Yes, maybe the financial world will go to hell in a handcart, as our old friend Sven Lorenz said over dinner last night. But there are still a lot of ways to make a lot of money.
Sven travels the world regularly – looking for the curious, quirky opportunities that mainstream investors have missed. When he found, for example, a cache of rare St. Petersburg caribou leather, 200 years old, retrieved from the North Sea, he bought the whole thing. Then, he found old Asian safes, which he transformed into cigar humidors. He owns a hotel on one of the Channel Islands… apartments in Germany… and a cosmetic company in Russia. Sven also journeyed to the Falkland Islands to explore the potential of a vast new oil discovery there – and to the Heart of Darkness to look at mining and farming operations in Zimbabwe.
We put the question to him directly: Where do you think the world’s best investment opportunities are today?
“They are probably in Europe. Low capital costs and a desire for reform are coming together to produce some remarkable opportunities. Some of these companies are controlled by founders and their families for generations. People don’t know much about them…they are often wrapped in Swiss holding companies and Lichtenstein trusts. But they often own very good brands…and sometimes have property – even cash – that most investors don’t know about.
“These companies now are being challenged by shareholder activists. And they’re being drawn out by private equity firms, hedge funds and private investors. Some extraordinary bargains are emerging. We bought one bank – a great franchise – for little more than the cash in its vault. It is as if we had gotten the business for free. I think we’re going to see some more deals like this – even very big ones.
“And one of the nice things about this is that we’re talking about big, solid, old companies. When you buy a start-up…or an emerging market…you don’t know what you’re getting. As long as the market is flying, the paper will stay in the air. But as soon as there’s a setback, you’ll see some very unhappy investors.
“Solid European companies are another story. They’re often very conservative and very profitable. And now we’re getting them at a good price.”
Markets and Money