Invest in what you are most familiar with. Companies and startups that you are personally familiar with, or a product you have a lot of experience with, often make better investments because you are in a position to understand their competitive benefits. Excitement alone is not a good barometer of financial potential, but pair that with knowledge and experience, you are much better positioned to make an investment decision.
As a part of my series about the The 5 Essentials of Smart Investing, I had the pleasure of interviewing André Wright.
André Wright is Executive Vice President of Standard International Group, the New York City-based boutique financial advisory firm he founded in 1996. With a focus on revitalizing critical infrastructure projects across the U.S. Municipal, Caribbean, and West Africa, Mr. Wright brings a decade of Wall Street experience and over thirty years of financial advisory and investment banking expertise to some of these regions’ most pressing infrastructure problems. Working with country leadership, government groups and regional experts, Standard International Group’s advisory services are built around comprehensive financial analysis, local knowledge and industry expertise with a focus on creating transformative solutions and successful outcomes. Standard International Group creates and shares opportunities with global investors, delivers debt and equity capital to sovereign and municipal governments and corporations, all while emphasizing the importance of positive results on a local level. Mr. Wright has completed successful projects across the U.S. Virgin Islands, Curaçao, St. Maarten, Angola, Puerto Rico, Trinidad & Tobago, Equatorial Guinea, Jamaica and other locations around the world. As a registered municipal advisor under the Municipal Securities Rulemaking Board regulated by the U.S. SEC, Mr. Wright frequently counsels government groups on financial matters. Mr. Wright earned his Bachelor’s degree in Business Administration from Morehouse College and resides in New York City.
Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the backstory about what brought you to the finance industry?
I was interested in finance from an early age. I grew up in Joliet, IL, a suburb of Chicago, in a close family of athletes. When I was 13 years old, I worked as a golf caddy and listened to the golfers talk about their work in finance. Spending over four hours on the course together, we got to know each other. The owner of a local stock brokerage — just a three-man operation — took an interest in me, providing me with literature on investments and securities. I also would ask him questions after I read it, and started reading books on securities from the library. I became significantly interested in the world of finance and the importance of money matters. This was over 40 years ago but I still remember that finance was always exciting and interesting to me.
Today, as founder of Standard International Group, I’m taking 30+ years of experience and U.S. knowledge and resources, and bringing it to the Caribbean and West Africa markets in need of positive change. Financial engineering is common in major markets today, but other parts of the world are also in great need of good and workable solutions to their most pressing infrastructure problems. There is opportunity to create win-win solutions for emerging markets, areas that are too often overlooked. Once structured correctly, they can be great investment opportunities as well.
Can you share with our readers the most interesting story that occurred to you in your career so far? Can you share the lesson or takeaway you took out of that story?
The most interesting stories always stem from the problem-solving aspects of my work. Finding solutions and bringing everyone together to make real, measurable progress is our mission on each and every project.
Standard International Group recently completed $193M in financing for St. Maarten’s Princess Juliana International Airport (PJIAE) Terminal Reconstruction. On behalf of St. Maarten and Princess Juliana International Airport, we advised on the $50M loan from The European Investment Bank (EIB) and $50M grant from The World Bank, for a total of $100M in investment capital combined with $22M from the Government of St. Maarten in the form of liquidity support. We also ensured the project received a maximum insurance claim payout of $71M by introducing Willis Towers Watson to serve as insurance advisory services provider.
While this is a recently-completed project, our firm’s work with Princess Juliana International Airport dates back over 20 years. St. Maarten was recovering from hurricane Luis in 1995, and we started helping them out in 1999 after they experienced years of financial problems. We made significant progress, and by 2001, we were working on several new projects. I was there on 9/11 in the office of the airport director. He turned on the TV and we all saw the planes hit the twin towers. I was the only American in the room, amongst an international team of Dutch, Canadian or local St. Maarten people. It was a very difficult moment, but one where we all came together. I had to stay in Curaçao for a week before I was able to fly home. When you work with clients for this long, you will go through lifechanging moments together.
Fast forward to September 2017, when St. Maarten was hit with the category 5 Hurricane Irma, which blasted the island with 180-mph winds and greatly damaged the island’s infrastructure including Princess Juliana International Airport. Immediately, we communicated with bondholders, rating agency and insurers and on the first day the airport was reopened we were there to assist PJIAE in the insurance claim and reconstruction plans. Today we are looking forward to the reconstruction of this important airport and all it means to the country and surrounding island communities.
What are clients often looking for, and how do you help them?
Clients are looking for capital and quality financial advice. I help them by listening and truly understanding the client’s questions and concerns. We work collaboratively to simplify the often highly complex financial issues, and come up with ways to move forward. Clients are looking for someone they can confide in and who has a proven track record of success.
Most of our clients are government issuers, corporate borrowers or issuers, and lenders or investors. We deeply understand both sides of the transaction. Governments have high expectations and lenders want high-octane returns. We keep both sides honest to get the deal done. We have a policy of meeting in person — or in today’s world, virtually. The current generation likes to do everything via email, but we believe in building engagement and trust. This means either a face-to-face in person or virtual meeting. This approach makes for longer-lasting professional relationships as well.
What projects are you currently working on? How are these projects impacting people?
Infrastructure is a fascinating and evolving new frontier, and has the power to change the world. Yet across the emerging world, many countries don’t have the infrastructure yet for important initiatives like renewable energy, which will become increasingly important as climate change continues to damage the built environment.
