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Thursday, May 30, 2002

Dynamics of making money

 

By Nadine Hosein

A glance will show no sign of local blood, a few words with him will reveal an accent unfamiliar in these parts, but an hour with him will unravel a Trini by nature, heart and vision.

Jelle Sjoerdsma was born in Trinidad to Dutch parents. He left when he was only seven, and thought he was being punished when his father took him out of the sunshine and placed him in the cold, damp, dreary life of England. He vowed to one day return.

"I love the climate and the people, I never felt at home anywhere else, and I plan on retiring here. I never felt at home in Holland," said Sjoerdsma.

A background in sciences was coupled with a love for the arts.

Sjoerdsma is passionate about ballet and modern dance, and dreams of one day running the Queen's Hall, a local performance theatre in St Ann's.

He is also nostalgic about the days he wanted to become a writer and follow in the footsteps of his favourite author Joseph Conrad.

After completing his education in Holland and the US, Sjoerdsma returned to Trinidad in 1994 with his wife of 20 years, to spend the rest of his life.

His return to Trinidad was prompted by two things, his love for the people and the weather and his avid interest in the consultancy opportunities that was offered.

"Trinidad is wide open. Their are a lot of business opportunities than in Europe. The wide range of areas to work in interested me, it is not like Holland where you are forced to specialise in a specific area," said Sjoerdsma.

With his vast education and experience in consulting Sjoerdsma was hired by PricewaterHouse to help set up their corporate financial group, PricewaterhouseCoopers. However, he quickly got bored with the work and decided to explore the flip side of the consulting coin.

After spending five years doing consulting, Sjoerdsma decided to try his hand in what he calls " reverse consulting" which is known as venture capital.

In 1999, with the help of his friend Len Hackshaw decided to form Dynamic Equity, a local venture capital firm that invests in privately owned local firms providing support and advice.

Venture capital is a risk that many are unwilling to take. Companies that do take the chance, never wonder far from their investment, but stick close like a mother eagle protecting her children.

Dynamic Equity's goal is to provide venture capital to local private companies. The firm currently has one company in its portfolio, the Label House Group and is on the prowl for new investments to sink its teeth into.

"We invest in companies as minority shareholders, providing money for their business activities. The price that companies pay us is part ownership, we make money by selling our shares about ten years later to make a profit when the company is more valuable," said Sjoerdsma.

While Sjoerdsma is the founding partner and managing director, the company has six directors in its fold.

As a new company, Dynamic is always faced with the question: Where does the money for these investments come from?

"We made a pitch to a couple of institutions, Guardian Holdings agreed to partner us. This affiliation will give clients a name behind the operation that they can recognise. Also we need to find a partner with deep pockets to aid in the investment process."

The short term goal of the company is to take the fund up to its targeted size of $65 million. The life span of the fund is 10 years and Sjoerdsma hopes to be able to reach the target by that time.

Also the company is on the hunt for new investments. While he is searching and looking at numerous proposals, he is very selective about who is chosen.

"We have to be exclusive in who we consider. We go into these investments with no security, no collateral, no guarantees and depend on risk capital."

Dynamic prefers to make investments from $0.5 million to $10 million and is working toward meeting this goal.
Because the company only makes a profit through capital gains, its main purpose is to maximise the value of companies it invests in.

 

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©2002 Trinidad Publishing Co. LTD.