How do you become a legend? You do uncommon things. Yes, a Canadian fund has a $5 billion war chest to help struggling retailers (there are many of them, and most are filing bankruptcy – J.Crew, Neiman Marcus, etc). You can call it UnGovernment Retail Bailout. Money men and women in Africa should study that playbook – there are many companies they can help, and in the process, they will build a superb asset base that appears in the radar once in decades.
Cash is going to remain king because even the U.S. government which showed signs that it could convert paycheck loans into grants has made it clear that all loans must be repaid. And with the available government loans prioritizing agriculture, retailers cannot thank Brookfield enough.
Canadian investment group Brookfield Asset Management, one of the largest operators of U.S. shopping malls, is launching a $5 billion rescue fund for retailers that need extra capital to weather the coronavirus pandemic. Thousands of stores have been shut since mid-March, with two major retailers — J.Crew and Neiman Marcus — filing for Chapter 11 bankruptcy protection this week. Brookfield said its retail revitalization program will focus on taking non controlling stakes in retailers. The capital will be sourced from Brookfield’s balance sheet and investment strategies.
Time for Africa’s Private Equity firms to rise – and save severely wounded companies.
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It becomes much more challenging in an environment where people commit funds with ‘guaranteed profit’ mindset, in case people are wondering why Nigeria hasn’t become America; this is largely at the heart of it.
How people invest and the things they predominantly invest in reveal a lot of things about priorities and mindset, and without a significant shift in that respect, some sectors with massive potential will never get a serious look in, because they are not ‘guaranteed’ to return anything on face value.
Both those who stole or looted state resources and those who suddenly saw a lot of money, the default is land or real estate, from city to rural areas, then outside the shores. If there’s still some change left, they then forget it in one foreign country, drawing from the interests to fund their larger-than-life spectacle.
How many moneymen here are even aware of struggling businesses who are willing to mark down their worth, just to survive? We are never wired for certain things, but we can always gleefully talk about Warren Buffett and co; at least as a form of academic exercise.