The Nairobi Solution: Ch.2
Liverpool Street, London
This wasn’t the fancy office building he had been imagining. Erik stood in front of a narrow 5 story building. This was the address David had given him though. Despite its outside appearance somewhere in this building was a successful hedge fund. He scanned the list of tenants in the empty lobby and found Belway Capital on the 3rd floor.
The elevator doors opened directly to a small reception area, but with no receptionist. Instead, posted on the wall was a sign with “Trading desk this way” written in pen, which pointed down the hallway. This must be their version of a receptionist.
Erik followed the sign down the hallway to an open plan room full of trading terminals. There were 8 traders sitting on both sides of a long desk. Each trader faced a wall of 6 computer monitors blinking with stock prices and charts from markets around the world. Some screens had news alerts scrolling down. The phones blinked but didn’t ring. One of the traders with his back to the entrance heard Erik enter the room and turned around.
“Hello. Can I help you?”
“Yes, I’m here to see either Dwight or David. My name is Erik Anders.”
“Dwight, Erik Anders here for you.” the trader yelled over the screens to a pair of legs hidden under desk on the other side.
Dwight jumped up and came around the bank of terminals, hand outstretched, smile beaming. “Hey. How you doing? I’m Dwight” he introduced himself. Erik immediately picked up that Dwight was another American in London, like himself. Dwight was wearing a short-sleeved golf shirt and obviously took his fitness seriously. He was muscular with strong arms.
“Hi Dwight. Nice to meet you. David said to come by and see you. I used to work at Kratos Capital. David and I have been sharing European bank stock ideas together.”
“Yes! David said you were coming by. He’s right over there.” Dwight pointed down the line of terminals to where David waved while still speaking on the phone. “Let’s grab a room.”
Dwight led them to a small conference room with a glass door just off the main trading floor.
When they were seated Dwight started off by saying “Hey! Thanks for coming by. David said you guys have been chatting financial sector ideas and that you’re pretty good. But he said Kratos is shutting down and you are looking for a new seat.”
“Yes, Kratos is shutting down. Performance was OK, no massive losses, just lots of 5-7% years. The LP’s got bored and redeemed. The head PM would never take enough risk and so we never had big years. I ran a financials book for them.”
“Your CV says you worked for under a year at Hedland Capital. I know Hilton. Why did you leave Hedland?”
“It’s a great firm, it just wasn’t a fit for me. As you know, Hilton is super process orientated. He has a whole trading system where the analyst is really just a cog in the wheel. I wanted something where I could be more creative and come up with my own ideas. I think we both knew it wasn’t a good fit. Then the opportunity came up at Kratos, so I left.”
“Yes, I understand. So, David probably told you our set-up. We invest in a mix of public and private companies. We run around $500 million. Most of it is my money. For the public investments everyone runs their own book and gets a 20% payout. You can have a salary if you want, but it’s a draw and gets deducted from your bonus at the end of the year. I run the private investment book, but we work on the ideas together.”
“That’s basically how David explained it. And do you think there might be a role for me? David said you might be looking for someone.”
“Yes. I’m looking for someone. But not for financials specifically. We have David and he’s got that sector covered. I’m looking for something different. We’re starting to do a lot of investing in Africa. I want someone to run an Africa public book plus help me with our Africa related private investments. I know you’ve never done Africa before, but David says you are smart, so you can probably figure it out.”
“So, run a book investing in African listed stocks? Plus work with you on private deals? Hmm… it’s a bit different from what I was expecting… but it does sound interesting. May I ask why you are looking at Africa?”
“How many people in London do you know investing in Africa?”
“None. You’re the first person, which is why it’s interesting. Nobody invests in Africa.”
“Exactly! Think about it. 1.3 billion people growing GDP at 5%, just 3 hours south of here. We are in the financial capital of the world, and you don’t know a single person investing in Africa. To our trading peers it doesn’t exist. Nobody is looking at it. Isn’t that strange? But you know what that means? It means inefficiency. And inefficiency is where you make money. So I’m focused on Africa and want to build up our investments there. I need a person to help me and I was thinking someone like you might be a good fit.”
This Dwight guy was pretty cool.
“Hmm… When you put it like that Africa does sound interesting,” Erik mused. “Can I give it a bit of thought? I’ve been looking for new roles and have a few other discussions underway. This does sound potentially good though.”
“Yes. Think it over. Speak with your wife. And feel free to come by again if you want to discuss it further. It’s important to make sure you know what you’re getting in to. You’ll find Belway is a great firm with a good bunch of guys. No politics. We just focus on making money. Ask David. I think he’ll tell you he did really well last year.”
Erik thanked Dwight for the meeting and headed home on the tube to Kensington. His head swirling with images of what it would be like to invest in Africa. This was not what he had been expecting. The job would surely involve lots of interesting trips to Nigeria, South Africa, Egypt and Kenya. It could be fun. Erik loved travelling and adventure. And this Dwight guy seemed pretty adventurous too. Especially if he was running $500mn of his own money and investing it in Africa.
His train arrived at Earl’s Court tube station and Erik walked up the final steps out on to the street, where he was surprised to see Nicole standing there waiting for him.
“Sooo….. how did it go?” she asked. “How was your meeting with Belway?”
“Hey there! Great to see you! How was the Belway meeting? Well, not what I expected, but super interesting though. Let’s sit down somewhere and get a pint. I want to tell you about it. We have to think about this.”
A few minutes later they were seated at a small table outside a local pub. It was early in the afternoon but they both had pints in front of them. Nicole was more fun than Erik. She was always up for celebration, adventure and a good time. It was why he’d married her.
“The firm is run by a guy named Dwight. He wants me to run an Africa book. He’s got David doing the financials already. He wants me to run a book investing in African public equities plus help him with African private investments. He pays 20% on performance. Pure performance with no discretionary thumb suck BS. That part is good.
But it’s the investing in Africa part I’m not sure about. On the one hand I’ve been looking for a job for 6 months and have no leads. None of the recruiters like my CV and I haven’t been able to get even one interview. You know how it’s been. On the other hand, Africa is super niche, and a total U-turn from what I’ve done before.
But maybe I’m supposed to take it. I worry if I say ‘no’ I’m like that guy standing on the roof of his house in the middle of a flood who never gets in the boat. What do you think?”
“I don’t know. It’s different, but it doesn’t sound so bad. It sounds kind of fun. You like travelling and would get to go to Africa. And it’s a job with a 20% payout based on performance. You could end up making a lot of money, “ Nicole reasoned.
“Then, I should probably take it. It’s just that it’s going to be do or die. There are already too many stops on my CV. I’ve taken too many jobs where it didn’t work out, and I have nothing to show for it. If I go off and invest in Africa, then come back 6 months later and try to be a finance analyst again it will be a disaster. The head hunters won’t touch me. And you know how our finances are. I can’t be unemployed again. If I go off on this tangent and invest in Africa it HAS to work.”
“Then make it work!” she replied .