Interview with Blackbridge Cross Border’s Alexander Jarvis
February 20, 2014
Alexander Jarvis is the chairman of Blackbridge Cross Borders (BCB), a position that has him leading and managing the Blackbridge team as well as associates in Europe, Central Asia, East Asia, Western Asia and Sub-Saharan Africa.
What is Blackbridge Cross Borders?
Blackbridge Cross Borders is a private, trans-global organization that focuses on structuring, advising, and facilitating arbitrages, foreign direct investment, and capital raising in companies and projects in Europe, Central Asia, East Asia, Western Asia, and Sub-Saharan Africa.
Why did you start Blackbridge Cross Borders?
It was established to take advantage of the global economic climate over the last turbulent five years, which provided abundant opportunities for an apolitical pragmatic organization like Blackbridge to gain market share.
Where are the clients you deal with and how do you help them add value?
Blackbridge has clients in the UK, Luxembourg, Switzerland, Russia, Qatar, Saudi Arabia, and China. I predominantly broker and facilitate outbound investments for Chinese investors globally. Strong cultural-linguistic understanding, patience, intelligence, and influential connections are what I bring to any deal table.
Please describe your experience doing business in China.
Mixed. Really it depends on who you invest your time with. Be aware that Chinese entrepreneurs were unleashed after many years of internal challenges, including the Great Leap Forward and the Cultural Revolution. Now, after 30 years of economic liberalization, they are taking no prisoners in their relentless quest for wealth, power, and prosperity. You have to adapt fast.
How have you found dealing with Chinese investors?
I’ve enjoyed investing time with Chinese HNWI and UHNWIs, and hearing about how some of them struggled with a military or farming background before eventually transforming themselves into a business titan. Some advice if you want to work with the new Chinese super-rich: More gets said over baijiu and dinner than in the board room.
What are the challenges of doing business in China?
There are many cultural and historical clashes. As a British citizen, I’m constantly being reminded of the conflict with the Empire in the 18th century. Language is another key issue as many English words and sayings don’t translate well and cause confusion (get a very good translator or learn Mandarin, and have a Chinese business partner present at all dealings). The 8-hour lag between GMT and CST is also an issue, as is air pollution.
Which markets do you think offer the greatest potential in 2014?
There are several key global geopolitical and financial stress points in 2014, Q1. My main focus at Blackbridge: Real estate in the underdeveloped, poorer areas of London, which offer a very attractive low-risk investment for Chinese investors. The biggest driver is the current strength of the Chinese yuan (RMB), which means the cost of buying property assets in London is still 8% cheaper than it was six years ago. Many Chinese banks and UHNWI’s have vast RMB holdings and are actively looking to fund large projects. The opportunity is clear as a bell for those who can facilitate large arbitrage transactions in RMB and bring Chinese investors to the table. I’m also working on several riskier ventures like Argentina airlines, and agribusiness and real estate projects in Ukraine.
Why is Blackbridge so focused on the Asian market?
There are now an estimated 330 dollar billionaires and 1,020,000 millionaires in China alone, and this number will expand rapidly as China continues to deliver a GDP growth rate of over 7.5%. 1/3 of China’s super-rich have emigrated from mainland China, and they are investing everywhere.
Given the recent problems facing Ukraine and Argentina, why is Blackbridge moving forward with projects in these countries when some other investors only see risk?
Most investors make decisions watching mainstream news and don’t have local contacts in the countries and companies they are investing in. There are many opportunities to profit from currency fluctuations and buying and holding distressed assets that are a tenth of the value they were say 1-3 years ago.
Could you offer some advice to dealmakers wishing to build global networks?
Dealmakers should be students of geo-economic and geopolitical history since it makes them question the status quo and connect the dots faster. I’d also recommend building smaller, specialist teams that are more adaptable in taking action (it’s all about the first move).
How do you see economic reform unfolding in China over 2014-2015, and how will this process impact the country’s short-term growth prospects?
China has big issues in its financial structure, but the country will evolve and adapt. Putting time/dates on the reform process is like throwing darts at the wall. I will highlight the fact that the Communist Party of China (CPC) has lifted 500 million people out of poverty in the past 35 years, a statistic that is not often acknowledged in the Western media. The Chinese population, 1/5 of humanity, has fully embraced capitalism in some of its rawest forms. So when you next hear that China will implode and is on an unsustainable path, remember that the Chinese people have gone through far worse hardships and have ultimately prevailed.
In your view, what are some of the greatest geopolitical challenges facing the world in 2014?
Three flashpoints: 1) A US and French intervention in Syria and the collateral damage this could cause globally. 2) Russia’s Putin becomes an interventionist in Ukraine and sends troops to disperse radical factions. 3) Tensions and mistakes in the East China Sea between China and Japan.