First Rock multi-billion investment pipeline growing wide
$1.7 billion worth of deals secured awaiting IPO funds
BY DURRANT PATE
Observer business writer
Regional investment outfit, First Rock Capital Holdings is reporting that its investment pipeline has grown to US$44 million ($5.8 billion).
Already the company, which has offices in Jamaica, Cayman, Florida and Costa Rica, have secured investment deals in these jurisdictions amounting to $1.7 billion awaiting the proceeds of its initial public offer (IPO), which opens tomorrow, seeking to raise upwards of US$18.4 million.
Shares are priced at US$0.12 or the Jamaican equivalent of $16.67 per share with a minimum subscription of 1000 shares.
The IPO is slated to close on January 31. Last Friday First Rock hosted an investor's briefings at 5 Seaview Avenue, Kingston 6, at which time the principals of the company made a last pitch for investors to subscribe to the IPO, providing the large gathering with critical information about the company with a view to influencing their decision.
First Rock co-founder and Chief Executive Officer Ryan Reid told the gathering that the company has built out a formidable investment pipeline with "the proceeds of the IPO used to take advantage of the many investment opportunities out there. Currently we have $1.7 billion worth of transactions that we have entered into agreements to execute. These transactions once we close our IPO successfully we will be able to execute on these transactions spread across various markets."
CHERRY-PICKING FROM THE PIPELINE
He said the pipeline has rapidly expanded and now stands at US$44m, which puts First Rock in a real good position so it can "cherry pick" from the pipeline. He was quick to emphasise that First Rock would not be investing in all the business opportunities in the pipeline but will be meticulous in its investment options.
Reid spoke about First Rock's generous dividend policy explaining that when the company was being formed nearly three years ago, the principals wanted to have in place an attractive but still plausible and reasonable dividend policy.
"So what we have done is that we have set that dividend policy at a minimum of 50 per cent of profits. So the discretion thatthe board have is not whether to pay a dividend, but once we declare a profit we must pay," Reid underscored.
He jumped at the opportunity to point out to the large gathering of investors and finance company principals and employees that the board does have the discretion to pay whatever in excess of the 50 per cent of profits earned, which will be paid quarterly.
COMPELLING REASONS TO INVEST
Reid articulated five compelling reasons to invest in First Rock's IPO. They are as follows:
(1) Risk adjusted returns with downside protection. We believe in real assets that you can feel, see and touch, so real assets offer that stability.
(2) Access to lucrative real estate markets.
(3) Divided policy.
(4) Diversification across all market. Diversification is key to our risk mitigation strategy. Not to be overexposed in any one market. Diversified across multiple jurisdictions.
(5) Ability to invest alongside seasoned entrepreneurs. The company currently have 79 shareholders.
The First Rock CEO and co-founder pointed that 80 per cent of the company's capital is deployed in commercial opportunities, "because we want to be able in every transaction to do proper due diligence and we feel that due diligence can be best executed when we look at companies vs individuals. So that is why we are so heavily weighted on commercial opportunities and residential provides that kicker to give greater returns for shareholders."
He reiterated that First Rock is currently invested in the jurisdictions of Jamaica, Cayman, United States, and Costa Rica given that the company is bullish on these economies, particularly Jamaica, where most of its allocation is invested.
He pointed out that First Rock have residential and commercial opportunities in Jamaica, residential investments in Cayman, residential and commercial investments in Costa Rica, and residential assets in the US, specifically Florida.