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Investment Owl, 4th Floor Acacia Mall, Kampala (2026)

25/05/2022

Whisky Galore – a great long-term investment

Most of the investments that we promote are a little dry and dusty – here is one to both whet your financial appetite and wet your whistle!

The majority of our favourite investments are either fixed term/fixed return or more speculative investments where higher risk means potentially higher reward. Investment into rare and old whisky is a longer term play that has continuously delivered double digit annual returns for the more patient investor. After a lot of research over the last three years I have myself invested in rare whisky and I am now the proud owner of my own cask of single malt Scottish whisky that is stored in a bonded warehouse in Scotland. It is fully insured and I can visit it and taste it whenever I want but my cask will probably be at its most valuable and drinkable sometime around 2040. By which time I expect that it will be worth around TEN times what I paid for it.

In uncertain times a whisky cask gives investors the opportunity to benefit from an investment into an industry that has performed exceptionally well over the past decades and that is non-correlated to financial markets. The Scotch Whisky industry is rich in heritage, GI protected and renowned across the globe. Our partnerships allow our investors to purchase casks of rare whisky and have them stored in the best conditions for maturation whilst being monitored by experts to help them achieve their full potential in terms of both taste and profitability. Once they reach the ideal age for enjoyment and/or sale we help you to sell or bottle your cask. Imagine…….your own rare whisky label: the “Jon Pedley 18 year old Aultmore Single Malt”!!!

The entry point is also fairly low. Casks of younger whisky (1-2 years) can be acquired for as little as £3200; a popular maturing whisky (7-10 years) for between £7000 and £12000; and should you particularly want a 30 year old whisky cask then as long as you have between £300k and £700k then we can help!! A Macallan cask purchased for £5000 in 1986 sold earlier this year for more than £900,000! This investment is also exempt from capital gains tax.

Proposition: We help you select a cask according to budget and timeline, acquire the cask, and provide annual updates on both your purchase and the industry. This is a longer term investment where you can expect to make double digit returns (10-13% per annum) on an investment of between ten and eighteen years

In the past I have seen clients buy casks of whisky or barrels of fine wine for newborn babies and younger children with the intention of giving their offspring the purchase when they turn 18 or 21 years of age. Others particularly like the idea of guaranteeing that they will have something exceptional to drink in their retirement – or to sell after they are no longer receiving an income.

A fun investment into a physical asset where returns and value are unaffected by the world economy. What´s not to like? Cheers!!!!

16/05/2022

Risk and Reward – investment stages: a guide…….

If you want to make higher than average returns then you will have to take higher than average risk. Anyone that tells you differently is wrong. If you want certainty and predictability then the only sure investment strategy is to bury your money in a hermetically sealed box on land that you own, with some decoy digs, guarded by well paid mercenaries, protected by movement sensors and covered by CCTV. The predictability is that the cash will still be there when you go to collect it, the certainty is that it will be worth substantially less than when you buried it – inflation in UK will hit 10% this year. But what about the banks you cry? They are safe! Aren’t they? Tell that to an employee of Lehman Brothers, BCCI or any of the 511 banks that have failed since 2009. Yes, five hundred and eleven. In Uganda only the first 10 million shillings of your wealth in any bank are protected. Yes, ten million. Or less than $3000.

Investment Owl generally promotes two types of investments – fixed interest, fixed term investments that are asset-backed where risk to capital is well-mitigated; and early stage investments into exciting businesses with the potential for exceptional growth and extraordinary returns.

At the current time we have helped clients to invest in three companies that I believe will make between 15 and 55 times the original investment in a period of between 6 months and 4 years. In some cases our clients could make more from the investment that we introduced them to than they have earned in the last 5-10 years. But there are absolutely no certainties and the timelines are almost impossible to accurately predict. Clearly this type of investment is not for everyone.

