Paul Robinson, CEO of Alquity spoke about capitalism and transforming the financial industry to change the world as the company rebranded and launched a new emerging market fund. The full text of the speech is below.
A kick-about that changed everything…
For me, this journey started with a ball. It’s amazing how something so simple can turn out to be a life-changing moment . . .
t was 1996 and I was in the middle of a year off, driving through Malawi with some other travellers. We stopped to play football with a group of African kids. Once you start a game like that, you rapidly attract every kid within a 3 mile radius! It was great, but after an hour or so, it was time for us to go – and the kids looked really miserable.
Now obviously, I thought that was because they where going to miss our silky football skills. (Kicks ball into audience) But it wasn’t that. Those kids were sad because they thought we were going to take the ball with us. That really hit me.
That for those kids, a tatty old football was so valuable and out of reach . . .
The issue: capitalism isn’t working
OK, let me put my cards on the table.
I am Paul Robinson, and I believe in capitalism. I believe in free markets. I believe in meritocracy. I believe in people working hard and achieving fantastic things, through their own talents and efforts.
But that isn’t the kind of capitalism we have today.
Our version of capitalism is broken. I don’t think anyone in this room needs me to rant about the inequities of our current system – about the obscenity of bankers’ bonuses, or about massive scale corporate tax dodging, or about workers in poor countries being forced into virtual slavery, so that we can wear ridiculously cheap throw-away clothes . . .
So let’s just say that we’ve allowed capitalism to ‘go rogue’ – with the result that we now live in a world that is profoundly unfair.
A world where the biggest factor determining a child’s future is not how smart they are or how hard they work, but simply where they were born.
It isn’t a level playing field. It’s nowhere near being one – and if we care about the future, and want to see a fairer world, we have to change that. We have to find a way of giving everyone a chance to win.
Alquity: here to fix capitalism
We started in 2010 – and, in the scheme of things, we’re still quite a small investment fund management company.
But we have very big ambitions.
Our mission is nothing less than to transform how people invest, to create a better, fairer world for all.
Or, to put it more succinctly, we’re here to fix capitalism.
Perhaps I’d better tell you how we’re going to do that . . .
The Alquity difference
Alquity is, genuinely, different. We’re not just another ethical or sustainable investment fund company.
We’ve developed our own entirely new investment model, based on a Virtuous Circle that’s in everyone’s best interests.
It’s an approach that transforms investment by making it a two-way street – based on the principle that wherever in the world we pursue profit, we should also put something back . . . in order to create opportunity and strong local economies that will, over time, result in our investments performing even better. So everyone wins.
Let me briefly talk you through our VIRTUOUS CIRCLE…
So, first, attractive returns. At Alquity, we absolutely believe you do not need to sacrifice profits for principles.
We’ve got brilliantly talented fund managers and we give them complete freedom to follow their convictions. Even more important, we invest in the world’s most exciting emerging economies.
We started by focusing on Africa, the last great unexplored market, home to seven of the world’s ten fastest growing economies. And over time, we’ve widened our horizons to take in the massive growth potential of Asia and Latin America.
I’ll talk a bit about our funds’ performance in a moment, but let’s just say for now that what we do at Alquity is in the true capitalist spirit of Adam Smith – enlightened self-interest, at its most rewarding.
Next up, responsible investments…by which we mean that at Alquity, we believe doing good is good business, so we only invest in responsible, well managed companies.
To help us do that, we use a rigorous selection process that takes into account environmental, social and governance factors – which we call forward-looking ESG.
It’s a highly effective way of picking winners, ensuring that we only back companies with a clear and sustainable advantage over their competitors.
Which brings us to transforming lives – and building local economies.
So this is where we put something back in: at Alquity, we donate up to 25% of our fee revenue to local communities where we invest. Specifically, we do that by working with fantastic partners running microfinance schemes to help local entrepreneurs get businesses off the ground.
Just let me introduce you, very briefly, to Mercy Senyehah…
Four years ago, Mercy was working as a primary school teacher in Accra, Ghana.
Her husband got into serious debt, and they had to sell their home. Then he left her, and Mercy moved to a village in eastern Ghana.
With her very small savings, she rented a plot of land to start a school, and she received her first loan – equivalent to around £300 – from one of Alquity’s partners, Opportunity International. She used the money to build classrooms, and she soon had over 100 pupils.
Since then, with further loans funded by Alquity, the school has gone from strength to strength – and Mercy is now giving around 250 children an education, which they wouldn’t otherwise have access to…and a chance to achieve their full potential in life.
