The Best Emerging Market Investment?
I have to admit, I was a little surprised. The invitation to a book signing came from an emerging markets investment firm by one of their investment professionals and on the face of it didn’t really excite me. But I do have a lot of respect for the individuals at the firm and there was a quality to the invitation, one that didn’t say hard sell, that compelled me to go and see.
Nice new offices, tastefully decorated with soft earth tones, wonderful old world maps and a style that gives the impression this firm is filled with thinkers, talkers, and doers.
The African music greeted guests stepping off the elevator and right away this wasn’t typical, even for emerging market investors.
The second element that said this was going to be a different gathering were the kids running around, laughing and smiling, and of course there was some crying too, as they ran through the sea of adult legs.
But in the midst of this book signing and a reading from “I Will Always Write Back, How One Letter Changed Two Lives” I think I may have, arguably, stumbled across one of the best emerging market investments ever made… and it didn’t happen on Wall Street. But I’m not going to spoil the story for you.
This wasn’t about balance sheet profits and losses. It wasn’t about senior debt financing with a complicated call option and covenants that called into question just what rights were held by creditors.
Instead it was about two people, who now stood in the middle of an elegant and understated conference room with windows looking up at the Empire State Building. They were two people from opposite ends of the earth, literally, figuratively, politically, and financially. One a tall, attractive white American woman with flowing blonde hair and a relaxed manner. The other a shorter, dapper African man with friendly eyes, big smile, and a humble self-confidence.
What they share is common decency, love and respect for each other.
Caitlin Alifirenka is now an emergency room nurse from Pennsylvania, married to a Belarusian. When this story begins she is just a bubbly middle school kid from Hatfield, PA interested in boys and shopping.
Martin Ganda is an associate at Greylock Capital Management, the New York-based emerging market investment firm, where he is responsible for finding opportunities to invest in Africa.
At the start of his side of the story, he’s just a smart as a whip dirt poor kid from Mutare, Zimbabwe, keen to take advantage of every opportunity to get an education. There wasn’t much else to tempt him in Mutare, an eastern city hard up against the border with Mozambique.
Hatfield and Mutare are 7,983 miles away from each other. When the story begins in September 1997, these two kids were pulled together through fate to become pen-pals, the old fashioned way with pen, paper, and stamps.
“She is like my sister and I am like her brother,” said Ganda, who spoke with me about his relationship and some of the hopes he has for Zimbabwe now that he is in America, working in finance, a universe away from where he grew up and where most of his family still live.
Caitlin and her family quite literally saved Martin and his family from abject poverty and hunger. And he brought to them the realities of life outside the world’s biggest economy where the people still tend to look inward rather than outward.
“He changed my life, opened me up to the perspective of what goes on beyond my world in Hatfield,” Caitlin said off to the side of the book party.
Ganda’s journey to Wall Street is worth reading about, especially for young people. The story is told fluidly by the writer Liz Welch, who benefited from the meticulous record keeping of Caitlin’s mother Anne Neville. It will, much like Caitlin was awakened by her experience, get kids thinking about life beyond their immediate sphere of friends and family. It may even put to better use those smart phones they find glued to their hands.
Without giving away too much, Ganda has started a not-for-profit charity, Seeds of Africa, that is meant to send money to schools in Zimbabwe.
“I want to pay it forward, like what Caitlin did for me,” he said.
“Paying school fees of $20 a year can make all the difference to start. This is a very cheap investment,” Ganda said.
“Coming here inspires me, that you can build big things, like the Rockefellers or Vanderbilts. Something that will continue to provide service for the community years after we are gone. Human capital, I think that is the best impact you can have. The best gift you can give anyone, by empowering them to build industries and culture,” said Ganda.
At 32 he’s sticking with New York for now, making his way in finance and trying to do right by his family by helping support them back in Mutare.
Less than a year ago Ganda joined Greylock, having worked at Deutsche Bank and Goldman Sachs after completing his MBA at Duke.
“I wanted to work in finance and also in Africa and this was really ideal, that I would get an opportunity to deploy capital. Most firms are not as engaged in real emerging markets. This firm, you get an opportunity to get on the ground and evaluate opportunities and see the impact,” he said, describing what drew him to Greylock.
He has plans to bring some of his siblings to New York because “just coming to America is like a winning lottery ticket.”
What surprises him still about America, a place he has called home since 2003?
“The pet culture here is very fascinating for me. They have dogs wearing clothes, treated like people. Stores for pets, shopping, take a dog to a spa!” he laughs before becoming a little more serious: “The main thing that still surprises me is that the standard of life is so good or that if you want a job, it is available. People back home are so hungry for opportunity,” Ganda said.
They are also just simply hungry.
Zimbabwe, once known as Africa’s breadbasket, is suffering from hyperinflation. In southwest Zimbabwe, the worst regional drought in nearly a decade and the failure of nearby crops have left people hungry and on the edge of existence.
The drought is likely to damage harvests across southern Africa – from southern Angola to Botswana, Lesotho, Malawi, Mozambique and Namibia, the World Food Programme (WFP) says.
The impact is looking particularly serious for Zimbabwe, where the economy has been struggling for five years to recover from a catastrophic recession that was marked by billion percent hyperinflation and widespread food shortages, my Reuters colleague MacDonald Dzirutwe writes.
International donors have been distributing food in Zimbabwe since 2004 despite broad economic sanctions imposed by the West after the seizure of thousands of white-owned farms from 2000 and a violent election in 2002.
The government, for the first time in a decade, asked for financial support from the West earlier this month. Zimbabwean government officials met with Western ambassadors and representatives from the International Monetary fund, World Bank and African Development Bank to discuss budgetary support.
Western nations, who accuse President Robert Mugabe’s government of election rigging and human rights abuses, have restricted funding to charities since 2002.
The IMF in April said Zimbabwe has made progress in implementing their macroeconomic and structural reform programs, despite economic and financial difficulties. But they also say the economic prospects remain “difficult.”