Personally I love early stage investment because of the rewards and the thrill of being involved with something new and dynamic. I am happy with the very earliest stages of higher risk investments – hardly any of which I introduce to our clients. But even within the higher risk/return arena there are varying degrees of risk and return. Essentially the longer that a business has been around the more likely it is to succeed. When you buy shares in a company they will usually fall into one of the following categories:

· Pre-seed – almost always a “friends and family” round of fundraising into a business that is conceptual rather than actual. Expect failure or huge returns. Probably the former

· Seed – the funding to take a business from concept to actual – very high risk, very high potential returns, less than a 10% chance of success, and a return of 20x or more

· Series A – often termed “pre-IPO” – the business exists, it has some turnover, it is demonstrating potential and requires funding to take it to the next level and to a potential listing on a minor exchange. A 20% chance of success and a potential multiple of 10x or more if it makes it. No guarantees of an exit date

· Series B – still early stage investment but by this time the business is growing, usually profitable on an EBITDA basis and failure is looking unlikely – so your chances of getting more than 5x are slim and you will be holding these shares for 3-5 years or more to do so

· Series C – almost out of early stage, listed on a stock exchange, you are buying founders shares to aid growth and 2x at some stage is a realistic expectation

· Fully listed on a major exchange – you don´t purchase these shares for capital gain but for income. A good stock will give you both in time. Probably.

I never invest in pre-seed, rarely in seed but often invest in Series A. I don´t expect all of my investments to work, hope to quintuple my money in five years on more than half my investments, and aspire to getting at least one 20x every three years. It is not an investment strategy for the faint-hearted!

12/03/2022

Does Fortune favour the Brave?

New years can mark new beginnings, new attitudes and new opportunities. Let us imagine, for just a second, that you have both won some money ($100k) and that you are sick of investing in banks, treasury bonds or property. Whilst these are three of the safest, they are also three of the least interesting and least rewarding asset classes at the current time. You have recognised that even high returns like 15% per annum make your life easier but are a long way away from life-changing. You want 2022 to be different. And so, without telling your “significant other” (!) you invest $10k into ten early-stage businesses that pass a few simple tests. The results over the next five years are mixed:

Ø 2 failed completely

Ø 2 gave you only your original investment back

Ø 2 doubled in value

Ø 2 trebled in value

Ø 2 gained 500% (the average gain in good tech businesses in around 8x over five years)

I would be ashamed of this as a bag of results (!) but even with these mixed outcomes the $100k you invested is now worth $220k. If you had put it with a bank in a fixed deposit account it would be worth less than $124k. If you had invested it in a high yield bond with us it would have been worth around $200k assuming that returns stay where they are at the moment. Every one of the ten businesses that you backed would provide bi-annual updates and news flashes when something amazing happens. You would have the highs and the lows of being part of something new and exciting, you would be a job and wealth creator, and you would have the unmistakeable rush of seeing an educated bet pay off. Or you could have a new 2022 diary from your bank and the joy of knowing that you contributed to the directors humongous bonus package. Take your pick!!

Over the last five years I have personally exited businesses with returns of between 4.5x and 9x original investment. This year I am expecting one exit at 53x and one at 18x. My best investment is currently forecast to materialise at 78x although not till 2025/6. I can wait! I have only had one speculative investment fail completely in the last five years and that was into a medical development company. I learned my lesson and would not invest in this area again because it is very complicated and I am not a scientist.

The investments that we recommend pass the following tests:

Reputation – are the people behind the business reputable, knowledgeable and proven: have they exited a new business successfully before?

Ability – is the management team fantastic operationally, financially and in terms of developing their market? If the management team isn´t great then we don’t back it because it won´t succeed

Expertise – do the people involved at every level have experience in this or a very similar field?

Skin in the game – are the owners invested with time, soul AND their own money?

Sector – is this a sector where we can achieve high multiples of valuation? (Think AgriTech, medical ma*****na, Artificial Intelligence, innovation, online delivery etc)

Exit – how are we getting out, when are we getting out, what are the threats to an exit within a maximum of seven years?