Again, I need to stress that we’re not helping to transform the lives of people like Mercy – and the children she teaches – just because it feels good to help people lift themselves out of poverty. We’re doing it because creating consumers, fostering ambition, and strengthening local economies is – in the long term – very good indeed for our investments. Again, everyone wins.
So that’s the Alquity difference – an investment model that only backs good, responsibly run businesses with a sustainable competitive advantage…that focuses on the world’s most exciting emerging markets, seeking out new opportunities that will deliver really good returns…and that re-invests in local communities, supporting entrepreneurs and creating consumers in a way that will help to deliver even better returns to our investors. And here’s the really good news: our radically different new investment model works . . .
Delivering proof of concept, and building on it
As I mentioned, we started in 2010 with our Africa Fund – investing in large cap quoted equities, right across the continent, and in 12 different sectors.
By applying our investment approach – leaving our fund managers to seek out the next story, not the last story – using forward-looking ESG to get under the skin of investment prospects – we’ve delivered risk adjusted returns that most other funds can’t match…with our forward looking ESG helping give us the lowest levels of volatility among our peer group.
In short, our Africa Fund has provided proof of concept. That circle I talked about is demonstrating that virtue can be very rewarding.
Our Latin America, Asia and Indian Subcontinent Funds, based on precisely the same principles, are all up and running.
And tonight, I’m very pleased to be announcing the arrival of a new fund – one that brings it all together, covering 82% of the world’s population, over 50% of the world’s GDP and all of the most exciting emerging markets.
We call it Future World – not just because it’s about what the world will become, but because, through our new investment model, we have the chance to shape how we want the world to be.
Transforming our industry, changing the world
I think I know what you may be asking yourselves, listening to me this evening: “Do these guys seriously believe that one fairly small fund management company is really going to transform the way people invest, fix our broken capitalist system, and make the world a better, fairer place for all?”
Well, yes I seriously do believe that.
Of course, we don’t expect to accomplish all that on our own. But we won’t have to. Because the world is ready for change, and our new investment model is an idea whose time has come.
We live in an age of transformation. Politically, socially, technologically, everything is up for grabs. And nowhere is there a greater hunger for change than in relation to financial services and, more broadly, economic development.
The idea that our system is broken and that we need a new version that works better for all is rapidly moving into the mainstream. The recent conference on Inclusive Capitalism held in London was attended by Mark Carney, Bill Clinton and Christine Lagarde, among many others – major pillars of the old order who clearly acknowledge the urgent need for a new and better way of doing things.
Everyone knows that we can’t go on with old smash-and-grab, get-rich-quick and to-hell-with-the-consequences approach for much longer.
So yes, against that backdrop, we do passionately believe that if Alquity can prove, categorically, that there is a better, fairer way of investing that backs good businesses, delivers attractive returns, and transforms thousands – and potentially millions – of lives, others will be very quick indeed to follow our lead.
I believe Alquity can play a vital role in starting to transform the relationship between business and our wider society.
I believe Alquity can, over time, play a vital role in transforming the way the world invests.
Ubuntu: where change begins
I’m going to end where I began, in Africa.
When we started Alquity, one of the values we adopted was Ubuntu – an idea from southern Africa that means, roughly, “I am because we are”.
What it means in practice was brought home to me a few years ago on a trip to Lesotho. I was visiting a local and before we left, we handed out oranges to the kids and despite having two crates, I found myself left with one orange and ten kids gathered round, all wanting it.
In my competitive western way, I pointed to a nearby tree and told the kids that the first one to run round it and back would get the orange. Off they all went, and then as they reached the tree, something amazing happened. They all joined hands and ran back together. When I asked why, one of them said, “How can one of us be happy while the others are sad?”
That’s Ubuntu. That’s the spirit of Alquity. That’s what will inspire us to transform investment, and create a better, fairer world for all.
By joining us this evening, you’ve become part of the Alquity story. If you want change, it starts here.
2017 Was the Most Expensive Year Ever for U.S. Natural Disaster Damage
Devastating natural disasters dominated last year’s headlines and made many wonder how the affected areas could ever recover. According to data from the U.S. National Oceanic and Atmospheric Administration (NOAA), the storms and other weather events that caused the destruction were extremely costly.
Specifically, the natural disasters recorded last year caused so much damage that the associated losses made 2017 the most expensive year on record in the 38-year history of keeping such data. The following are several reasons that 2017 made headlines for this notorious distinction.
