OUR PHILOSOPHY

Staking our claim.

The great traders of the past took pride in carrying precious cargo safely across oceans.

Tea, silk, salt, wool. Commodities or riches—all brought around the world in elegant clippers. Technology and logistics may have moved on, but some things are eternal.

As an entrepreneur you’ve embarked on a long voyage. Perhaps your business already spans the globe. Or maybe you’re waiting for the right conditions to expand. One thing is certain. Like those traders—who needed advance capital to build their ships—your business could use some liquidity.

Testing the waters
‘Many years ago, learning our trade in the investment banks we started out in, we encountered many smart business people running big companies,’ says Pedro Errazuriz. ’Time after time, they’d tell us they knew they could somehow go further. But they couldn’t raise more capital without giving away control or getting diluted. Yet they knew their enterprise was healthy. Instinctively, they felt there was a way to do more.’

Surely there must be scope to raise more finance against their assets. ‘We saw an opportunity by assessing each asset’s true value in terms of cashflow—not simply as dead weight on a balance-sheet.’

By taking such assets off the balance-sheet and advancing fresh capital to the entrepreneur, Pedro realized, these companies could do more with the same equity. It was a return to banking principles on which the Medici family founded its dynasty in 15th century in Florence.

The freedom to prosper
‘The Medicis knew that prosperity comes from freedom,’ says Edouard Bridel, taking up his partner’s theme. ‘It’s not absolute freedom. It’s about working within constraints.’

The constraints may arise from the company’s distribution chain or from financial regulations. ‘There’s a way for today’s captains of industry to break through the constraints that were holding them back. They need someone who is prepared to go quite deep into the balance-sheet to analyze assets, then risk their own money to deconsolidate them.’

Which is where Ocean comes in.

Pedro expands. ‘Our enterprise, Ocean, helps fund the journey of other enterprises for the long term. When our clients flourish, so do we. And, in fact, so does the wider world.’

The global economy could benefit if more companies funded themselves in this way, instead of overleveraging themselves.

‘For a society to prosper, it needs two things: property rights and the freedom to contract,’ Edouard concludes. ‘Without those two, you have nothing. With them, the world is your oyster.’

It’s a vision that may take another generation to be fulfilled. But it’s one that can benefit companies today.

Discover our product, or find out more about the Ocean team.

The crimes of Enron and Parmalat.

‘Many business owners are surprised to learn how much they can do with their assets. But when they hear about “special purpose vehicles” (SPVs) they think Enron and Parmalat,’ says Edouard Bridel.

‘In any trade and wherever business is done there is a risk of fraud. And these companies abused the system and committed crimes. Sadly, the fraudulent activities of these scandalized firms tarnished the off-balance-sheet
philosophy and asset financing.’