I like getting our clients a good regular return on their money. It´s satisfying in the way that putting on an old but comfortable jacket is. But it doesn´t thrill the soul. Finding investments that generate a life-changing return and seeing them fulfil their potential is akin to scoring the winning goal in the last minutes of a Champions League Final.

I came across such an investment about three weeks ago. It is the usual story: right place, right time, right people. Our access to it has been made possible only because of a delay occasioned by Covid and the subsequent need to generate a small amount of additional funding quickly. The unusual thing about this investment is that it will very quickly return nearly all the initial capital (within 6 months) and thereafter generate significant income before an exit at up to 18x the original level. I like it so much that I am going to syndicate it to allow others to benefit from it.

Deals such as this, and another exciting AgriTech opportunity, are rare and we are always under strict non-disclosure agreements but I am more than happy to share information on a 1-2-1 basis. If you can afford to take a qualified risk with some of your wealth then get in touch. And remember: fortune favours the brave! Particularly at the current time when because of Covid, macro-economic concerns and a malevolent Russian dwarf it seems to me that a package of well-researched speculative investments delivers more certainty than the traditional safe havens.

Do get in touch if you want to know more. 2022 could be the best year yet.

14/10/2021

Alternative investing into our planet

If you live in sub-Saharan Africa then you cannot be a climate change denier. Whilst to some who live in the cities of Northern Europe climate change may be an interesting dinner party conversation, to those of us who live in economies dominated by agriculture it is a reality that is dramatically changing the environment we live in, the lives of those we love, and the economies that our countries depend on.

When I first came to Uganda in 2006 I asked a local in south-west Uganda when rainy season began. “The eighteenth of April or the next day,” he replied. And he was right. But just fifteen years later none of us would be certain. And few of our educated guesses would be right.

As we approach COP26 in this year of milestones linking climate, nature and people it is essential that the best minds in finance, commerce, technology and supply-chain apply our minds to how we act to save our planet, protect our environments and prosper our peoples. The inescapable fact is that if we don’t do so then the cost to all of us, and our children and grandchildren, will be a price that we simply cannot afford to pay.

There is, of course, the need to legislate and that will hopefully happen in a unified and fair way by governments that recognise that the heaviest price being paid in terms of climate change is by the countries that have contributed the least to carbon emissions and pollution.

Legislation is not generally the responsibility of financiers, entrepreneurs and businesspeople, but innovation is. And whilst legislation will be imperative to restrain the polluters and set boundaries that can´t be broken by governments, businesses, manufacturers and individuals, it is just as essential that the business community and the finance industry co-operates to fund and deliver innovation that moves us towards a net zero economy and meaningful progress on reversing climate change.

COP26 recognises that finance is key to achieving its goals – indeed the third of these goals is to mobilise finance as follows:

Mobilise finance To deliver on our first two goals, developed countries must make good on their promise to mobilise at least $100bn in climate finance per year by 2020.

And it goes on to say:

International financial institutions must play their part and we need to work towards unleashing the trillions in private and public sector finance required to secure global net zero.

It is the private sector financiers and investors, and the trillions of dollars that they have access to that excites me most. Because outside of the governments, politicians, civil servants, lobbyists and pressure groups that will throng the Conference there is a cohort of entrepreneurs that are passionate about reversing climate change, that have fantastic

commercially viable and innovative ideas, but who require funding and strategic support to make these ideas a reality.

And so I want to suggest that as well as taking personal responsibility for our carbon footprint and doing all that we can to minimise our negative impact on planet earth, we should also be investing in line with Environmental, Social and Governance principles at all times – and ensuring that 20% of our investments in 2021/22 should be directly targeted at investments that will have a positive environmental impact.

I have worked in the Alternative Investment sector for more than three decades and watched with delight as innovative, exciting and impactful ideas that can change the direction of climate change are ratified and structured to allow investors to be part of the solution.

