Brave New World Investments AB (BNWI), a Swedish investment company startup this month introduced plans to generate returns by performing equity investments in Iran and the Middle East, using funds provided by shareholders through bitcoin.
BNWI operates at the intersection of traditional finance and digital finance – traditional in that it invests in equities and digital in that it keeps most of its liquid assets on cryptocurrency blockchains.
Mikael Johansson, co-founder & Executive Board Member of BNWI released the following message on the newly launched company website:
Founded in early 2017 in Linköping, Sweden. Brave New World Investments’ inception was an interesting one as we believe it was the first company in history to be supplied initial funding entirely in digital cryptocurrency instead of fiat currency due to not being able to start a bank account. Bank account acquisition was prevented by the Swedish banks due to fears surrounding the way their US operations would be affected by the US-Iran financial sanctions if the bank allowed Swedish-Iranian business.
Except for a few asset freezes, there are no relevant sanctions in Sweden or in the European Union obstructing Swedish-Iranian business in that manner. We almost religiously follow anti-money laundry directives, CFT directives and asset freeze list set by the relevant institutions of Sweden and the European Union. Due to the current US sanctions, the company will not have US operations nor US investors for an indefinite future.
- We are an investment company – not a broker. We only have investors – no clients.
- What we are looking for is one or a few angel investors. We do not have a public offering.
- We are not performing an ICO.
- We are just starting up, so we have not performed any investments in Iran at all.
BNWI will focus on equity investments and has two overall investment strategies:
1) Persian Dawn and 2) Ugly Ideas.
Below elaborates more on each strategy.
The Middle East is a region of the world that poses high risks and high rewards. Parts of the region is going through a great economic and technological transformation. The founders Mairtin O’Duinnin and Mikael Johansson have spent quite extensive periods of their professional life in the Middle East, consulting local banks in workflows, financial technology, and Islamic finance. They bear the first-hand witness to some of the vast wealth that the region possesses as well as the opportunities arising from the economic, social and technological disruption that is happening as we speak.
The greatest opportunity in the Middle East region by far is post-sanction Iran. As sanctions are being dismantled, an industry in dire need of investments will quickly be brought up to par with international standards. Information technology penetration is currently low in the country and is expected to boom in the coming years. The energy sector is already booming and is soon back to pre-sanction production levels.
A few US financial sanctions are still active that are effectively excluding large parts of the country’s financial industry from the international financial industry. Despite that, the country is on the doorstep of a payment revolution along with the coming technological advances.
There are also asset management technical reasons for investing in Iran. The Teheran Stock Exchange is at large undervalued with an average price-earnings ratio of 7 (2016 figures). Furthermore, the exchange has historically no correlation with any major indices. Last, but not least, Iran has no capital gains tax and no tax on interest received.
This strategy focuses on long equity investment opportunities exclusively in the Islamic Republic of Iran with an industry bias on the finance and technology industries.
Time and time again, markets overreact. This investment approach involves looking for the ugly ideas – good ideas posing as bad ideas – in the global financial markets. This is a highly concentrated strategy, so when such an idea is found and is after analysis deemed compelling enough, a large position is taken, relative to the overall size of the funds available for investment.
The expectation with this strategy is that market over-reactions will be corrected over the time as the market tends to be irrational in the short term but more rational/efficient over longer periods. Profit can thus be taken as the price of the security returns to a more “normal” valuation. The strategy has a global scope.