Fortress Investment Group energetic over multiple investments in Jamaica — Wes Edens

BY RACHAEL BENNETT Contributing Editor— Business

Saturday, January 28, 2017

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Wes Edens has an impressive profile. The investment banker turned venture capitalist started Fortress Investment Group in 1998 — a firm which executes a range of investment strategies for more than 160 institutional investors and private clients around the world in private equity, credit, liquid markets and traditional asset management.


Edens proudly notes that the firm started with a little more than US$400 million and 30 employees and now manages about US$72 billion worth of assets and 1200 employees.


Highly respected in his field with a reputation as shrewd but fair, Edens is often talked about in terms of his track record for building, improving and expanding on the businesses he buys, invests in and manages. His broad reach across sport, infrastructural development and economic growth has sometimes garnered Orwellian criticism — with an investigative
New York Times report last summer commenting on [questioning?] the company’s impact on legislation, the consumer and daily life.


Speaking with Edens, his manner is open and friendly. There is no sense of guarded responses being given and nary an inkling of a corporate overlord weaving a tangled web.


Edens’ tale of good old hard work done good is refreshingly honest and inspiring. He started in New York as an investment banker, starting the securities trading desk at Lehman Brothers on the securities trading desk as most essential to shaping his future, eventually rising in the ranks to managing director and partner at before the close.


"I left Lehman Brothers and went to Black Rock. It was a small money management company at the time. That’s where I raised the first fund. We did well and those guys are still friends. After that I decided the next logical step would be to set up my own company."


Edens is candid about what led to the Jamaica Liquefied Natural Gas project, and here sentiment or a love of reggae or culture plays no part.


"Two things we look for as investment attributes in the country: legal framework and regulatory framework.. We think that all the attributes for success exist in Jamaica.


We also look to make sure that we can deliver something of value to the country, [in this case] convert the energy business from burning heavy fuels to natural gas."


Edens discloses that the arrangement between Fortress Investment Group subsidiary New Fortress Energy to supply local energy company the Jamaica Public Service with LNG goes beyond converting the plant — the island’s first— in Bogue, as the intent is to totally lessen the island’s dependence on fossil fuels, hinting at a blueprint for the wider Caribbean.


"Subsequent to the gas terminal we are going to pursue two other projects on the other side of the island in Old Harbour. We will also provide fuel for the Old Harbour power plant with JPS, as well as another initiative not yet publicly available.


"That’s what we like to do, get into the country, make an initial investment and if successful branch out and do other things. In Jamaica there are many different opportunities..."


The New Fortress Energy 20-year supply deal has so far seen the completion of the plant in Bogue, a US$750-million investment shouldered solely by New Fortress Energy with the first shipment of gas arriving in October 2016.


As preparations are being made for building the next plant in Old Harbour, at a cost also borne by Fortress, local legislators and JPS President and CEO Kelly Tomblin have hailed the timely progress as essential to local development and positioning Jamaica as a central hub for processing and trading LNG within the Caribbean region.


Tomblin has been quotedas saying, "The country has been trying to achieve fuel diversity for a long time, and 2016 represents the year that it has really happened, with the introduction of gas, grid-scale solar, and the addition of significant wind capacity to the grid. Natural gas will play a key role in transforming the energy sector,while supporting industrial development and economic growth."


For Fortress, Edens notes doing business in Jamaica has not proved as challenging as naysayers may believe,


"It’s been a different experience for us in a positive sort of way. We have had businesses that operate in Africa the Middle East and other Third World economies. That’s much different than in Jamaica. If you look at proximity to the United States, you share the same attributes that we do, such as significant energy challenges. If you get on a plane to Miami and fly to Jamaica it doesn’t take you very long — what strikes you is the cost and reliability of electricity is very different in Jamaica than in Miami, [that’s the problem we want to] solve in terms of availability and reliability."


Edens also points out that contrary to popular belief, the skill set needed was readily available in Jamaica, and overall he finds economic growth as the primary hindrance to the island’s development.


"There is a highly educated workforce, and whats lacking in certain circumstances is ease of economic growth. Just think of the range of businesses that can take advantage of the workforce.We’ve been very pleased with the quality of people we’ve been interacting with in Jamaica, the JPS people we work closely with in Montego Bay have been phenomenal and management as well."


Edens’ foray into the Jamaican energy sector was not his first visit to the island, as he confesses he is a sports fan, with particular admiration for two of our island greats Lennox Lewis and Usain Bolt, and points out that local jerk is a must-have.


"The food’s great here. I love spicy food and I’m a big track and field and sports fan. I’ve been down here once or twice on vacation before. I had not been to Kingston before though I had been to Montego Bay — so this has been a new experience. I like Kingston, it’s an easy place for us to get in and out of.


Most of my trips are fairly short, a day or two, and I keep busy with the people I’ve dealt with on the project. A lot of people I really respect. Overall it’s been an incredibly supportive process. I think people are very focused on what the outcomes would be."


Hopefully Edens will get some more time to explore as the project progresses as the Montana native express a fondness for the outdoors,


"I grew up a long ways from Jamaica, in Montana on a ranch. I spent the vast majority of my time outdoors, and it shows in a lot of the activities I pursue now as an adult. I used to ride horses competitively, show jumping, mountain climbing. For me as a kid it was the mountains not the oceans."


Fortress’ projects are wide-ranging and span the globe, yet Edens has taken almost 30 trips to the island so far, keeping his eye and a personal touch on this particular project.


"The investment in Jamaica is an important one for me, I think this can be a great model, and it’s still sort of like our first date. There’s only one first. JPS and the Government are very personally invested. And I think it will help to act as a real model in the Caribbean and around the world. By personality I am a builder. I have a real passion for hands on projects. For example, take the Milwaukee Bucks — an NBA basketball team we bought a few years ago — we’re building a new arena as part of that. In Florida we’re building a passenger train from Miami to Orlando. There are a handful of notable and personally invested projects that I do give a bit more energy to."


Edens also notes this dedication isn’t limited to an attraction to the scope and scale of investments; he takes his role as being able to deliver equally as important.


"I like people who get stuff done. Financially, investing is interesting as well but I am definitely attracted to people who have taken an idea and turned it into something tangible or just go do something. It’s easy to criticise other people’s activities and ideas and say it can’t be done. The power plant in Bogue was built and designed in 2003.


"There are not many things that are not possible — even if it seems ambitious, take a plan and make it happen."


Like many successful people, Edens admires the tenacity of other successful investors, perhaps unwittingly indicating the footprint he himself hopes to leave.


"There’s a lot of people I admire: Warren Buffett, whom I’ve met a number of times, and he has a great track record as one of the great financial investors. Elon Musk with Tesla — again it’s very easy for people to criticise what has happened and say it won’t work, but he put his own money in and didn’t take ‘no’ for an answer."


Wes Edens spoke at The Destination Experience seminar in Kingston which ended yesterday.

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