Business Ventures
My professional career covers multiple disciplines and industries, with stints in New York, London, Abu Dhabi and Singapore.
For me, Equity Research is a special area of Finance that requires the analyst to demonstrate, arguably, the maximum level of versatility in skills and knowledge. To summarise a very long list of responsibilities: an analyst should be able to regularly pour over financial statements of the companies in their coverage, quickly and accurately react to publications related to their coverage, hold individual interviews with CEOs of often multi-billion dollar companies, attend industry and company conferences, distill a plethora of information from numerous other sources into genuine conclusions and takeaways, and publish them in a succinct manner that will not alienate the reader with onerous voluminosity while providing enough detail to support the stock recommendation. Oftentimes, good analysts also publish multi-volume industry primers and special reports on various topics. In other words, a research analyst is a “one stop shop” for a journalist, a writer, an accountant, a psychologist, and even sometimes a weightlifter (we’ll come to that shortly).
I was lucky to start my career on the team of the renowned Wall Street analyst Mike Mayo. Mike doesn’t need any introduction – known for his original and independent work, he is well-recognized for his research as demonstrated by a great number of Institutional Investor (II) Awards that he’s won in the past 4 decades of covering the largest banks in the world (II Rankings are like Oscars Awards for Wall Street). A pioneer of independent research starting from the days when investment banks would try to influence research analysts in order to win clients’ business, Mike was going against the established ‘norms.’ While his unorthodox approach made him unpopular with certain overzealous bankers, he eventually prevailed as the industry was fundamentally reshaped by sweeping regulatory reforms in 2003 which separated investment banking and research.
Working with Mike and embracing this David v. Goliath philosophy augmented by the drive for originality had a profound impact on me. It got shaped into a guiding principle reinforcing my desire to carve out a distinguished and independent path in the world.
PS: Weightlifting typically isn’t on your generic list of responsibilities on Wall Street. I did bring it up however as a testament to Mike’s originality!
It was during my year as an exchange student in Indiana, as part of the Future Leaders Exchange Program, that I had a unique opportunity to familiarise myself with this very special sector. Having been brought up in a relatively large city of 2 million inhabitants, at the age of 17 I had no idea what it meant to live on a farm in the vast sea of corn fields that is America’s famed Corn Belt. Thanks to my very welcoming host family, which ran a successful farming and fence-building business, I swiftly adapted and joined them in their daily work, picking up skills which most of us city-dwellers would rarely think of. (This is also where I acquired my penchant for country music!)
Even more importantly than those skills, I also learned to appreciate the hard work that goes into producing the food we all consume. Little did I know that this knowledge and respect for agriculture would come in handy when I joined an investment fund in New York right after graduating from my MBA.
The fund’s primary theme was food and agriculture, with a global mandate. My coverage was Ukraine, Kazakhstan, and Russia. Very soon I was traveling in the fertile black earth (chernozem soil) belt spanning these three countries, meeting farmers, food producers, commodity traders, and supermarkets – pretty much everyone involved in the “farm to plate” value chain.
Post-Soviet agriculture in those years was just getting resuscitated from the ruins of collective farming. Kolkhoz’s sitting on the most fertile land on the planet had been in total collapse, and in an extraordinary effort of revival, very hard-working farmers and entrepreneurs were now building new businesses and needed capital to fuel their growth. In my travels, I’ve come across numerous truly inspiring people, each with their unique path and stories.
As one example: in central Russia, I met a farming entrepreneur who struggled with large supermarket chains accepting his produce. Established supermarkets in Moscow were typically slow to adopt new suppliers. After many months of hitting the wall with one fancy Moscow grocery store, the entrepreneur found a creative marketing solution – in the middle of the night, he simply shipped and dumped several tonnes of potatoes in front of the store’s loading gates. The supermarket chain had no choice but to accept the product which in fact gave start to a healthy cooperation.
Renewable energy is a sector whose importance cannot be overstated. Supported originally by government subsidy regimes that came in various forms and shapes, this sector is now thriving due to more publicity (growing attention to climate change), lower capital costs (thanks to technological improvements) and higher energy prices (i.e. shorter payback period).
These developments have equally resulted in the renewables sector becoming a crowded space with many investors chasing a relatively limited number of projects, especially in jurisdictions with a strong rule-of-law. Like in any sector – especially one in which governments play a significant role – a lot of investment capital for renewables would flock to the developed economies, while more frontier markets remained underserved. This over-concentration inspired me to look for opportunities in the renewables space in emerging markets. To navigate the higher risk of these economies, our approach included partnering with global blue-chip strategic players, which meant not only excellence in execution and operational capability, but also an opportunity to access best-in-class technology in energy generation and trading.
The landscape is evolving rapidly, expanding in size and sophistication. If, initially, solar and wind energy dominated the renewables sector, today’s ever-growing focus on environmental sustainability – including initiatives like the UN-led Net Zero and COP – has trigged a dramatic evolution of this space over the past two or so decades, leading to the development of countless new, innovative technologies. By-products of aluminium production are now being used to manufacture soil and industry innovators are contemplating massive CO2 storage in the Earth’s crust. These are the types of innovative projects I came come across while attending the COP28 in Dubai last year. However, a lot more is needed to reach the targets we as corporations, governments, communities, and individuals have set to limit the dangerous effects of global warming. If there was one space that I would be super excited about were I graduating from college or from an MBA right now, it would be sustainability (along with tech).
PS: I’m extremely delighted that COP29 will be held in Baku, Azerbaijan – don’t miss it!
