YWR: Who am I?
Let’s play a game. See if you can guess who I am.
Technically I’m a tourism company, but some might say I’m in the “wealth management business”. Yes, I like it when my customers have a lot of wealth, because then I carefully remove some of it from them in a delightful way. It’s OK. They like it when I do this to them and they come back for more. Weird but true.
So you think I would be pleased to see the average household wealth in the US now exceeds $1 million. American households with their high asset exposure to real estate and stocks benefit enormously from the Zimbabwe effect (rising asset prices). Americans have never been wealthier.
I’m happy for the US households, I am. Really. I mean I wish them the best, but I’ve moved on. The US has been good to me since my company was founded, but I see a bigger opportunity elsewhere and a better trend.
I’m a pioneer. I get it from my founder. I always like to do the new, new.
So I did something crazy. I sold my entire US business 2 years ago.
Yup. Sold the whole thing.
I’m a US company, but I’m getting out of the US entirely.
Sold the whole thing for $6.3 billion to a private equity fund with too much cash and complaining they needed to deploy it or their investors would complain. So I gave them something to buy. And it fit my strategy too.
The fund was named after some Greek god or something. Hermes… No that wasn’t it. Apollo! Yes, I sold it to Apollo in 2022. Gave them the keys to the whole thing.
It’s kind of weird though.
I might have to change my name.
I’m named after a famous US city where I started, but now I don’t even have a business there.
There’s a nice hint.
But changing my name is something to deal with later. Maybe I’ll keep it. Who knows.
Right now I’m busy spending the $6.3 billion. Some of the money I’ll use to deleverage (COVID was tough on me), but mostly I am going to invest it into my business in Asia.
That’s right. Don’t tell Warren, but I’m selling out of the US and betting it all on Asia.
I told you I am in the ‘wealth management business’ and when I look at the future, when I do the analysis, I see the wealth growing much more quickly in Asia than in the US. The whole region could be amazing. Vietnam, India, Singapore, China, the Philippines, they all grow faster than the US.
And you have two +billion countries where wealth could double by 2030. Isn’t that massive? I think as a business you are supposed to make sure you are exposed to that.
For example, look at China. The number of adults with a net worth of $500k could triple by 2030 from 50 million to 150 million. For my business that is massive.
If my analysis is correct wealth in Asia is going to soon surpass the US and keep growing. China’s wealth today is where the US was in 2005, but I forecast that by 2027 it should catch up completely.
But it’s not just the wealth trends. It’s the business position too.
In Asia I am something special. In the US I am good, but I have a lot of competitors.
In Asia I dominate. It is physically impossible to recreate what I have built in Asia. I have 60% market share in Singapore and 40% market share in China. A consultant would say there are considerable moats to my business.
And then the vision. The vision of my founder.
I own the two cities for my business and am surrounded on all sides by 3 billion consumers with the fastest growing incomes in the world. And I don’t have to go find these consumers. They come to me.
And even better, I have the place to myself. My peers and the private equity firms can fight over the US, while I own Asia. It’s a blue ocean.
I have built a multi-decade cash machine and my recent results have been great, but the market doesn’t seem to be paying attention. Or maybe it is so focused on AI, or because they are negative on Asia (probably that). Who knows.
I am playing the long game. And if you are paying attention to what I am building it’s an opportunity.
So who am I?
And what am I building?