News

Guest Speaking, Dubai

Wednesday 13 April, 2011

Private Equity: Where do we go from here? A personal view from one of Cass's investment experts

Capital Club Dubai, the region's premier private business club and a member of the ENSHAA group of companies hosted Guy Fraser–Sampson, Private Equity and Investment Strategy Expert to give his personal view on ‘Private Equity; Where to we go from here?’, to the club’s members and guests on Wednesday 13^th April.

Fraser-Sampson, one of CASS Business School’s investment experts gave an eye-openingly frank account of the financial crisis, current economic environments and his views on the future of investments before opening the floor to audience questions and discussions.

Fraser–Sampson drew predominantly on the state of both the US and UK economies to highlight the severity of current debt; ‘The US dollar has lost 1/6 of the purchasing power it had eleven years ago, US gross public debt is close to 100%, and this is not including hidden debt. Last time this happened was during the Second World War’, he said. Similarly the UK has the biggest budget debt in history; the equivalent of £37,250 per person. 

Moving on to discuss assets, Fraser-Sampson explained that people may increasingly move over to real assets; gold, silver, commodities. ‘Wealth Management has changed. Right now the priority is not to grow your clients’ wealth, but to protect it’, he said. You must also draw a distinction between long and short term capital. Gold, for example, is a good long term bet but in the short term can be very volatile.

So what will we see along the way? Fraser-Sampson suggested very high rates of taxation and exchange control. ‘Restriction on the movement of capital is the logical step if currencies collapse’, he said, ‘and if things get desperate pension funds could be taken over by governments, as has already happened in Ireland.  You need to think about where you have custody of your assets. Many assets are being moved out of Europe for this reason, so things are subject to other countries’ jurisdiction’, he said, ‘individuals and institutions may look to move around the world to make sure they are always one step ahead of the next dollar to fall’.

‘We are living in an artificial world, and you can’t buck simple economics forever’.  When asked if he honestly thought that some of the disturbing solutions he suggested in terms of debt recovery would really happen, Fraser-Sampson said, ‘I am not saying any of this is going to happen, but the probability of it happening has increased dramatically. These are not hypothetical possibilities, they are real ones’.