At the current time we are helping to raise money for a number of game-changing technologies and implementations including:

· A scientist that has developed a coating that dramatically improves the performance and lifespan of solar panels

· A business that recovers waste heat from industrial processes and convert that into useful energy to make electricity

· A global leader in renewable energy, bespoke financing, consulting, project management and development, with expertise across renewable energy solutions. They are active throughout Australia, Europe, SE Asia and North America where they work with clients at the local level to provide a customised solution to individual challenges

· A one-stop provider of mobile fully managed infrastructure solutions aimed at Electric Vehicles. They allow private and commercial EV operators to experience similar levels of user-convenience and productivity as with internal combustion engine vehicles

· An advanced nano-materials company whose materials are designed to efficiently convert incident high-energy light into lower energy light which dramatically improves the performance of photo-voltaic cells

· A programme that seeks to help small-holder farmers to develop a truly circular economy in the context of their farms where organic operation yields massively improved returns with positive environmental impact

· An indoor farm that uses vertical aeroponics to reduce water use by more than 80% whilst eliminating pesticides and fertilisers, reducing grow times by more than 50% and increasing productivity by more than 20%. These indoor farms can be built in small areas and city centres which will also dramatically reduce food miles

· A mobile application that allows businesses to swap or give away IT and office equipment in a way that reduces waste, empowers smaller businesses and meets their responsibilities for safe and environmentally compliant disposal of assets

All of these opportunities are commercially credible and offer a yield far higher than that which the banks would give for a foreign currency investment. Investors typically commit

between $10k and $250k into a business that offers them both security and the chance to make a positive impact in the vital area of climate change.

In summary it really is possible to be both a successful and an impactful investor. Alternative investments can empower brilliant people, make fantastic ideas a reality, and positively impact the world that our children and grandchildren will inherit.

COP26 has the resources to discuss, agree and legislate. It does not have the financial resources to help the world fulfil its potential by deploying new technologies, systems and ideas. The business and investor community does and now is the time. The alternative is too bleak to consider.

12/09/2021

HEALTHY INVESTMENT – NOW IS THE TIME!

Many years ago I used to bring small groups of troubled Britons to Uganda to help with some of the charitable construction work that we were doing deep in the rural communities in South West Uganda. The idea was that (as well as building structures for schools, water tanks, medical centres and maternity units) these failing yet entitled Europeans would learn just how lucky they were to be born in a developed country and gain an appreciation of where they ranked on the global opportunity league table. It worked in about 50% of cases and lives were transformed for which I am immensely grateful to God and the communities that we bothered!

One of the first stops after the airport in Uganda was Mulago Hospital, the National Referral Hospital, and then a place of such misery and despair that it regularly brought allegedly hard British men to tears. It was a calculated move to start to reset the victim status that is so embedded in some Westerners. From Kampala we would head to the village where they would stay and help to build a medical centre, then a maternity unit, and finally a small hospital that we hoped would serve the community, extend life expectancy, and reduce infant mortality from above 20% - a statistic that is both mind-blowing and heart-breaking.

It worked to a point. The community had a new facility and health outcomes did improve but not to the extent that I had hoped. The deal that we did was that we would build them and the government would run them. And therein lies both the problem and the opportunity.

Even well-funded Governments do not do healthcare well. Ageing and growing populations are a burden that the public purse cannot fund adequately anywhere on the planet. In countries like my beloved Uganda where the health budget is 30% of what the WHO deems to be the bare minimum failure is guaranteed. Over the last two years the Covid-19 pandemic has proved beyond a shadow of doubt that the world´s best people are not in government. The response around the world has been and continues to be chaotic. You wouldn´t let any of these people near your business or your bank account. So why do we let them near our patients?! The only perverse joy in this pandemic has been watching the politicians that would usually fly to Dubai and India to get treatment suffering the horror of the healthcare systems that they have under-funded to the point of collapse.

