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Allocating funds to an investment opportunity usually means taking a closer look at valuation readings to better understand the premium or discount on a deal. Real estate, venture capital, and direct investments, among other asset classes, are subject to this scrutiny. Particularly in the case of illiquid investments, valuation is an art. Finalizing guidance on price commonly generates conflicting opinions between buyer and seller. One truism: a seller will often contend that a deal is worth more than it probably is.
Doing homework on prospective investments lacks everyday appeal. It is often tedious, sometimes costly, and usually time consuming, perhaps leading to unsavory conclusions. As a process, due diligence runs the gamut from clarifying government regulations to spotlighting money-laundering concerns. Investors short-circuit this essential function to their detriment. Many failed deals are hastily buried out of embarrassment. Yet more thorough research could have prevented an outsized loss or exposed outright fraud.
Economic diplomacy helps to safeguard the global marketplace. How will regulatory shifts in one nation effect trade activity? Will the strategy decisions of a sovereign wealth fund impact financial markets? Can sanctions by one country on another have a ricochet effect on an industry? The trend toward bilateral agreements, in tandem with diminished globalization, means that multilateral organizations may have less of an impact than they once did, but they remain potent in setting the pace of economic reform.
The investment-management industry breaks down the world’s economies conveniently into major and emerging markets. Those metrics may be less relevant on a real-economy basis, given the enormous wealth that is being generated from what was once called—pejoratively—the third world. As income grows in developing nations, fresh themes evolve for global investors. Technology adoption and health-care expenditure are just two examples. Primary industries are no longer the whole story.
If it were a stand-alone nation, the Sunshine State would rank in the top-20 worldwide by economic output. Yet it is still smaller than New York, Texas, or California. The economic complexion here differs markedly from the rest of the nation. Miami serves as a Caribbean entrepot, while North Florida and the Panhandle are part-and-parcel of the Deep South. One little known fact: Brazil is traditionally the state’s largest international trading partner due to the outsized tourism sector.
Whether in primary, secondary, or tertiary industries, companies are required to think and act strategically in cross-border markets. That reach is not just to pursue customers; it may also involve supply-chain development. Yet there are limits. One-off events—like the 2021 Suez Canal blockage—and extreme scenarios—such as the pandemic—emphasize unexpected hurdles. Risk-averse decisions by policymakers and corporate executives are now reshaping global trade in both manufacturing and services.
Florida is the anchor for a regional economy that rivals the size of Brazil. The islands are often overlooked as a commercial appendage, despite the fact that the shift from fossil fuels is promoting an impressive dialogue on economic diversification. While hospitality and tourism trends dominate business headlines, investors are naive to ignore requirements in other industries. The environmental, social, and corporate governance dialogue informs policy decisions here, as much as anywhere in the world.
The travel industry has been scorched by the pandemic, creating enormous opportunity as companies scramble to sustain themselves and recover profitability. The largest, often-public enterprises have the ability to rethink strategies. For smaller companies, the focus is at-hand tactics. A surge in travel as the public-health backdrop settles, suggests an unsustainable upswing in business. Theme parks, cruise lines, and luxury hotels, among other industry segments, share many of the same challenges.
Portfolio composition begins with a simple idea, such as allocating cash to a selection of venture deals to achieve a superior financial return. Distilling fundamentals to achieve that outcome, however, leads to heated discussion, if not outright argument. Economic data can be subject to wide interpretation, the impact of government policy moves may be unclear, and industries may no longer respond to the same commercial circumstances that they once did. Academic debate confronts reality.
Western perceptions of the Islam world can be peculiar, with views of the Middle East rooted in terrorist concerns and thoughts of Southeast Asia tied to palm oil or tourism. Developments in finance, let alone Islamic banking, seldom percolate to the surface, nor do considerations of technology innovation. The ummah is far less homogeneous than international news would suggest. Definitions of wealth extend beyond commodity-based income at the national level to the role of spiritual issues in everyday affairs.
Investors, whether individuals or institutions, are fickle. Their qualities can change unpredictably based on fast-moving market conditions. The only foundational trait is that most understand the need to put capital to work with urgency. Some prefer the exotic and extraordinary; others are more conservative, with an eye focused on the stable and secure. Decision processes often distill to overcoming objections or at least understanding those objections in context.
Young companies fall into two categories. Either they do not have enough cash-at-hand to achieve their near-term business objectives or their capital requirements are so large that they must resort to outside investors to move forward. Pitching funding sources successfully is an enormous task in a global marketplace infused with competition for capital. Startups commonly mimic others’ tactics and strategies to simplify a complex process.
Read the fine print. Cranganore operates worldwide. However, the company cannot offer all services in every jurisdiction or to all businesses. We may act in concert with locally-regulated entities in some cases.
Banner: Nutmeg is native to a small group of volcanic islands in Indonesia’s Maluku Province. Credit: Fabio_lamanna at Adobe Stock.
While the legacy of Portugal’s Prince Henry rises to mythical proportions, the truth is that his efforts at building Portugal into a seafaring nation helped to define much of world history. Yet surprisingly little has been written about the man. With his older sibling set to assume the throne, Henry opted to distinguish himself by sponsoring voyages, primarily to the west coast of Africa. Much 
