, there are four listed REITs in India, 2 sponsored by top developers namely Embassy REIT and Mindspace REIT and 2 sponsored by investment managers namely Brookfield REIT and Nexus REIT. Each of these 4 REITs have a diversified portfolio of underlying properties across Tier 1 and Tier 2 cities in India.
However, certain investors want to gain exposure to specific assets, where they know the entire characteristics like the property, tenant, lease structure, yield profile etc. This is where MSM REITs will enable investors to make property specific investments. Extending our example of regular REITs being equivalent to owning units of a mutual fund scheme, MSM REITs can be thought of as being equivalent to owning a share of a single company. It would allow investors to create their own customized portfolio based on their own unique requirements, just like investors can create their own portfolio by picking up shares in multiple stocks.Also Read: Are real estate investors keen on fractional real estate? 3 experts share insights
How can one find the right MSM REIT to invest in?
An investor should understand and research extensively the underlying asset held by a MSM REIT. To get an investor started on the research, have listed a few parameters which an investor should look for:
Quality and location: These two are arguably the most important features, which an investor needs to assess before investing as the best quality tenants occupy the best buildings in the best locations. Therefore, it is important to visit the asset physically, which enables the investor to ascertain the asset quality as well as the surrounding micro-market.
Grade A properties are usually located in Central or Secondary Business Districts of the city. They come with quality amenities, impressive lobbies, LEED or IGBC certification, high ceiling heights and are built by Grade A developers. In case an investor is unable to visit physically, the location of the building along with the quality of the developer and tenant (like Fortune 1000 or Indian top 100 companies) can serve as a good proxy to assess the quality and location.
Lease structure: In a typical commercial lease, the tenant has lock-in for only a small duration of the lease (3-5 years), while the landlord is ‘locked-in’ for the entire lease period (5-15 years). During the lock-in period, the party which is ‘locked-in’ can’t terminate the contract. An attractive MSM REIT would be one in which the remaining lock-in period is at least 2-3 years and the remaining lease period is at least 5 years.
Moreover, it is important to also understand who has invested in the fit-outs. One should prefer an asset where the fit-outs are done by the tenant, as that improves the stickiness of the tenant and reduces the chance of vacation by the tenant.
Demand/supply dynamics: A good quality asset with a good tenant, has to be understood along with the expected demand and upcoming supply in the location. When compared to the demand, if a micro-market sees a much larger upcoming supply, it pushes the vacancy higher, which puts a significantly downward pressure on the rentals as it gives the bargaining power to the tenants to renegotiate the rents.
Hence, an investor should look for markets which have a vacancy below 10% and favorable demand and supply characteristics. The vacancy and demand/supply data are published regularly by research teams of large IPCs (International Property Consultants) like JLL, CBRE and Knight Frank which can be a good starting point for research.
Management quality: The performance of a MSM REIT will be heavily influenced by the quality of its management team. Poor decision-making, lack of experience, or ineffective property management can impact returns. Therefore, an investor is advised to invest in a MSM REIT, whose management team has a proven track record in investing and exiting assets.Also Read: Real estate dominates Indian household savings with highest allocation: Report
Is diversification necessary in MSM REITs?
Just like in any other investment, diversification is important in MSM REITs as well. However, the diversification will now be under the control of individual investors. We have suggested a couple of ways in which an investor can diversify:
Based on asset class: As the industry matures, there will be MSM REITs available across multiple asset classes like office, retail, warehousing, industrial, hospitality, etc. An investor should be able to invest in assets across all of these and benefit from the upward movements of any particular asset class in a cycle. For example, we are beginning to see asset class diversification in regular REITs as well – the first three REITs to be listed were office, post which the first retail REIT got listed last year. MSM REIT can also be expected to follow a similar trend.
Based on geography: Another way to diversify would be investing across multiple cities and minimizing the city risk at a portfolio level. In fact, this risk is present in some of the listed REITs as well. For example, embassy REIT has a significant majority of its portfolio in Bangalore. Having this flexibility to diversify, would allow the investor to pick and choose markets with strong fundamentals like low vacancy and consistent rental growth.
What are the risks involved?
