Letter From America

Pre-internet, those growing up in the post war era with access to the BBC World Service got their weekly diet of what was really going on in the USA from the majestic weekly 15 minute BBC radio shows by Alastair Cooke that, quite unbelievably, ran from 1946 to 2004. (For anyone interested, Penguin publish many of the 2,869 beautifully crafted broadcast scripts covering possibly the most eventful period to date in American politics, economics and social change).

Strangely these days given the amount of US commentary (verbiage) across all channels and outlets it has gotten much harder to find quality than it was 50 years ago! Quick tip here, if you don’t follow him already, do look up Simon Marks of Feature Story News (www.simonmarks.com) who we think is fast taking over the mantle from the esteemed Mr Cooke.

And if now is a somewhat barren environment of truly great op-ed in the social sciences, it’s even worse in the financial sector – a quantum leap of many deviations since the mid 1990’s of analysis, news, views, predictions, tips & opinions – many slanted to suit a commercial purpose making it difficult to separate wood from trees.

As we move through Q3 2023, the US is even more of a dichotomy than normal. Nasdaq powering to new highs whilst we continue to see large traditional & hedge fund outflows, a political democracy at inflection point & fast growing deep rooted street poverty just as Apple hits a $3trillion market cap! Some of the most seasoned fund managers and company founders located anywhere on earth but yet the market prefers to hire $140k under-graduate interns.    

And so, this is why your DXBP team believe in getting out on the road and seeing what’s really going on with all the senses fully attuned. North America represents our largest market, with literally 100’s of funds and founders wanting a seat at our Middle Eastern table. Far more than we could ever hope to research or be able to accommodate but a nice problem to have regardless!

In point of fact, we just returned from a trip to California, Arizona & Nevada and we thought you might like a few of our conclusions:

  1. Despite how hard it is to raise capital in the USA right now, the talent pool of gifted fund managers and founders is larger than ever, more humble than ever & better value than ever – there are some fantastic credentialed firms flying under the radar ready to think outside the US box and market themselves in new global territories
  2. US allocators now control so much money that emerging or smaller funds often don’t get a look in as their required early stage tickets are too small to be viable for large shops to enter a DD process
  3. Finding local sticky capital in the USA is much harder now
  4. Less liquid or algo driven strategies distributing in the US are a tough sell   
  5. Now that Treasuries offer a halfway decent interest rate the pressure on invested risk adjusted returns is considerable.
  6. Due to the vast distances & disparate locations, we felt it essential to have a local partner to guide us. In fact we loved our guide so much that we’re delighted to announce that we created a joint venture with the world class fund marketing team at Caplink just outside LA. Keep an eye out for the official announcement of this partnership in the weeks to come – we will soon be in a position to bring our non US clients into North America and vice versa Caplink’s funds into the UAE.

To summarise, we realise we must look beyond the degradation of fraying US infrastructure to the fund and founder gems we have the privilege of working with in Beaver Creek, Mammoth Lakes, Santa Barbara & San Franciso not to mention what we’re doing in Texas, New York & Miami! The common thread is that all are ready to lay down an authentic story to raise capital in the Middle East thereby preserving their roots whilst galvanising their financials for a generation to come.     

Unlike Mr Cooke, we can’t promise to still be writing these blogs in 2083 but we say with confidence that however ‘messy’ things get in the USA, amazing fund managers and company founders will abound. It will be our enduring pleasure to partner with them & help marry the best of the US with the capital powerhouse of the Middle East.