As the NCR property market witnesses a severe slowdown, we debate, what can make this region see a turnaround and can it once again become the investors darling.

<em><em>Post by: </em><strong><a href="https://www.thetrustedinsight.com/profile/GregSilberman/"><em>Greg Silberman</em></a></strong><em>, the Chief Investment Officer of </em><strong><em> </em><em><a href="https://www.thetrustedinsight.com/profile/firm/atlanta-capital-group/">Atlanta Capital Group</a></em></strong>. Atlanta Capital Group specializes in creating custom private market solutions for RIA/Family Office clients and is an active acquirer of independent wealth management practices.</em><br /> <br /> We needed a 4-wheel drive.<br /> We didn&rsquo;t have one.<br /> <strong>I visited Mozambique once</strong><br /> It was 1996.<br /> The 15 year BLOODY civil war has ended and the future looked bright for the resource rich, war torn country.<br /> <strong>Once called the Paris of East Africa </strong><br /> Louren&ccedil;o Marques or &ldquo;LM&rdquo; encapsulated the romantic idea of colonial life - torpid, sensual, a breeding ground for white mischief.<br /> It was a college road-trip.<br /> My girlfriend and I and two other couples set off driving south-east from Johannesburg to KwaZulu Natal - Zululand! <div>&nbsp; <div>We spent the night with friends on an Almond plantation.<br /> We woke up early the next morning and took turns riding on our friend&rsquo;s micro light.<br /> We flew over the blue Indian Ocean.<br /> I never saw it but my friend said they often fly over Whale Sharks swimming close to the surface.<br /> We pushed NORTH towards the border<br /> The tar road gave way to gravel and then to sand<br /> We needed a 4-wheel drive.<br /> We didn&rsquo;t have one<br /> But we were young, idealistic and stupid so we pushed on.<br /> We only went as far as Ponto do Oura (Point of Gold) a few kilometers inside Mozambique.<br /> Back in the day Ponto do Oura was a beach resort for the wealthy to escape LM (now called Maputo) for a few days retreat.<br /> Miles and miles of untouched, deserted Golden Beeches.<br /> The fishing was amazing!<br /> And the food was outrageous!<br /> <em>Side note: For a sample of spicy Portuguese/Mozambique fare in the DC area check out </em><a href="http://www.nandosperiperi.com/restaurants"><em>Nandos</em></a>.<br /> It was a great trip!<br /> The only reminiscence of war was the numerous DO NOT WALK signs as landmines were still a big problem and the numerous local people missing limbs (again landmines).<br /> We drove home the same way &ndash; going around the Swazi Kingdom leaving that expedition for another time.<br /> <strong>Figure 1 - Map of S.Africa - Johannesburg, Kwa-Zulu Natal, Mozambique and Swaziland</strong><br /> <br /> <br /> <strong>Great Tale Greg but why is it relevant?</strong><br /> Recent events have caused me to recall these memories.<br /> <strong>Firstly:</strong> I&rsquo;ve been conducting a personal, fact-finding mission on the Sub-Saharan (ex-South Africa) Private Real Estate space. Some elements I would like to see are: <ul> <li>Large Institutional sponsor;</li> <li>Focus on A-grade retail, office and industrial real estate;</li> <li><strong>Anomaly: </strong>capturing the acute shortage of regional-size shopping malls in sub-Saharan Africa (1 mall : 10M people vs 1:100k in South Africa);</li> <li><strong>Positive Fundamentals</strong>: growing consumerism and rapid expansion of international retailers into Africa e.g. Walmart</li> </ul> <br /> <strong>Secondly: </strong>In 2010 Anardarko and Eni discovered the Mamba South Gas field in Moazmbique: <ul> <li>150 trillion cubic feet of Natural Gas recoverable reserves.</li> <li>This would make Mozambique one of the largest natural gas producers in the world.</li> <li>Production was expected to start in 2018</li> <li>I got to thinking, now that Gas prices had collapsed, what is the fate of this project and the people who are desperately relying on its prosperity?</li> </ul> <br /> <strong>I&rsquo;m paid to be a sceptic</strong><br /> I see a lot of investment opportunities as I&rsquo;m sure you do too.<br /> Most are similar types of &nbsp;investments - not a bad thing just not terribly exciting.<br /> Recently I&rsquo;ve been seeing a LOT of energy related investments &hellip; of course that&rsquo;s no different from a year ago except that energy prices are now 40 &ndash; 50% lower.<br /> I am weary of a formerly crowded space rebounding in a V fashion. &nbsp;The sceptic in me thinks the week hands and the hot money still need to capitulate before a buying opportunity presents itself in the Energy patch.<br /> To that end I got with my good friend Brian Shapiro at <a href="http://simplify-llc.com/">Simplfy LLC</a>.<br /> Brian is sitting on a treasure trove of private market data &ndash; tracking hundreds of individual private managers - &nbsp;performance, holdings, terms, risk metrics, public filings etc. etc.<br /> We came up with this infographic which I think tells the story of how we should be thinking about any upcoming Energy Investments. <div><br /> <br /> <strong>Figure 2 - Source: Simplfy LLC.</strong> <div>It seems like the real distressed energy cycle is still ahead of us.<br /> Now is the time to be vetting managers and offerings in anticipation of capital drawdowns into the meat of the distressed cycle.<br /> Happy Hunting!<br /> Warm Regards<br /> Greg<br /> <br /> <br /> <br /> Thank you for reading my post. I regularly write about private market opportunities and trends. If you would like to read my regular posts feel free to also connect on <a href="http://linkd.in/1BVVvwj">Linkedin</a>, <a href="http://bit.ly/1O2fbla">Twitter</a> or via <a href="http://eepurl.com/bfZ0j5">Atlanta Capital Group</a>. <div>&nbsp;</div> </div> </div> </div> </div>

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