Like any other financial investment, the MSM REITs will come along with its own set of risks which an investor must be aware of before investing. Some important ones are listed below:
Tenancy: Given that the MSM REIT will have only a single or maybe a handful of tenants, the risk of the tenant vacating the property will always be there. To mitigate this, we recommend investors to conduct a thorough research about the market, tenant, as well as the lease structure. Diversifying across multiple MSM REITs will reduce this risk over time as it is unlikely that all of the tenants vacate at the same time.
Interest rate: Similar to any yield oriented product, MSM REITs also have an underlying interest rate risk. When interest rates go up, an investor would expect higher yield as safer investments like FDs and government bonds start offering higher returns. This leads to fall in REIT prices as prices move inversely to yields.
Liquidity: As MSM REITs are expected to be listed on stock exchanges, they will be much more liquid as compared to a direct real estate investment. However, in times of market stress, it may be challenging to sell MSM REIT units at a desired price, just like a regular REIT. Investors can mitigate this risk by allocating capital for the long term (over 4-5 years).
MSM REITs vs. Regular REITs
A key point to note is the difference in the ticket size. While regular REITs have a ticket size of only one unit (having unit size of less than Rs. 400), MSM REITs are expected to have a minimum ticket size of Rs. 10 lakhs. This large ticket size is to ensure that investors perform thorough research before investing given the nascent stage of the industry. However, as time progresses, the ticket size restriction may be relaxed, similar to the way minimum ticket size in REITs was reduced to one unit from Rs. 2 lakhs initially.
In conclusion, MSM REITs will present a unique opportunity to invest in rent generating commercial assets. For investors who want to choose the assets and micro-markets they invest in, it will reduce the minimum ticket size. Moreover, for the developers and holders of institutional asset managers, it will allow them to bring those assets to market, which were earlier too small for regular REITs and too big for HNIs, thereby providing further boost to commercial real estate.Kunal Moktan is CEO and Co-founder, Property Share.
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Shelby Davis, the visionary investor and creator of Davis Funds, has gained legendary status for his adherence to a value-driven investment strategy and commitment to a long-term investment philosophy. Noteworthy similarities exist between Shelby Davis’ investment strategy and the present market conditions.
At the age of 38, Shelby Davis initiated his investment journey with $50,000. Over time, he accumulated a wealth of $900 million, securing a position among the Forbes 400 wealthiest individuals before his passing at the age of 85 in 1994. Here are a few valuable investment insights that we can glean from his experience:
Emphasize value-based investing: Davis advocated for acquiring stocks priced below their intrinsic value. This involved a thorough examination of companies, seeking those with robust fundamentals like consistent earnings growth, a formidable competitive edge, and a stable balance sheet.
Exercise patience: Davis, as a proponent of long-term investing, upheld the practice of retaining stocks for extended periods, even if their values experienced short-term declines. Recognizing the cyclical nature of the stock market, he acknowledged that, over time, sound companies would ultimately witness their stock prices align with their genuine worth.
Manage your emotions: Recognizing the susceptibility to market emotions like fear and greed, Davis emphasized the importance of maintaining discipline. He counselled investors to adhere to their investment plans, especially during periods of market volatility.
Don’t fall for high-flying stocks: The strategy of “buying stocks at any price” is flawed and, in the long run, unsustainable. It is imperative to engage in investing with a more nuanced and disciplined approach. Paying above a company’s intrinsic value exposes you to potential losses if the price adjusts to align with actual worth. Concentrating solely on hype or short-term trends disregards essential factors such as the company’s financials, business model, and competitive landscape.
Make debt work for you: Leveraging debt has the potential to enhance returns. When employed judiciously, borrowing funds for investments can amplify gains, potentially expediting the accumulation of wealth. Davis achieved success by adeptly identifying undervalued stocks and generating returns that surpassed the interest on his borrowed capital.
Write regularly to think better: Contemplating thoughts in our minds can be nebulous and disorganized. Transcribing them onto paper compels us to express ideas, recognize connections, and arrange them coherently. This method fosters a more profound comprehension and unveils any potential gaps or inconsistencies in our thought process.
Invest in three steps: Getting entangled in the pursuit of quick “Earn” or “Return” is tempting, yet overlooking the foundational elements can result in challenges and overlooked opportunities in the future.
