Why should one invest in mutual funds?

Wealthy people have their wealth in form which offers them returns. The forms in which wealthy people park their money is real estate, bonds, debentures, mutual fund units, shares and stock along with others.

Take the example of shares which are in fact part ownership of corporations. If you invest in shares of a corporation you in fact own part of it thus taking part in its future profits and losses.

If you invest shares of Cement Company, you expose yourself to risks affecting the cement industry negatively. Moreover, there are some factors that can affect your company specifically like bad management, technological obsolescence and others.

In order to reduce company specific risk exposure, you need to invest in a number of companies. Likewise, if you want to reduce risk exposure to a certain industry you need to invest in different industries.

The more variety of shares you purchase the less risk exposure you will have. Reducing your exposure to risk by way of investing in multiple securities is called diversification.

Diversification when rightly implemented can reduce your risk exposure. But there are costs associated with buying number of different securities e.g. cost of ordering, accounting, etc. In order to get full benefit of diversification you need to invest a large amount in different securities. An individual has limited amount of capital and cannot diversify, which keeps him away from investing.

The problem of small capital can only be overcome by pooling of funds by different interested individuals. But how to pool funds and also the issue who would manage the funds on behalf of investors arises.

The answer to all these questions can be overcome by utilizing a vehicle called mutual fund.

Mutual funds are pool of funds managed by fund manager for the benefit of isolated investors, who don’t have expertise in the investment field.

When you invest through mutual funds, you benefit from the expert management. The analysts working for the mutual fund industry generates financial models which grows your capital as well as provides protection to your capital.

With Mutual fund investing you also get benefit from diversification, and economies of scale.

The one thing anyone interested in investing through mutual funds should keep in mind that the return from mutual fund is dependent not only on the financial markets performance but also the overall economic performance.

So start investing with good mutual fund manager and select the mutual fund after due diligence.

Disclosure: any thing/ content isn’t substitute of professional advice and the blogging team isn’t responsible for any loss/ damage resulting from acting on information from this blog.

Pakistani people in private equity industry.

Private equity represents a class of investors, their funds, and their subsequent investments, which are made in private companies or public companies with the goal of taking them private.

Below are some notable Pakistani people from private equity industry around the globe.

1.      Riaz Siddiqi is a Founder and Managing Partner of Denham Capital, a private equity firm that manages over 4 billion dollars and invests in the commodity and energy sectors globally.

2.      Faysal Sohail is a venture capitalist and has served as a General Partner at CMEA Capital since 2002. 

3.      Wahid Hamid is a Senior Partner at Abraaj Capital and Head of Portfolio Management and Operations Group.

4.      Dr. Moeen Qureshi - Chairman of EMP Global, a multi-billion private equity fund; Former Prime Minister of Pakistan; Former CFO of World Bank

5.      Arif Naqvi is founder Abraaj Capital, a leading private equity firm that invests in Middle East and North Africa.

6.      Aamer A. Sarfraz is founder of Indus Basin Holding, a developer of agribusiness projects in Pakistan.

7.      James Caan is also the founder and currently CEO of the UK-based private equity firm Hamilton Bradshaw

8.      asad zain Founding Member at Manara Equity Partners

9.      Abdul Hafeez Sheikh, General Partner New Silk Route Partners (a private equity firm that invests in Asia and middle east)

10.  Sardar Sherazam Mazari. In May 2009, he established Rojhan Capital as Managing Partner, which is an investment and management company focused on Pakistan.

11. Asad Jamal of ePlanet Capital is global venture pioneer. He has offices in Asia, Europe, U.S. he led investments in many hi-tech firms including Baidu ( China’s google), HiSoft (information technology and business process outsourcing company headquartered in China), median technologies (cancer detection company based in France), SiliconFile Technologies(chips for cell phones and cameras, South Korea) 

Related Link
asad jamal
moheen qureshi
arif naqvi
indus basin holding
sardar sherazam mazari

Pakistan has one of the largest diasporas of the world.

The population of Pakistani Diaspora is more than the population of many countries. There are approximately 7 million people living overseas.

These people include world class professionals. Many doctors, engineers, business managers, etc. are working in different countries. Pakistan has world’s best doctors. They are serving in almost all countries of the world.

Pakistan has some best centers of higher education although they are few in numbers. These institutes include Ghulam Ishaq Khan Institute of science and technology, NUST, NED, IBA, LUMS, etc.