We are currently working on a financing for new electric power generation that includes both solar and diesel, in the Caribbean. A portion of the financing is for carbon-less energy, or solar, while the diesel portion is essential to maintain base load.
Another major initiative across the Caribbean will include desulfurization in the coming years. Per the International Maritime Organization, effective January 2020, cruise, cargo and oil ships have to burn less than 0.5 percent sulfur. Sulfur oxides cause respiratory problems and damage water and soil, and have been a major contributor to pollution. Solutions such as flue-gas desulfurization systems can improve sustainability and reduce sulfur emissions by reducing sulfur oxide concentration. These systems will become more common in the coming years, especially for countries with a huge cruise and maritime presence. How to pay for it, and get the project completed, is where groups often struggle.
Let’s now jump to the main core of our interview. According to a recent report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?
The main causes of lack of financial literacy include the lack of basic math skills, fear and anxiety of financial matters, lack of appreciation of money, and abuse of credit. Building and managing a healthy financial life is very important for people of all ages.
In the current low-interest rate environment, many people believe they can go pick the next stock or derivative to invest in, but it takes years of practice and learning. My advice is, get good at the basics — save money and invest in the basics such as a 401k and life insurance — before venturing into the more complex side of finance.
Be more conservative in the beginning. You can search the web for anything, but the internet doesn’t put the whole picture together for you: it’s just a snapshot, but not the whole photo album. You can look up the meaning of a leverage ratio, and learn about equity and debt finance from reading articles, but what’s missing can be dangerous to a beginning investor. When you make an investing mistake, there’s no rewind.
You get what you pay for. Working with a big firm doesn’t always mean you’re getting the best value. Small firms can often deliver greater value and results, and be nimble enough to change with an increasingly volatile environment. 20 years ago, I was advised by friends at a large Fortune 500 company to remain small. Based on our size, Standard International Group takes a very focused approach to our work, completing just two or three deals per year.
The confidentiality and trust factors get reduced the larger the firm becomes, unless you want to do higher-volume business. Our vision is to provide a high level of service and work on a small number of high-impact deals — projects that truly transform communities for the better.
If you had the power to make a change, what 3 things would you recommend to improve these numbers?
We need to improve early childhood education and training, create a better system of helping people create a financial plan, and help them diversify their distribution of financial resources.
I hold a certificate from NYU’s School of Continuing Education — Finance, Law and Taxation to be a Certified Financial Planner with an understanding investments, insurance, tax and retirement issues. I have three adult children, and this is what I tell them: investment stuff you know. Save your money, you’re going to need it. Take the risk when you’re young, as when you’re older you can’t take as much risk. Most people invest in things they don’t understand; avoid doing this. Take profits and don’t go for the “pump-fakes”, like a fake basketball jumpshot. Also, remember you can’t beat the machine — I’ve won lots of tennis matches but I’ve never been able to beat a ball machine.
The marketers will tell you do index funds, but there’s no easy one-size-fits-all solution to investing. If you’re going to invest, spend the time and study what you want to invest in. Particularly if you’re young, take the profits, sell the stocks, and realize gains. Reinvest and spend some on yourself.
Now to the main question of our interview: You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing. What would you say? Can you please give a story or an example for each.
There are several essentials for smart investing:
- Invest in what you are most familiar with. Companies and startups that you are personally familiar with, or a product you have a lot of experience with, often make better investments because you are in a position to understand their competitive benefits. Excitement alone is not a good barometer of financial potential, but pair that with knowledge and experience, you are much better positioned to make an investment decision.
- Save as much as you can. Saving money should be a lifelong practice, starting from a young age. Put away at least a quarter to half of what you earn. You want to build a nest egg for big purchases, such as a down-payment for a home, as well as maintain a significant war chest. In today’s uncertain environment, it’s more important than ever before to save money.
- Take investment risk while you’re young. Simply put, with more time you can take more risk — whether it’s investing in stocks, a new company or idea. Those closer to retirement age have a shorter investment horizon and less time to rebound. All investors should have a diversified portfolio to mitigate risk.
- Study a particular industry and invest. Set aside a portion of your income to invest, and invest in what you know and love. You might not win every time, but all it takes is one great stock pick to go from beginner to winner. Most importantly, have fun with it and learn — done right, it can be a very profitable and rewarding lifelong practice.
- Take profits. Many people are in this for the long game, and treat stocks like a long-term investment. While they can be, I suggest cashing out and taking profits when you are significantly “up”. Make money and have fun with the process — and be patient, it may take time before you make significant returns.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Growing up in a wrestling family (my young uncle was a state and national champion) and playing collegiate tennis, I realized that sports have a lot of commonalities to real life.
In sports, the game you are playing today is the only one that matters. Re-motivate yourself every day. Make decisions quickly and trust your instincts. Whether it’s a wrestling mat or tennis court, you have to strategize and be aware of the time limit. You do run out of time.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger.
A movement toward greater education for the world’s young people. We need to close the gap between people that have the opportunity to succeed and those who do not, and that starts with education. As a society, we need a movement toward specialized education from an early age — we need to recognize talents in young people and nurture them. We need to train our youth on the importance of financial matters, and give them the tools they need to succeed as they grow up and eventually, run the world. We need to give children and young adults the mentorship they need to build confidence and achieve success.