The importance of the learning phase is frequently underestimated, as individuals often hurry into the “Earn” stage without establishing a robust knowledge foundation. This hasty approach can result in suboptimal decisions, time squandering, and frustration. Achieving proficiency in intricate skills is a gradual process that demands time and unwavering dedication. It’s not a sprint; rather, it’s a marathon that necessitates persistent effort and patience.
Start investing early in life: Although initiating investments early is commonly perceived as beneficial, the case of George Davis investing later in life illustrates that substantial wealth can still be built, even with a delayed start. Despite commencing later, persistent and intelligent investing can leverage the power of compounding over time. If Davis managed to attain a notable average annual return, initiating investments at the age of 38 could have led to a substantial nest egg by the time of his demise.
Broaden your portfolio: Despite being a proponent of value investing, Davis underscored the significance of diversifying your portfolio across various asset classes and sectors. This strategy serves to mitigate risk and enhances the likelihood of realizing your long-term investment objectives.
Davis achieved success with his investment strategy, delivering substantial returns for his investors throughout his extensive career. Nevertheless, his approach comes with inherent risks. Value investing poses challenges, demanding a considerable amount of patience and discipline. Furthermore, the use of leverage can amplify both gains and losses, adding a layer of complexity to the strategy.
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VANCOUVER, British Columbia, Feb. 25, 2024 (GLOBE NEWSWIRE) — The Asia Pacific Foundation of Canada is pleased to announce the release of Climate Solutions and Cleantech: Building a Greener Indo-Pacific Region Through Foreign Direct Investment providing timely analysis of two-way Canada-Asia investments in renewable energy and electric vehicles (EVs).
APF Canada’s second Investment Monitor Report of 2024, Climate Solutions and Cleantech captures C$29 billion in bilateral investments between Canada and Asia in the renewables sector from 2003 to 2023. The report was released today ahead of the Canada-in-Asia Conferences 2024 event in Singapore (Feb. 26-29), co-hosted by APF Canada and Universities Canada and focused on transpacific collaboration on climate solutions and agri-food.
Understanding major trends in the Canada-Asia renewable energy and EV investment relationship over the past 20 years will better position today’s Canadian cleantech companies for successful integration into regional supply chains across the fast-growing and dynamic economies of the Indo-Pacific region.
Highlights of Climate Solutions and Cleantech: Building a Greener Indo-Pacific Region Through Foreign Direct Investment include:
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In the renewables sector, Canadian outward investment accounted for 70% of two-way renewables investment between Canada and the Asia Pacific during the 20 years between 2003 and 2023. In the EV sector, meanwhile, 64% of two-way investment was driven by Asian economies.
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At the national level, the report shows Canadian investment diversification from China, with an increase in two-way investment with Australia, Taiwan, India, and South Korea that started in the 2010s and has since grown to comprise 67% of total two-way investment.
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China is Canada’s fifth-largest investment partner, with C$3.4B exchanged between 2003 and 2022, but this is primarily due to investments in the 2000-2010 period and is not a reflection of recent trends.
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At the subnational level, three of Australia’s states – New South Wales, Western Australia, and Queensland – accounted for 25% of Canadian investment in renewable energy and EVs in the region.
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On the Canadian side of the investment relationship, the province of Ontario has been the largest recipient of Asian investment in renewables and EVs in Canada, attracting almost 90% of this investment (C$10.4B) over the past 20 years. Nearly one-half of this amount was invested in Ontario in the last four years, suggesting that province’s push to become an EV hub may be starting to pay off.
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State-owned-enterprises (SOEs) play an outsized role in Canada-Asia clean technology investment; over the past decade, the majority of SOE investment was from Canadian SOEs, all of which were Canadian pension funds, accounting for 74% of total two-way SOE investment since 2003.
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Furthermore, 98% of this investment from Canadian pension funds occurred in the past five years, which suggests these Canadian SOEs are anticipating continued growth in the clean technology sector.
Climate Solutions and Cleantech: Building a Greener Indo-Pacific Region Through Foreign Direct Investment draws on data from the Asia Pacific Foundation of Canada’s Investment Monitor database, which provides information on Canada-Asia Pacific investment flows at the national and sub-national levels. The database is publicly available on the Investment Monitor website, investmentmonitor.ca.
