Investing in African power plants can boost returns, provide a hedge against global market shocks, and help lift people out of poverty, says Jerome Booth.
The chairman of London-based New Sparta Asset Management Ltd. takes it a step further: For investors, not having such assets in a portfolio is “irresponsible,” he says.
Booth has strong opinions about emerging markets. An economist, he was part of the management group that in 1999 established Ashmore Group Plc, an emerging-markets-focused investment manager in London that now oversees $92 billion. After retiring from Ashmore in 2013, Booth started New Sparta, wrote Emerging Markets in an Upside Down World: Challenging Perceptions in Asset Allocation and Investment (Wiley, 2014), and was appointed chairman of Anglia Ruskin University’s board of governors.
He personally invested about $10 million in developing a power plant in Northern Ghana, alongside Erling Lorentzen, founder of Brazilian forest products producer Aracruz Celulose SA. That project has spent $70 million on a forest of eucalyptus trees to provide biomass fuel and now awaits a so-called put and call option agreement, which is economically equivalent to a government guarantee, according to Booth. Once that’s in hand, the plant’s owners plan to raise up to $350 million in financing, mostly debt, to get to production.
JAMES CROMBIE: Why are you investing in African power?
JEROME BOOTH: Energy is the biggest bottleneck to economic development in Africa. Investing in emerging markets—including in illiquid things like power stations—is a way to not just increase returns and diversify your portfolio, it’s a way fundamentally to reduce risk. If you don’t do it, you’re actually concentrating your portfolio in a highly risky way, which is imprudent and irresponsible.
Denne historien er fra August - September 2019-utgaven av Bloomberg Markets.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra August - September 2019-utgaven av Bloomberg Markets.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
See Which Countries Are Falling Behind On Climate Change
Under the Paris Agreement, 190 countries and the European Union pledged to take steps to hold the global temperature rise to less than 2C (3.6F) from preindustrial levels—and preferably 1.5C.
Billionaires Vie for the Future of Brazilian Finance
An escalating battle between two billionaires is upending the financial community in São Paulo, Latin America’s wealthiest city.
Ford Foundation's Darren Walker: ‘We Have to Get Uncomfortable'
DARREN WALKER, 62, disrupted his Wall Street life more than 25 years ago when he left what is now UBS Group AG to volunteer at a school and eventually pursue a career in community development and philanthropy. Since 2013 he’s been at the pinnacle of the philanthropic world as president of the Ford Foundation, created by the family of automaker Henry Ford during the Great Depression to advance human welfare.
Fueling the Ener Transition
I MAY BE BIASED, but some of the most important research and data on the Bloomberg terminal lies in one of its lesser-known functions: {BNEF }
Dig Into Analysts' Estimates for Disruptive Companies
THE PANDEMIC ERA generated a whole wave of disruptive companies as it accelerated the introduction of new products and services in areas including artificial intelligence, digitization, electronic payments, online meeting platforms, and virtual currencies.
Climate Risks Come for Sovereign Credit
FOR YEARS climate scientists have warned about the ferocious wildfires and hurricanes that are now overwhelming many communities. Today alarms are ringing about a related financial danger: risks lurking within government bonds, the biggest part of the global debt market.
Responsible-Investing Pioneer Lydenberg Says ESG Needs An Upgrade
STEVE LYDENBERG’S passion for social change was inspired by anti-Vietnam War demonstrations, consumer boycotts, and the movement to divest from apartheid South Africa. But he didn’t take to the streets. Instead, Lydenberg turned to the world of finance to help catalyze societal change.
Engine No. 1's Grancio: ‘People Will Appreciate an Economic Argument'
ENGINE NO. 1 sent shock waves across corporate America in May when the fledgling investment firm won a boardroom battle with Exxon Mobil Corp., securing three seats on the oil and gas giant’s board after purchasing only about $40 million of its stock.
Find Out Which Companies May Ramp Up Payouts After Covid
AS THE PANDEMIC DISRUPTED business last year, many companies cut or suspended dividends. Which will boost their payouts when economies pick up again?
Get Into the Minds of Central Bankers as They Navigate Shocks
HAVE YOU EVER WONDERED how central bankers forecast the impact of shocks on the economy?