Expatriates serving in United States, United Kingdom are entrepreneurs, executives and other successful professional while those serving in Middle East are generally laborers. Rich expatriates are living overseas with their families while those less affluent are living alone. Pakistan receives enormous remittances especially from Middle East countries as expatriates from these countries send money to their families. Middle Eastern countries do not allow naturalization.

In European countries and in United States, it is estimated that half of Pakistanis have received their nationality. There are second and third generations of Pakistanis living there. These Pakistanis have learned a lot about foreign cultures and are increasingly intermingling with the local people from those countries.

Pakistan can export more man power to Middle Eastern countries as well as other countries facing shortage of manpower. There are many countries whose work force is shrinking owing to ageing of their population like Italy, Australia etc. and Pakistanis can benefit from opportunities in those countries. Although Pakistanis have to face stiff competition from china and India as both have huge population and have good standard of education. The increasing competition can only be faced by increasing the higher education spending as well as excess of higher education to more people.

 related links.

wikipedia

Saltflow, Inc.

Saltflow, inc. is a conglomerate and has stakes in diverse fields. Saltflow was founded in 2005 by Arif Ayub, a Pakistani national. This group is based in Dubai, UAE.

Saltflow has annual revenues in excess of $570 million annually. Group is involved in a number of fields including construction industry, trade and retail industry, and technology industry. Group has expanded its presence to North America through acquisitions.

Group’s technology business is heavily centered in Russia and controls internet companies primarily targeted at mobile and financials solutions for consumers.

In North America group has stakes in retail and trade sector. Group has invested huge amounts in retail brands and is expecting good returns.

Group also has stakes in construction industry.

Presently group provides employment to more than 500 people.

related link 

Saltflow, Inc.

Tariq Farid, Pakistani American entrepreneur

Tariq Farid is a Pakistani born American. He started his entrepreneurial career at an early age, by successfully managing flower shops. His latest started venture is Farid Capital Corporation that helps franchises buying equipment. Farid is a serial entrepreneur. Besides starting Farid Capital Corporation he is also operating an international franchise business by the name edible arrangements. Edible arrangements was started by Tariq along with his brother in 1999. His edible arrangements boasted revenues of 195million us dollars in 2008, and owns 883 franchises internationally.

His other entrepreneurial ventures are related to software. He created Netsolace, which is a software company and specializes in providing software to franchise industry.

Farid attribute his success to his business philosophy. According to him his success has come from paying attention to often overlooked details such as website, order tracking and follow-up customer service, the logo and branding, and employee training.

Farid has been recognized as an entrepreneur of the year by international franchise association in 2009.

related link 

wikipedia

tariq farid

ENTREPRENEURSHIP AND BENEFITS TO SOCIETY

Sadruddin Hashwani is a Pakistani billionaire. According to information available on the internet he has a net worth of 1 billion us dollars. He owns many five star hotels including world famous Marriott hotel Islamabad. He also owns stakes in many other businesses. He provides services to many people by offering staying facilities to many delegations foreign as well as domestic. His businesses also include oil and gas exploration and Production Company. He provides employment to many people directly and indirectly.

There are many other businessmen who provide employment to many people. Many overseas Pakistanis also have invested heavily in Pakistan like Sir Anwer Perwaiz. His Bestway group has invested in banking and cement manufacturing sector. His businesses also employees many people. Along with providing employment, his business produces products that are exported to many other countries. Cement manufactured by his plant is exported in huge quantity to Malaysia earning heavy foreign exchange.

Alsher Fiyaz is another expatriate Pakistani who is the founder of alfi investment and his company has stakes in shipping and retailing industry. His brother Javed Fiyaz is involved in many charity projects in Pakistan. Fiyaz family has an estimated net worth of 3 billion pounds.

Entrepreneurs generate opportunities for employment and earning foreign exchange. They produce goods and services for consumption inside and outside our country. So in regard to these services they should be respected by community and Government should facilitate entrepreneurs, as entrepreneurship is engine to economic growth.

Pakistanis in retail and wholesale sector worldwide

Pakistan is 6^th most populous country in the world. This country is having huge growing middle class. Size of retail and wholesale market is above 40 billion us dollars per annum. To benefit from this huge sector many international retail and wholesale companies have moved in Pakistan. Metro cash and carry, makro, hyperstar etc. are some names that are active in Pakistan’s retail and wholesale sector. 