Over a Dozen Events With Losses Totalling More Than $1 Billion Each
The NOAA reports that in total, the recorded losses equaled $306 billion, which is $90 billion more than the amount associated with 2005, the previous record holder. One of the primary reasons the dollar amount climbed so high last year is that 16 individual events cost more than $1 billion each.
Global Warming Contributed to Hurricane Harvey
Hurricane Harvey, one of two Category-4 hurricanes that made landfall in 2017, was a particularly expensive natural disaster. Nearly 800,000 people needed assistance after the storm. Hurricane Harvey alone cost $125 billion, with some estimates even higher than that. So far, the only hurricane more expensive than Harvey was Katrina.
Before Hurricane Harvey hit, scientists speculated climate change could make it worse. They discussed how rising ocean temperatures make hurricanes more intense, and warmer atmospheres have higher amounts of water vapor, causing larger rainfall totals.
Since then, a new study published in “Environmental Research Letters” confirmed climate change was indeed a factor that gave Hurricane Harvey more power. It found environmental conditions associated with global warming made the storm more severe and increase the likelihood of similar events.
That same study also compared today’s storms with ones from 1900. It found that compared to those earlier weather phenomena, Hurricane Harvey’s rainfall was 15 percent more intense and three times as likely to happen now versus in 1900.
Warming oceans are one of the contributing factors. Specifically, the ocean’s surface temperature associated with the region where Hurricane Harvey quickly transformed from a tropical storm into a Category 4 hurricane has become about 1 degree Fahrenheit warmer over the past few decades.
Michael Mann, a climatologist from Penn State University, believes that due to a relationship known as the Clausius-Clapeyron equation, there was about 3-5 percent more moisture in the air, which caused more rain. To complicate matters even more, global warming made sea levels rise by more than 6 inches in the Houston area over the past few decades. Mann also believes global warming caused the stationery summer weather patterns that made Hurricane Harvey stop moving and saturate the area with rain. Mann clarifies although global warming didn’t cause Hurricane Harvey as a whole, it exacerbated several factors of the storm.
Also, statistics collected by the Environmental Protection Agency (EPA) from 1901-2015 found the precipitation levels in the contiguous 48 states had gone up by 0.17 inches per decade. The EPA notes the increase is expected because rainfall totals tend to go up as the Earth’s surface temperatures rise and additional evaporation occurs.
The EPA’s measurements about surface temperature indicate for the same timespan mentioned above for precipitation, the temperatures have gotten 0.14 Fahrenheit hotter per decade. Also, although the global surface temperature went up by 0.15 Fahrenheit during the same period, the temperature rise has been faster in the United States compared to the rest of the world since the 1970s.
Severe Storms Cause a Loss of Productivity
Many people don’t immediately think of one important factor when discussing the aftermath of natural disasters: the adverse impact on productivity. Businesses and members of the workforce in Houston, Miami and other cities hit by Hurricanes Harvey and Irma suffered losses that may total between $150-200 billion when both damage and sacrificed productivity are accounted for, according to estimates from Moody’s Analytics.
Some workers who decide to leave their homes before storms arrive delay returning after the immediate danger has passed. As a result of their absences, a labor-force shortage may occur. News sources posted stories highlighting that the Houston area might not have enough construction workers to handle necessary rebuilding efforts after Hurricane Harvey.
It’s not hard to imagine the impact heavy storms could have on business operations. However, companies that offer goods to help people prepare for hurricanes and similar disasters often find the market wants what they provide. While watching the paths of current storms, people tend to recall storms that took place years ago and see them as reminders to get prepared for what could happen.
Longer and More Disastrous Wildfires Require More Resources to Fight
The wildfires that ripped through millions of acres in the western region of the United States this year also made substantial contributions to the 2017 disaster-related expenses. The U.S. Forest Service, which is within the U.S. Department of Agriculture, reported 2017 as its costliest year ever and saw total expenditures exceeding $2 billion.
The agency anticipates the costs will grow, especially when they take past data into account. In 1995, the U.S. Forest Service spent 16 percent of its annual budget for wildfire-fighting costs, but in 2015, the amount ballooned to 52 percent. The sheer number of wildfires last year didn’t help matters either. Between January 1 and November 24 last year, 54,858 fires broke out.
2017: Among the Three Hottest Years Recorded
People cause the majority of wildfires, but climate change acts as another notable contributor. In addition to affecting hurricane intensity, rising temperatures help fires spread and make them harder to extinguish.
