67 WALL STREET, New York - January 10, 2012 - The Wall Street Transcript has just published its SRI Investing and Other Investing Strategies Report offering a timely review of the sector to serious investors and industry executives. This SRI Investing and Other Investing Strategies Report expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Impact Investing Strategy - Limiting Market Risk - Quantitative Investing - Volatile Market
Companies include: Amazon (AMZN); Berkshire Hathaway (BRK-A); Ford (F); General Electric (GE) and many more.
In the following brief excerpt from the SRI Investing and Other Investing Strategies Report, interviewees discuss the outlook for the sector and for investors.
Gloria S. Nelund, Chairman and Chief Executive Officer of TriLinc Global, co-founded the company after spending her career as an executive in the international asset management industry. She brings to TriLinc more than 30 years of experience in executive management of financial institutions. Most recently, she served as CEO of the U.S. private wealth management division at Deutsche Bank, the world's fifth-largest financial institution. Before Deutsche Bank, Ms. Nelund spent 16 years as an Executive at Bank of America Corporation/Security Pacific Bank, most notably as President and CEO of BofA Capital Management, Inc., an investment management subsidiary. She also spent five years as Manager of worldwide sales and marketing of BofA Global Asset Management and three years as CEO of InterCash Capital Advisors, Inc., an investment management subsidiary of Security Pacific Bank. Ms. Nelund is an independent Trustee for RS Investments, a mutual fund complex. She currently sits on the board of several not-for-profit organizations and supports entrepreneurship research and education through the Massachusetts Institute of Technology, including as a Guest Lecturer.
TWST: Would you give us some sample investments, some ideas of what you're looking at right now?
Ms. Nelund: One that we like to talk about is a shoe manufacturer in Ethiopia. Ethiopia is the second-most-populated country on the African continent, and they have one of the fastest-growing economic growth rates in the world. While we think of Ethiopia still as a poor country, it actually represents a strong growing economy. One of our subadvisers identified a shoe manufacturer that is one of the leading shoe manufacturers in Ethiopia. They make their shoes from 100% recycled materials. Their shoes now are starting to gain global attention, and they have the opportunity for broader distribution. In fact, they got an order through Amazon (AMZN) to do a shipment of shoes to Europe, but couldn't afford to finance that shipment.
The way the business works, they manufacture the shoes and then there is a couple of weeks while that shoe shipment makes it to Europe and a couple of more weeks or maybe even a month before Amazon pays them for that shipment. So they need access to short-term trade finance capital, but don't have any access to that kind of capital. One of our subadvisers does trade finance. Basically, they can provide pretty traditional trade finance to this shoe manufacturer. By providing that financing, the company can make that shipment, which means they can sell a lot more shoes, and as a result, can employ about 20 more people in their factory. It allows them to grow their exports by about 25% a year. The other side benefits are that the average wage of their workers can go up, because not only can they hire people, they can raise their wages because the company makes more money and they can start providing medical coverage to all of their employees and their families. A fund like our TriLinc fund can provide financing to companies like this, and our investors make a good return on that investment - a lot of good things can happen.
TWST: How do you find these types of investments? Is it through the subadvisers?
Ms. Nelund: Yes, our subadvisers are key to our strategy. They are local, in-country, feet on the ground sourcing and structuring deals. All of our subadvisers have been doing this a long time for their other investors through their other strategies, so they have plenty of deal flow. Most of them have the same problem - they could do a lot more deals if they had more capital, but it is time consuming and difficult to attract significant capital. So we are a steady source of capital for them to allow them to just do more of what they're already doing.
TWST: What are the major macro issues on the horizon that are either going to help or hurt your investments?
Ms. Nelund: Mostly the trends we see are very favorable to us. I'll give you a couple of them. One is that we expect that interest rates in the larger developed economies, like the U.S., to stay extraordinarily low for the foreseeable future. I think that is a pretty common outlook. From an investor perspective though, that means that income-producing investments will continue to be very attractive for the next five years or so. So for attracting capital, we feel like this is a very favorable trend for our retail fund. From an investment perspective, there are a couple of trends that are really working in our favor. One is that while the U.S. and all of the developed economies are very overleveraged, the emerging market economies are very underleveraged. Debt-to-GDP ratios in the developed economies are well over a 100% and only in the low 30s in the emerging economies. This provides a tremendous opportunity for growth as they are still trying to grow and lever up.
There are also other things that you can look at on a specific country basis - for example, trade balances in some of these countries are very low, which creates opportunity for exports and imports, resulting in opportunity for small businesses to be able to grow. And also in these developing economies, they will benefit from productivity growth over the next few years as they work to catch up from a technological perspective. Additionally, they have more young working people relative to their population, which will continue to drive their economy. Ultimately, while the developed economies will continue to see relatively slow growth, the emerging economies represent really good opportunities and growth from an investor perspective.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This SRI Investing and Other Investing Strategies Report is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
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