How We View The Next Decade of Global Growth

[Music] everyone thank you for coming I'm thrilled to be moderating this panel on where the growth is in the next 10 years with two uh Titans of the asset management industry um first I just want to frame who we have up here um hendrik runs 91 which is a$ 150 billion asset manager and Samir runs U Mina and Africa for General Atlantic which is a77 billion growth Equity Firm so you have two Titans of asset management here on the stage let's just start with the opening obvious question with which is where is the growth in the next 10 years what are you excited about I'm going to start with you Samir you are involved in a firm that's famous for scaling entrepreneurs all over the world but you're in charge of this region what excites you about the next 10 years what can we expect well if I'm in charge of of this region is for a reason which is General Atlantic believes that the future is bright and more specifically the GCC countries and there will be plenty of opportunities and I think that future is bright in this region shortterm and and long term you know you have in this region the right Vision coming from the leadership across the countries you have uh in this region the right policies you have in this region the right demographic where we know that uh young people represents more than 50% of the population you have in this region a real uh Rush on education uh and you have in this region a great Capital Market which is building up whether is it here in Abu Dhabi or uh in Dubai or in uh or in uh Saudi Arabia so you have all the ingredient in this region you know to see a real bright future you have as well you know a lot of investment in non oil uh economies and when you think about the non oil the non-oil uh GDP represents now almost 65 to 70% of the GCC countries and we have seen it moving really by 50% for the last 10 years and by 20% since uh starting of covid so a lot of investment as as well is coming into uh the non- oil sector and lastly there is more and more population coming into this region or living into this region through demography and through uh uh people coming and who who says more population says more consumptions so even the consumption space is very well uh positioned in this region now I will end up by saying digitalization in this region in on its high and when I look from General Atlantic perspective I mean we we are a shareholder of bite dance and we see that the Middle East is and more specifically the GCC of the higher users of uh uh digital so digitalization is at its high consumption is at its high and you know the function of enabling actually consumers to get access to goods and to get access to services are already there so I put all this wrapped and they say that you know however you look at it put aside the geopolitical events however you looked at it the future seems bright in this region hence the attraction of General Atlantic to come and invest in this region great and you've put about 500 million into this region since 2015 is that correct so we have invested in network International everyone knows Network International here and now we are an investor in property f finders with in the UAE actually this is the platform to find uh a place to live or or to rent a place and uh we are about to do some three or four more Investments uh currently what we are doing as well is that we are asking a license to adgm hopefully we will get it done quickly and then we will have physical presence in this region and we are asking a license as well to the CMA in Saudi Arabia and very interest Ed to as well establish an office in Saudi Arabia great I'm going to move off to hendrik hendrik um you run a global asset management firm about 150 billion so you're all over the world what excites you what regions excite you I mean as Samir has just told the story about this region it's one of the most exciting places in the world right now for the reason Sam mentioned but I want to go back to alen Howard's conversation we are going to a world next 10 years which is going to be driven by two very big themes one is sustainability yeah that the the change of the way we live and the other one is the te technology which is which is not slowing down it's just going faster and you'll talk about AI later if you put those things together the ability of the emerging world to catch up to use its consumption muscle its use to be part of that is extremely uh uh uh exciting in spite of the complexities because we are in a very complex world and therefore things won't go in a straight line don't be scared of volatility go for it because we have more opportunity now than ever in my career in terms of a a a rapidly changing world and a a rebuild of global infrastructure which for us is really interesting to invest in so we're going to talk about Emerging Markets as an investment category in a minute but let me just go back to you Samir for a minute GA really works with entrepreneurs to scale their businesses all over the world wherever they are what does entrepreneurship look like in this region I mean you know sort of Entrepreneurship is more I know associated with places like Silicon Valley how is entrepreneurship doing here in this region first of all entrepreneurship is not anymore a local concept and it's not anymore silicon Valley or or or New York it's a global concept and you have it in Manila you have it in Jakarta you have it in abudabi you have it in Riyad you you have it in Cairo so the concept is becoming really a global concept with a a local footprint now in this region what is amazing is that we have seen uh an acceleration throughout covid with all the digitalization that has been needed and the entrepreneurship in this region is more at the startup Adventure level okay and we have seen so many of them and so successful ones but I would say that and this is where the ga is coming and being interested as we have done in the past in other places in the world in in China as we've uh done it in the uh in in India Etc here we feel that some of these companies can become seriously Regional or even global what they need is to be scaled up and to scale up they would not be able to do it by their own and they would not be able to do it without really a knowhow and support and this is where you know we have spotted in sectors like in consumers like in fintech now in htec some companies that can really scale up and become Regional or Global and I want to add that our approach General Atlantic has never been to come and buy