The familiar gust of hot air hitting my face as I stepped out at Jinnah International Airport in Karachi, Pakistan. The late night arrival was always my favorite, the night lights illuminating what I chased – opportunity.
It was a brave decision, when everyone was leaving Pakistan to shift abroad – It seemed like one way traffic – outbound. I embarked on the 30 hour journey from Vancouver, British Columbia to my land of opportunity. I couldn’t contain my excitement, pondering over possible ventures such as Go Karting Circuits to supplying Copper to Industries with engaged strangers at Attaturk Airport in Istanbul to networking with potential investors on the flight home – I was thrilled
Over the next few years, we built a profitable VC backed 8 figure E-commerce Marketplace in the Beauty & Lifestyle segment. With a race against time to turn profitable, we restructured the business to profitability capturing a key segment in Pakistan.
The business environment was unique in Pakistan. The sheer amount of supersized opportunities in Pakistan was exposed during 2020/21 where we saw numerous companies raise staggering amounts to cater to Pakistan’s 245m population. The eco system as a whole saw many shoot for the stars, some attained incredible heights.
As a founder, I saw the world shift. Both when the capital came in – it helped many businesses leverage their potential. Again when we saw that funding drop to bottom out, the survivors were the ones who pivoted their models to profitability in time. The opportunity that Venture Capital funds wanted to tap in Pakistan was the World’s 5th largest population.
My curious nature embellished me to ask the question – If Venture Capital sees the value in Pakistan, why not Asset Managers and Private Equity Funds? Where else can you acquire profitable collateralized Industrial manufacturing concerns for a million dollars?
They just need enough return to offset the risk. What are the risks? Currency stability? Hedge a portion of the investment into utilized Real Estate and Machinery – the Asset escalation will act as a hedge against devaluation. What about Economic Uncertainty? Focus on Recession and AI Resistant Sectors – Help Manufacturers with long term agreements with big players leverage their underutilized capacity.
But the biggest challenge? Management? Especially in Emerging Markets like Pakistan – the key to driving efficiency is strong management. So instead of a leveraged buyout, we partner with the businesses that have the management and technical capacity but lack the working capital. We leverage our network to drive efficiencies. Imagine optimizing a Manufacturing Concern – with an idle capacity of 3x of their utilization.
However, this is not enough. To further incentivize, these established entities would be owned wholly by our Investors. We would apply the Private Equity playbook to provide the returns the funds seek, with a payback linked with profits generated. We blend this with the Asset Management playbook with the Investor holding the Assets effectively collateralizing the investment providing a return through Asset Escalation plus gain on the Terminal value at Exit.
A dear friend on Wall Street told me, ‘Investors love the Return of Emerging Markets, they just don’t want to be there physically’ This is true for markets like Pakistan – it is imperative that the Management team is focused on the ground, this is required in complex market opportunities like Pakistan to ensure realization of efficiencies and securitization of the investment.
Frontier Strategic Equity offers a transparent management fee structure based on profit sharing and target-based payout structure on the Terminal value aligning Investor and Management Interests.
These key differentiations with our hands on investment thesis governing our strategic fund allows traditional Private Equity & Asset Management investors to securely attain strong returns expecting Emerging Markets – venturing in the opportunity of being on the forefront of capitalizing the Industrial sector of the World’s 5th largest population
Today – Our Fund has USD $100m in Assets Under Management with over $35m raised and deployed. Our diversified interests are in the Pharmaceutical Manufacturing, PVC Manufacturing, Health, Beauty & Lifestyle, Food & Beverages sectors.
Our additional areas of Focus include Recession proof and AI proof Industries – primarily in the Healthcare, HVAC, Oil & Gas, Energy, Minerals, Renewable and Alternate Energy Sectors.
