Understand The Nature of Assets Before Investing
Chief Investment Officer, Stanbic Investment Management Services (SIMS), George David Allotey, has emphasized the need to fully understand the nature of assets before investing. He made this statement at a Broll Ghana seminar on alternative real estate investments held at the Alisa Hotel, North Ridge, Accra.
Speaking at the event on the theme, “The keys to unlocking Ghana’s real estate investment opportunity”, Mr. Allotey explained why it is critical to fully understand the nature of one’s assets when investing.
He noted that, “Interest rates pose a significant systematic risk which can affect any type of investment portfolio. Typical rates are funded either through debt or equity. If you find that the debt side is heavily leveraged, it means that you will be sensitive to fluctuations in interest rates and may also experience losses in this scenario. If you also choose to be an equity holder you may still be exposed to movements in interest rates. Therefore, it is very important that you have a clear understanding of the nature of your investment and the extent to which it is influenced by interest rate fluctuations so that you make the right decision that suits your needs.”
George Allotey went further to explain SIMS’ diversification strategy as part of efforts to drive national growth, saying, “Our commitment lies in Africa, which we proudly consider our home, and our primary goal is to contribute to its growth. That is why we have been actively pursuing a diversification strategy, primarily through private equity investments.
“We strongly believe that it is crucial for us to hold a diverse range of assets. If you take a careful look around, you will notice that many of the prominent properties in our vicinities, are owned by foreign investment funds. Making the presence of local funds offering competitive and stable returns very important. Globally, pension funds have played a substantial role in driving economic growth, as observed in countries like South Africa. We firmly believe that such investments are a valuable asset class, especially when considering the interests of our trustees who manage pension assets.”, he added.
The annual Broll Ghana Real Estate Industry Network Seminar focuses on establishing a valuable network of industry professionals in the Real Estate to build business relationships, gain access to industry information, alternative investment opportunities, resources and new industry developments.