US in­vestors late for Iran deals worth bil­lions, Grey­lock says

The Pak Banker - - MARKETS/SPORTS -

US in­vestors are at risk of get­ting shut out of deals in Iran while their Euro­pean com­peti­tors get a head start on bil­lions of dol­lars in op­por­tu­ni­ties un­locked by the lift­ing of in­ter­na­tional sanc­tions, ac­cord­ing to Grey­lock Cap­i­tal Man­age­ment.

"It seems like the US might miss this op­por­tu­nity be­cause the Euro­peans are go­ing to move re­gard­less," Hans Humes, Grey­lock's chief ex­ec­u­tive of­fi­cer and chair­man who trav­elled to Iran in June, said in an in­ter­view in Mex­ico City. "It al­most doesn't mat­ter what the US does be­cause once it starts open­ing up to Europe I think the econ­omy in Iran will start to move."

For­eign in­vestors and multi­na­tion­als are lin­ing up to re­turn to Iran af­ter last year's his­toric nu­clear deal led to the lift­ing of in­ter­na­tional sanc­tions in Jan­uary. Un­til then, firms were pre­vented from trans­fer­ring money in and out of the Is­lamic re­pub­lic, whose $370 bil­lion econ­omy is pro­jected to grow 5.8 per cent this year.

While Euro­pean com­pa­nies like Ger­man au­tomaker Daim­ler AG and France's Air­bus Group SE have al­ready signed deals, Amer­i­can cit­i­zens and com­pa­nies re­main lim­ited be­cause the US has kept some of its own re­stric­tions tied to ac­cu­sa­tions of ter­ror­ism and hu­man rights abuses.

Chang­ing the Trea­sury Depart­ment's Iran pol­icy to­ward pro­cess­ing pay­ments would "open things up," said Humes. His New York-based hedge fund, which over­sees about $1 bil­lion, fo­cuses on dis­tressed and high-yield­ing emerg­ing-mar­ket debt.

The US sev­ered ties with Iran a year af­ter the 1979 Is­lamic rev­o­lu­tion that top­pled Amer­i­can ally Shah Mo­ham­mad Reza Pahlavi and led to the US em­bassy hostage cri­sis in Tehran. Pres­i­dent Barack Obama ini­ti­ated a dé­tente in 2013, even­tu­ally seal­ing an in­ter­na­tional ac­cord with Iran, de­spite Repub­li­can law­mak­ers' op­po­si­tion. Repub­li­can pres­i­den­tial can­di­dates Marco Ru­bio, Don­ald Trump and Ted Cruz have all pledged to ei­ther nul­lify or rene­go­ti­ate the terms of the deal.

Humes sees the big­gest op­por­tu­ni­ties in Iran's en­ergy, in­fra­struc­ture and cor­po­rate ser­vices. He said that the in­vest­ment op­por­tu­ni­ties may be worth "mul­ti­ple tens of bil­lions" of dol­lars in the next five to 10 years, as­sum­ing political sta­bil­ity.

urope is likely to get in first with banks there hope­fully start­ing to ramp up trans­ac­tions with Ira­nian lenders in the next year, Humes said. Mean­while, the en­trance of US in­sti­tu­tional in­vestors still likely two to three years away, he added.

"Ev­ery­body sees the op­por­tu­nity in Iran," he said. "It's go­ing to hap­pen and the trig­ger for that will just be the pay­ment sys­tem open­ing up."

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.