Data collected by the National Interagency Fire Center and published by the EPA highlighted a correlation between the largest wildfires and the warmest years on record. The extent of damage caused by wildfires has gotten worse since the 1980s, but became particularly severe starting in 2000 during a period characterized by some of the warmest years the U.S. ever recorded.
Things haven’t changed for the better, either. In mid-December of 2017, the World Meteorological Organization released a statement announcing the year would likely end as one of the three warmest years ever recorded. A notable finding since the group looks at global land and ocean temperature, not just statistics associated with the United States.
Not all the most financially impactful weather events in 2017 were hurricanes and wildfires. Some of the other issues that cost over $1 billion included a hailstorm in Colorado, tornados in several regions of the U.S. and substantial flooding throughout Missouri and Arkansas.
Although numerous factors gave these natural disasters momentum, scientists know climate change was a defining force — a reality that should worry just about everyone.
How to be More eco-Responsible in 2018
Nowadays, more and more people are talking about being more eco-responsible. There is a constant growth of information regarding the importance of being aware of ecological issues and the methods of using eco-friendly necessities on daily basis.
Have you been considering becoming more eco-responsible after the New Year? If so, here are some useful tips that could help you make the difference in the following year:
1. Energy – produce it, save it
If you’re building a house or planning to expand your living space, think before deciding on the final square footage. Maybe you don’t really need that much space. Unnecessary square footage will force you to spend more building materials, but it will also result in having to use extra heating, air-conditioning, and electricity in it.
It’s even better if you seek professional help to reduce energy consumption. An energy audit can provide you some great piece of advice on how to save on your energy bills.
While buying appliances such as a refrigerator or a dishwasher, make sure they have “Energy Star” label on, as it means they are energy-efficient.
Regarding the production of energy, you can power your home with renewable energy. The most common way is to install rooftop solar panels. They can be used for producing electricity, as well as heat for the house. If powering the whole home is a big step for you, try with solar oven then – they trap the sunlight in order to heat food! Solar air conditioning is another interesting thing to try out – instead of providing you with heat, it cools your house!
2. Don’t be just another tourist
Think about the environment, as well your own enjoyment – try not to travel too far, as most forms of transport contribute to the climate change. Choose the most environmentally friendly means of transport that you can, as well as environmentally friendly accommodation. If you can go to a destination that is being recommended as an eco-travel destination – even better! Interesting countries such as Zambia, Vietnam or Nicaragua are among these destinations that are famous for its sustainability efforts.
3. Let your beauty be also eco-friendly
We all want to look beautiful. Unfortunately, sometimes (or very often) it comes with a price. Cruelty-free cosmetics are making its way on the world market but be careful with the labels – just because it says a product hasn’t been tested on animals, it doesn’t mean that some of the product’s ingredients haven’t been tested on some poor animal.
To be sure which companies definitely stay away from the cruel testing on animals, check PETA Bunny list of cosmetic companies just to make sure which ones are truly and completely cruelty-free.
It’s also important if a brand uses toxic ingredients. Brands such as Tata Harper Skincare or Dr Bronner’s use only organic ingredients and biodegradable packaging, as well as being cruelty-free. Of course, this list is longer, so you’ll have to do some online research.
4. Know thy recycling
People often make mistakes while wanting to do something good for the environment. For example, plastic grocery bags, take-out containers, paper coffee cups and shredded paper cannot be recycled in your curb for many reasons, so don’t throw them into recycling bins. The same applies to pizza boxes, household glass, ceramics, and pottery – whether they are contaminated by grease or difficult to recycle, they just can’t go through the usual recycling process.
People usually forget to do is to rinse plastic and metal containers – they always have some residue, so be thorough. Also, bottle caps are allowed, too, so don’t separate them from the bottles. However, yard waste isn’t recyclable, so any yard waste or junk you are unsure of – just contact rubbish removal services instead of piling it up in public containers or in your own yard.
5. Fashion can be both eco-friendly and cool
Believe it or not, there are actually places where you can buy clothes that are eco-friendly, sustainable, as well as ethical. And they look cool, too! Companies like Everlane are very transparent about where their clothes are manufactured and how the price is set. PACT is another great company that uses non-GMO, organic cotton and non-toxic dyes for their clothing, while simultaneously using renewable energy factories. Soko is a company that uses natural and recycled materials in making their clothes and jewelry.
All in all
The truth is – being eco-responsible can be done in many ways. There are tons of small things we could change when it comes to our habits that would make a positive influence on the environment. The point is to start doing research on things that can be done by every person and it can start with the only thing that person has the control of – their own household.
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