a company yes we always come and support the founders or the entrepreneurs of this company we take a minority stake we sit with them at the at the board and we help them uh scaling up and if you look the example of property finder it's exactly what we did we came 2018 took 40% of the company worked with the founder and made this company a great company today and hendrik you know a little bit about scaling up a firm in an Emerging Market um HRI started 91 in South Africa and has grow grown it into a mega Global Powerhouse so this must be an exciting conversation for you so Riff on that and then I'll ask you about Emerging Market yeah I just think we're going into a slightly different stage of Entrepreneurship when I started I was probably not smart enough to realize what was happening in the internet so I just went into investment management but we are going to that same kind of phase where you have to build real businesses because with with the developments in Tech it's and with interest rates where they are it's not going to be a world where I can quickly build a concept and sell it yes and you would have seen the returns in markets now if you don't produce cash you don't produce profits in an in an interest uh a real interest rate world you don't get valued so this is the time where the real world entrepreneurs many of whom live in Emerging Markets can get access to Capital through places like Abu Dhabi Dubai Etc New York London wherever but here and and build those businesses which use technology but actually operate in a cash positive way the kind of business you've built Jen so they are back in fashion thank you for that um so Emerging Markets I think the IMF said we can EXP expect Emerging Markets to grow by 4% and mature markets to grow by about 1.4% so Emerging Markets seems to be an exciting place to put your money but obviously with some risk appetite um hendrik tell us about that you're an Emerging Market specialist among other things what would you say to an audience of investors I I I think the concept of Emerging Market is almost outdated we live in a multi-polar world now which is which is much more Nu but just look at the size that is the part of the world as the economic center of gravity shifts to East from here uh that's where by vast the far vast majority of people in the world live it's already half the GDP of the world and if you look at uh you know market capitalization and and and and growth in that you talk about 20 trillion of of of financial assets uh Equity assets you talk about 30 trillion of of fixed income Assets in that world out of a total Universe of probably 70 120 trillion maybe a bit more 150 trillion so this is big it's too big to ignore and it happens to be demographically the future so why not look for the Diamonds in the Rough that sounds good again we can't talk about the next 10 years without talking about energy transition cop is next week um you're both thought leaders in this space Samir give us some of your thoughts on investing in the enery transition or maybe you want to go back one second on on Emerging Market which for me the the future is bright for emerging markets and there is no doubt that we are migrating and all the elements ingredients are there for the whole asset uh managers and the whole wealth of the world cannot ignore it but short term you know there is a a some constraint on on emerging market and we have to be very careful first of all the combination grow uh inflation is in a difficult spot secondly the high interest rates you know represent a real issue for emerging markets more than for the U developed markets uh thirdly the high tax rate and there is many many countries connected to the dollar they have some difficulties uh swallowing it and the fact that liquidity in is retracting across the globe so all these factors would be would would would would make me feel that we'll have to be careful and Emerging Market short term is not anymore the beta play where we say we go emerging market and we will make money but actually Emerging Market is back to fundamentals now and Back to Basics and we will have to as uh Hedrick said focus on the countries that they can make it shortterm and more importantly it's back to be a bottom up play so it's really back to be an alpha play where you know you'll need professional to go and pick up the right opportunities is it in public markets or in private markets to take advantage of it there will be plenty of entrepreneurs continue to flourish in Emerging Markets it will not stop it's as I said this is this is the future actually and they will not be discouraged by the challenges of the day but what is important is that how do we pick them up how do we find them and how we make sure that we're not going randomly and distributing Capital with no u with no real selection process hence the need actually now more than ever to count on professionals like all of us like you you like me like like General Atlantic like like 92 you know to go and find the right opportunities so quickly I want you to be able to tell the audience in the next 10 years what do you think is the most important thing to be paying attention to because we've got about 47 seconds Believe It or Not hendrik unfair question no I think I think it's this existential challenge which which binds us all together as Humanity if we if we don't arrest the climate disaster awaiting us life will be very unpleasant on this Earth and I find it incredibly frustrating that we are talking about things like green washing and green hushing we should be doing what actually Dr Sultan is encouraging us to do is mobilize money to finance the biggest single transition the world has ever seen and do it much faster than the Industrial Revolution or any any other Revolution before us and if we don't do that we've got a problem so I think that's what we should be focusing on Samir I will continue by saying you know the poor conversation in whole energy transition and climate is adaptation and resiliation we keep thinking that you know we need to decarbonize and we need to do many many many things which is right but people are dying now and that makes me extremely sensitive to the idea that we're not paying enough attention and we're not investing enough money now in our infrastructures specifically in Emerging Markets you know to protect populations and to avoid deaths of people now great I had about a hundred more questions but we've run out of time so thank you both for your thoughts and thank you all for coming thank you very much