“In the rarified environment of frontier markets, there are relatively few people who know their way around. Peter Bartlett is certainly one of them.” — Rupert Boyd, head of global sales, Standard Bank (London).
Nice article in the October 2008 Trader Monthly on Peter Bartlett, the 44-year old CEO of London brokerage Exotix, Ltd., a securities firm that, per its web site, focuses on “broking illiquid bonds and loans, boutique investment banking, and structuring Emerging Market [loan and debt] instruments.” Bartlett’s story is as interesting as it is inspiring (his “harrowing experiences” in Congo and Nigeria in the late 80s and early 90s sound “made for a superb lesson in risk-taking”). Exotix, which is owned in part by private equity entity IPGL, has offices in London, New York, Buenos Aires, Brazil, Japan and Nigeria. Furthermore, its site trumpets the firm as “a market leader in certain African countries, North Korea, Cuba, Bosnia and several other esoteric markets.” Some more pertinent details:
- In June 2003, the firm closed a $250m sovereign debt transaction in Iraq.
- Earlier this year, it completed a $120m deal centering around a zinc mine in Yemen.
- Lately, the firm has been busy trading illiquid, Castro-era Cuban debt (some pundits opine that with easing U.S. restrictions, the price of Cuban paper could eventually double).
- Bartlett is considered one of the few international brokers to have actually spent time in Pyongyang (North Korea).
- Exotix has also “dabbled in debt instruments involving Serbia,” trading New Financing Agreement (NFA) loans. Priced around 15 percent of face shortly before Slobodan Milosevic’s exit, the loans traded around 95 percent two and half years later.
- “Thanks in large part to Bartlett’s pressure for conformed market practices and better transparency,” by 1996 the Russian “MinFin” bond market became one of the world’s most actively traded debt markets.
Currently, Bartlett and his Exotix team find themselves focusing on financing equity deals in Africa, “which is currently benefitting from debt relief, improved economic policies, a surge in commodity sales (oil especially) and mushrooming trade with China and India.” For example, in 2007 Exotix “helped an emerging West African telecom entity, Ghana Telecom, place $200m in an aggregate principal amount of corporate bonds–the first dollar denominated African corporate bonds to be issued outside of that continent’s big players, South Africa and Nigeria.” And two years ago the firm set up its own sub-Saharan African stockbroker to facilitate its investors access to illiquid stock exchanges.
This year Bartlett was back to the kind of work that got him into frontier markets in the first place, scouring Kenya for investment opportunities in the midst of political upheaval and bloodshed. Such a picture might conjure mixed feelings in some. But Bartlett describes his firm and his methods as “a force for good.” After all, but for Exotix’s illiquid-debt brokering services, the paper in question would be worthless. To Bartlett, it’s all worth the risk.