Reflections from Cartagena Conference

Cartagena is truly marvelous. The beaches. The old town. The food. I had a great time. And I’m not alone. I overheard another out-of-towner saying yesterday to a colleague, “I think all conferences should be held in Cartagena...whether they are about Colombia or not.” True that. But, alas, we did come to work. And work we did -- for roughly 15 hours in a small group talking through the various aspects of the local and regional infrastructure landscape. I found the discussion fascinating, so I thought I’d share a few quick take-aways: Colombian Opportunity: Infrastructure seems to be a national priority of the highest level at the moment. As it was explained to me by a ministry official, the government first brought peace to all the regions of the country. Now it wants to bring jobs and services, which require infrastructure. As such, there is an explicit link made by many of the government officials between peace and stability and infrastructure, which gives you a sense for the urgency with which this issue is considered. In short, there’ll be some truly remarkable infrastructure opportunities for investors in the coming three years. In fact, there are public plans to dramatically ramp up public spending in the years to come. Foreign Investors: The room was full of investors, so it’s clear that there’s an appetite for investing in Colombia’s infrastructure. However, it was also clear that these funds are still trying to find some more clarity on the process. That clarity seems to be coming, but it’s not quite here yet. This is one of the last roadblocks remaining according to many of the capital providers. Due Diligence: I was reminded coming out of these meetings that the projects that tend to fail – and we talked through quite a few failed projects from all over the world to draw some lessons for our hosts – tend to be those where early due diligence efforts and transaction analysis weren’t of a sufficient quality. Of all the factors in the long-chain of risks that go into an infrastructure project, the skill and experience of the people doing the analysis were of the utmost importance to success. And it was clear that the government officials in the room were taking this point quite seriously, which was encouraging. Women in the Workplace: I was recently at an investment conference in another part of the world with roughly 45 investment professionals. Of those, none (zero) were women. At yesterday’s meeting, there were at least as many Colombian women in the room as there were men. I’m not sure why that is, but it was refreshing to see a bit of gender equity in finance. Some other general insights: Cuba: I heard quite a bit of rumbling about Cuba. It’s clear to me that investors are getting ready to be “first in” when the political situation changes. Panama Canal: This seems pretty obvious now, but someone finally talked me through the inevitable winners and losers from the new Panama Canal being finished in 2014. Old port cities, such as Baltimore, have an opportunity, while others on the west coast...will struggle. Very interesting.

Anyway, that’s all from Colombia. I’m off!