Governments have borrowed even more heavily over the past two years and there is no chance that the government health budgets in most of sub-Saharan Africa are going to increase. Systems that are already broken are going to fall further into disrepair and now is the time when we have to do things completely differently. That applies in the UK where the population has grown by nearly 35% since the NHS was formed and in Uganda where it has increased by 600% in 60 years. Public health isn’t working.

In both countries healthcare would be better delivered if it were fully privatised. In the UK the unravelling of a 73 year-old system that costs £212bn and employs 1.5 million people (nearly 5% of the UK workforce) this will be a gargantuan task. But in Uganda the deconstruction of the existing system would be a good deal more manageable and is, I would argue, essential.

Private business is able to deliver meaningful healthcare services at a much lower cost than government. The layers of bureaucracy, cost of corruption and even misappropriation of scant resources can be rationalised and policed far more effectively in smaller, more agile units. And even a poor population is willing and able to pay for healthcare. Indeed, of the $14 that is spent annually per head on healthcare in Uganda the majority ($9) comes directly from the patient and their family with only $5 coming from the government.

Technology, access to virtual treatment, and mobile money services means that we can, at last, begin to democratise healthcare. If Ugandans are already paying $9 a head every year (32,000 UGX) towards a failing service that they only access in emergencies how difficult would it be to get them to pay three times that amount every year via a monthly mobile money payment in order to guarantee access to better quality healthcare? And how convenient would it be for governments anywhere to dispense with buildings, people and overheads and just send the money they currently spend to a private healthcare provider as a patient levy or even send it direct to the patient´s mobile money health services account?

Buildings already exist, trained workers are desperate to escape the system that is failing them as badly as their patients, impact investors are lining up to provide cheap money to equip new centres, and the cost of capital has never been so low. And the consciousness of the world has been very rudely re-directed to all things “wellness”.

The first thing that I want to do once the dust from the Covid whirlwind has settled is to form a consortium that makes a private healthcare system accessible to normal people in the area where I live in Uganda. That won´t look like an Aga Khan General hospital, a Papworth Heart Hospital, a Great Ormond Street Childrens Hospital or a Royal Marsden Cancer Hospital – those kind of specialism’s will remain the preserve of the rich for the foreseeable future. But I believe that offering the general population 24 hour access to competent, caring doctors who are capable of diagnosing, testing and treating the illnesses, conditions, diseases and ailments that beset most people at various times in their life, and doing so profitably, is easily achievable.

At various points in history a “reset” takes place. My hope is that the Covid pandemic will provide a reset on public health in Africa and that the population can be educated to take responsibility for financing its own healthcare as the private sector provides the infrastructure, accountability, expertise and skills to effectively deliver routine healthcare compassionately, efficiently and profitably. There is a massive opportunity commercially and altruistically.

28/08/2021

Bull**** Investments – a theory

One of my favourite books is by the late anthropologist David Graeber and is catchily entitled “Bu****it Jobs – A Theory”. It postulates that more than 70% of the jobs currently held by people in the developed (hah!) world are completely unnecessary and have zero positive impact on their holders, the employers, the business, its customers or anyone at all ever. And that 50% of the people doing these bu****it jobs are fully aware of their irrelevance. Scary stuff. I have just come off LinkedIn and my considered opinion is that Mr Graeber underestimated the percentage. My feed is filled with people who appear to do nothing but publish ridiculous polls and then talk about how impactful the poll was. And then other people, to whom clearly not even their dog listens, who post facile comments under the vapid posts. Just for the record here is a dictionary definition:

Influence noun

the capacity to have an effect on the character, development, or behaviour of someone or something, or the effect itself.

When your post provokes someone with the intellect and memory of a goldfish to click a vote button, that is not influence. It’s a measure of how mindless your network is. For many years I haven´t understood why businesses pay people to do jobs that generate no positive impact. Nowadays I don´t even understand what the job description means. And often I don´t understand how the business could hope to survive. And I never have an idea how a perennially loss-making business could have a valuation in the billions.