Learn More:
The Asia Pacific Foundation of Canada is a not-for-profit organization focused on Canada’s relations with Asia. Learn more about the Foundation at www.asiapacific.ca
Media Contact:
Asia Pacific Foundation of Canada
Michael Roberts, Communications Director
michael.roberts@asiapacific.ca
Over the past month, my 6-year-old son and I have been learning how to solve the Rubik’s Cube – and here is something that got me thinking. It is incredibly difficult to solve the Rubik’s cube, much like navigating the complexities of investing. The cube has 43 quintillion combinations, and if you stare at it long enough, you will find it mind-boggling. Similarly, even investors with several years of experience and expertise find investing challenging.
A Rubik’s cube has multiple interconnected parts; one wrong move can take you back to square one. Investing is similar – myriad factors, such as inflation, currency, interest rates, company profits, company management, etc., hold sway over investment success, and one wrong investment decision may lead to significant losses. No wonder those who crack the code, i.e., solve the cube or become successful investors, are raised to a pedestal, and treated as geniuses.
Does this mean that if you are not a genius, all your attempts at solving the cube or investing are in vain? Fortunately, no.
Here are some parallels that I figured between investing and solving the Rubik’s cube:
Building muscle memory is essential to succeed: Practice. Practice. Practice. Solving the cube on your first try would be nearly impossible. You need to keep practising, learn tricks along the way and build muscle memory such that it eventually falls into place.
Investing world parallel: The same principle applies to investing. Investors and advisors who spend decades investing develop muscle memory that makes them better investors. Their expertise stems from having gone through similar trends multiple times over decades – and they can leverage this experience to distil noise while advising clients.
Rule-based approach: In the Rubik’s cube realm, there is a stark contrast between a structured approach—often termed ‘algos’—and haphazard, erratic steps. Unsurprisingly, the structured approach is a clear winner. These ‘algos’ offer a streamlined path, enabling swift progression through the cube’s complexities and eliminating tedious backtracking. Over time, these algorithms become ingrained, eventually becoming second nature in solving the cube.
Crafting strategic foundation: Investing success also involves a series of processes with multiple checklists, protocols, and sub-activities that can institutionalise the process of investing. Jumping between steps or being haphazard is a recipe for disaster. Steps such as creating a detailed plan or an IPS (Investment Policy Statement), focusing on asset allocation, strategy around security selection, a stringent review mechanism and being vigilant on cost, can form a foundation on which to build your investing success. For experienced advisors, these steps almost come naturally, almost like Rubik’s Algos.
Role of imagination, innovation, and honing the cutting edge
The record time to solve the cube has come down from one month (1974) to 23 seconds (1982) to today’s world record of 3.13 seconds. This staggering reduction in solve time is due to profound innovation in three areas:
a) Physical attributes of the cube, for example, drift, speed cubes, etc., b) Worldwide acceptance and availability of resources and training, and c) Intuition-driven speed-solving algos such as F2L, CFOP, ZZ.
Transformative Shifts: Pertaining to the investment landscape of India’s sophisticated investors, we are witnessing transformative changes driven by innovation, deepening of talent pools and implementation of global best practices and supportive regulations. Consider this:
Innovation: Innovation in products and platforms such as REITs, private equity, AIFs, large value funds (LVFs), are expanding the HNI and UHNI investment landscape. Investors can choose from a wide range of portfolio managers, advisors or distributors that are the ‘right fit’ for them. This rapid innovation is unlocking phenomenal opportunities for sophisticated investors.
Talent pool: Enabling regulations such as the IBC Code, RIA regulations and more lowers entry barriers for talented managers, creates a level playing field and protects the rights of investors. This opens a large segment of the talent pool which looks at investing as a viable career – leading to greater innovation and better investment frameworks – a virtuous cycle!
Global best practices: India is embracing global best practices across Mutual Funds, PMS, AIF and RIA regulations. Through the GIFT City initiative, we are becoming a jurisdiction of choice, both for Indian investors to access foreign markets or for foreigners to invest in India. Not surprisingly, we are seeing ever-increasing flows into financial investments from across the ecosystem, including mature investors such as family offices and institutions.
Although there is no hidden formula for mastering the game, adhering to a consistent and disciplined approach can be the key to attaining the ultimate prize in both conquering the cube and excelling in the art of investing.
Himadri Chatterjee, Head, Advisory & Key Clients Group, 360 ONE Wealth
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