FirstRock Capital Holdings liquidated some of its financial and real estate assets in the past quarter, which puts its arsenal at $1.2 billion of ‘dry powder’ ready to pump into new deals were any to arise.
But for outfits out there looking for backers, CEO Ryan Reid says his company has no intention to hastily go after business leads in an uncertain environment.
“Opportunities that are presented to us would have to be extremely attractive for us to look to redeploy capital in any particular direction,” he said.
As the youngest of the investment and private equity companies listed on the stock market, FirstRock has sought to carve out space for itself by honing in on real estate, both as a backer of other projects and a developer in its own right. Its portfolio, after the disposals, now consists of financial instruments and 18 properties in four countries – four in Jamaica, two in the United States, seven in Costa Rica and five in the Cayman Islands.
In terms of value, a third of the portfolio resides in Jamaica, Reid said.
FirstRock built up a war chest to support its investment strategy, starting with a $2.5 billion private placement in March 2019, then a US$13.8 million initial public offering of shares this year. Reid says all that money is largely invested out, except for a stash of US$4.3 million ready to be deployed into attractive, low-risk deals.
FirstRock, which listed as a start-up in February, is consistently weighing which assets to sell, what to buy, which to hold and which to develop. Its investment properties have grown in value in the past quarter, from US$16 million in June to US$19 million at the end of September, not including the deposits made on properties in the process of being acquired.
“There are real estate assets or instruments that we acquired that we either sold for capital gains or held for unrealised gains,” Reid said, noting that roughly half of the assets in the portfolio were sold. “We’re very active in the management of our balance sheet,” he said.
First Rock Capital Holdings manages the FCH Group, which includes subsidiaries First Rock USA, First Rock Capital Latam, First Rock Cayman and foreign exchange trader or cambio, Dolla Financial. The company ended the quarter with assets of US$35 million, more than double the US$16 million on its books at the end of 2019. Assisted by US$3.4 million in gains from investments, the real estate financier made a profit of US$2.4 million over nine months.
Dolla was acquired in March for US$500,000, just as the pandemic was making its presence felt in Jamaica. But Reid say the company has weathered the rough patch experienced during the April-June economic lockdowns against the coronavirus.
“The good thing is that the industries in which Dolla has its interests have revived somewhat. We see where those in tourism, finance and the BPO sector have largely gone back to work. Delinquencies moved from six per cent to in excess of 16 per cent, and it’s now back into single digit,” Reid said.
Meanwhile, regarding the 12 luxury residences to be developed by FirstRock at Bamboo Avenue, Kingston, Reid says planning approvals are about 90 per cent in hand, with final permits from the Kingston & St Andrew Municipal Corporation still outstanding.