Although Pakistan has huge retail sector, but still Pakistan has not produced any international chain of supermarkets. The size of majority of retailers is small and competition among them is tough. Retail sector contribute very little to state exchequer despite having a large share in GDP. Total contribution to state exchequer is approximately 125 million rupees while 50 million is contributed by canteen store department, chain of retail outlets managed by defense ministry.
Pakistan has huge diaspora. nearly 7 million Pakistanis are living in different countries of the world. there are nearly 1 million Pakistanis in united states. In United Kingdom nearly .7 million Pakistanis are living.

Many Pakistani businessmen abroad are involved in retail and wholesale business. This is because Retail business doesn’t needs a person to have any experience or specified level of education. Many Pakistani owns convenience stores abroad. The US convenience store market is monopolized by Pakistanis and Indians. In United Kingdom many Pakistanis are active in retail and wholesale sector. E.g. Pak supermarket is owned by Khalid Hussain. United wholesale grocer was owned by Muhammad Sarwar and his brother Muhammad Ramzan. Sir Anwer Pervaiz owns Bestway cash and carry. Najib Khan owns food retailing business in United Kingdom. Syed Qamar Reza owns 12 outlet of retail24 in United Kingdom.

Pakistanis are not only active in retail sector of USA and UK but also Middle Eastern countries. Abdul Razzaq Yaqoob owns chain of jewelry outlets. He also has started ARY cash and carry.

industries produced Pakistani billionaires

According to Forbes technology is the sector that has produced highest number of billionaire in United States after investment. The leading sector in the rest of the world according to Forbes is investment while fashion and retail ranks second.

GlobalTop 10 Industries Producing Forbes Billionaires

1. Investments: 143
2. Fashion & Retail: 123
3. Real Estate: 102
4. Diversified: 97
5. Technology: 90
6.  Manufacturing: 85
7. Energy: 78
8. Finance: 77
9. Food & Beverage: 69
10. Media: 64

Pakistan has a list of rupee billionaires, although completeness and correctness of this list is doubted. Although it is difficult to know which sector produced how many billionaires in Pakistan. But it can be seen from the list that majority of Pakistani billionaires come from diversified, textile and fashion, investment, landholdings, overseas business and media.

Big business houses in Pakistan used to invest in diversified sectors to manage risk.

Pakistan has huge textile and fashion industry and is growing at a high rate. Many fashion designers have started doing business on a global scale. Names like Maria b. Hassan Shehryar Yasin etc are having retail outlet around the world and their clients include many rich and famous people including family members of royal families. Fashion retail outlet like Chenone is having its retail outlets in different cities of the world.

Pakistani stock exchange is best performing stock exchange in the world. It has generated good returns for investors. Many international investors are also investing in Pakistan’s stock exchange. Pakistan has many mutual funds which provide opportunity to household investors to invest in stock exchange.

Pakistan has large land holdings since the colonial era and families manage to keep these large land holdings in their own families through inter-cousin marriages.

Many Pakistani billionaires have got their massive wealth from overseas business and investment in other countries. Sir Anwer Perwaiz is one such billionaire who got his wealth by establishing bestway group in UK.

Media is another such area where Pakistani billionaires have stakes. Jang group owned by Mir family is well known to have earned their wealth from their media business. Electronic media is a recent entry in this field As Pakistani government started issuing licenses to private television channels.

Pakistani American on forbes list

Forbes has issued list of billionaires 2014. According to Forbes there are 1645 billionaires in the world. This is the all time high number of billionaires according to the Forbes magazine. the total aggregate wealth of these billionaires is 6.4 trillion us dollars.
Shahid khan, the Pakistani born american billionaires has been estimated to be worth 4.1 billion dollars.  He has been ranked 367th richest person in the world. Shahid Khan is the owner of Flex-N-Gate, an automobile parts manufacturer. He is also the owner of Jacksonville jaguars of the National Football League. in july 2013, he acquired premier league football club Fulham for estimated 300 million us dollars. His name has also been mentioned in rich list Pakistani expatriate.

Shahid Khan was born in Lahore, Pakistan. He went to United States at the age of sixteen for studying. He has Bsc in mechanical and industrial engineering.
His company Flex-N-Gate has 12450 employees and 48 manufacturing plant. In year 2011 Flex-N-Gate has 3 billion us dollars in revenue.

Shahid Khan is married with Ann Khan and has two children Shan Khan and Tony Khan.

Related links.
Shahid Khan forbes list
Shahid Khan Wikipedia