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.