Dear Editor,
The big leagues are forming a line and coming to primetime (“Major fund managers eyeing oil $$” -SN, June 11, 2023). The former includes Bank of America and Black Rock, with a couple of second-tier companions completing the posse. Guyana is primetime, except that its investment moment has another five years before it engage the attention of the heavy hitters. First things first. A small bucket of cold water is dashed on that SN caption, and the post quoted from one B. Jagdeo’s Facebook page. With the exception of Black Rock and maybe BoA making the cut, the others are middle level fish; “major” is a major overstatement. According to the SN article, Guyana had free cash of US$257 million in January for investment purposes, and they had better be the safest thing anywhere.
There are two hiccups right away that it is my painful duty to identify publicly. First, US$257 million is small change for the top-of-the-line hitters, and safe investments ain’t the name of the game for money managers who make their money with outstanding performance. Just doesn’t cut it. Both small amount and investment options limitation fall into the categories of ‘thinking about it’ and ‘getting back later’, as in 2028. It is to keep options open, keep the conversation going, and keeping from not insulting anyone in Guyana, which could be a source of rich investment manager earnings. Bottom line: the Black Rocks of the world need multiples of that quarter billion to snare their interest; also, fund returns, and fund manager earnings, are not propelled upwards by having to stick to safe investment bets. Low return bets they are, and managers have to justify their 20-25% fund fees. Treasuries out. For whatever it is worth, and this is also lamentable, the Black Rock people would not have been overly impressed with honorary doctorates; and harbour only concealed contempt for graduates of Patrice Lumumba U, Russia; small-timers, they are.
Still, the Guyanese political leader Jagdeo was ecstatic in his praise: “We met with an impressive investment group. They probably have maybe US$1 trillion in management.” I have news for Bharrat, Black Rock alone is in the neighborhood of almost nine times that majestic amount he mentioned. The Vice President must do his homework, speak with some level of accuracy, and discontinue his practice of saying something to fill space, only to have egg on his face In other words, he would do better knowing what he is talking about, it would give him such much-needed standing with the foreign folks. They have studied him intensively; he has to return the favour. Now, I go further today in extending my usual guidance to Guyana’s Vice President: stop wasting time clobbering the PNC to distract citizens. There are no returns to speak of from such predispositions and engagements. It is in this new arena where he must concentrate, earn his stripes, and stop all the usual politicking.
Brother B, Guyana is on the international stage, so cease and desist with this antiquated provincial way of leading, governing, and prioritizing. If and when these people (Yanks) realize that they are dealing with a second-string varsity team, they will do one of two things. Make rings around Guyana, and do what rewards only themselves. Or, they will wave away the opportunity to make some money in promising Guyana. Too many rank amateurs. Too much handholding. Too much trouble. On another note, the army man and the businessman and whatever kind of man are around that Oil Fund need to stop being placid placeholders, clear the cobwebs, and start taking lessons on what it takes for this country to hold its own with the big swinging slicksters that come to this exciting metropolis. All those fine natives who speak or write about the theories they got from textbooks will quickly learn that they are in hostile territory (behind the suave smiles and Savile Row suits), and must be on guard that they don’t get their heads handed to them. These guys are sharks, and they recognize fresh meat. This is the real world which Guyana must understand.
In five years, it is likely that we will have some cash that could cause a splash. That is, a billion American, if OPEC plus doesn’t overplay its hand, and contribute to slowing national economies, and demand destruction. Anybody cares for US$50 a barrel? Now, here is the whole story in a few words. Brother Jagdeo must burnish standing, develop necessary sophistications overnight, and stop being a finance hillbilly. Though said before, I table again: Wall Street barracudas will mesmerize and pulverize many that we have here, including the central bank, while eating our dinner. In the latter, they are not just major, they are without equal.
Sincerely,
GHK Lall