I think that the truth is that most people are too scared of looking stupid and so won’t question the absolute lunacy of many of the businesses that claim to be wonderfully disruptive and are actually just desperately bad.

More than 95% of the investments that I look at are nonsensical. They either return so badly they are effectively loss-making (banks), pay so much that they are doomed to fail, or are cloaked in the aforementioned aura of disruption, tech and game-changing in order to obscure the fact that they are run by people without an iota of real-world experience or a basic business plan. All of the above will come with Investment Memoranda that would confuse an investment committee made up of Stephen Hawking, Warren Buffett and Albert Einstein.

So here is my theory and the best bit of investment advice you will ever get. Bu****it investments are always scarily complicated, impossible to understand, and missing a description of the basic business premise. If you don´t understand it fully and believe it intellectually don´t do it. This concludes the lesson.

16/08/2021

A real gem of an investment

The majority of my life is spent looking at investments to try and find that rare thing – an interesting, profitable and safe investment. And that is a challenge at the moment in a world where nothing is certain and very little is predictable. At the moment I hate property investment as an asset class and I am looking forward to seeing myself and my clients exit property development investment completely by mid 2022. A combination of slipped completion dates occasioned by the pandemic, worsening lending criteria by banks, escalating material costs and a very uncertain macro-economic future make this an investment sector that I really don’t like over the next three years – unless it is a business specialising in distressed property of which I fear there will be a surplus. We have two property investments that are stressed at the moment and whilst investor capital is safe I am also stressed by it!

And so I have been looking specifically for investments that are not property-based, not correlated to markets that I expect to correct substantially, and that have a credible investment strategy. As most of my clients know Investment Owl usually recommends less than 5% of the investments that we review. In these challenging times we are now reject ting more than 97% of what we look at.

I have discovered a real gem amongst all the dross. It is often said that diamonds are a girl´s best friend but I am pleased to report that if you are looking for a low entry investment that pays a monthly income then emeralds, not diamonds, can be an investor´s best friend. Precious metals, gems and mining are not an area that I have favoured in the past because investments into this industry have been fraught with danger but I have been watching the progress of a London jeweller for some years and they have structured an investment to support their growth plans which offers a good return, paid regularly and secured against assets in the UK and Colombia where they mine emeralds. The investment is administered in the UK.

In simple terms the jeweller is building a business model that is vertically integrated. They started as a specialist sourcing high quality gemstones, then began making jewellery, expanded to become a retailer of their jewellery and have developed further to have their own workshop in Colombia where they actually cut emeralds, rubies and sapphires directly purchased from the mines. They are founded on the strongest ethical foundations and are committed to operating a sustainable business model.

Since 2018 they have been asking investors to provide funding to grow the business and allow them to exploit economies of scale. It is essentially the provision of working capital to a business sector where the mine to sale period is around four months and the returns to the jeweller on each set of gemstones that they mine, grade, cut, polish and sell is between 30% and 60%. This allows them to offer a very good annual return paid every month. Details as follows:

Invest $11,000 - $36,000 and earn 10% return per annum (0.83% pcm)
Invest $36,001 - $72,000 and earn 12% per annum (1% pcm)
Invest $72,001 and above and earn 15% per annum (1.25% pcm)
All returns are paid on the 1st of each month
12- month investment
UK Security Trustee hold a legal charge on behalf of investors
Track record of paying out returns since 2018
They do also offer investors the chance to travel to the mines in South America and select a stone which they will polish and set in jewellery at cost price but that may not be for everyone!

But in these uncertain times an investment into an established UK business with security, a strong track record and a perfect payment record will be attractive to many. Particularly as returns are paid monthly and the investment period can be as low as 12 months. If this gem of an investment attracts you then get in touch.

Investment Owl

25/05/2022

16/05/2022

12/03/2022

14/10/2021

12/09/2021

28/08/2021

16/08/2021

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