• RF chief: 2023 set to be ‘busiest year for a while’

• Multiple firms seek $3m-$5m ‘expansion capital’

• Getting investors ‘out bank’ to boost economy

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian investment bank yesterday disclosed it has $150m worth of transactions in “the pipeline” for 2023 amid “growing momentum” within the private sector to raise much-needed capital.

Michael Anderson, RF Bank & Trust’s president, predicted to Tribune Business it will be “our busiest year for a while” following three COVID-impacted years that have seen multiple equity and debt offerings slide due to the uncertainty created by the pandemic.

Disclosing that the $150m figure involves five separate deals, he suggested this could rise even higher if other transactions - including a possible $50m-$60m raise - come to market within the next 12 months.

The RF Bank & Trust chief added that, besides these more prominent deals, there were a number of companies seeking to raise smaller sums within the $3m-$5m range as “expansion capital” to either reboot their existing business or acquire other firms.

And, should all these deals hit the market as forecast, Mr Anderson said it will give Bahamian institutional and retail investors a chance to diversify their portfolios and earn higher returns following a three-year period when they have been starved of such opportunities.

Moving investors “out of the banks”, and minimal to non-existent deposit returns, into investments that boost the productive sector will also spark the growth and job creation needed to further haul the Bahamian economy away from 2020’s COVID-induced crash, he added.

“It’s very positive in terms of potential and people looking for capital. I think we’ll get more activity than last year,” Mr Anderson told Tribune Business. “I expect it to be our busiest year for a while. We do have a pipeline of transactions currently in the range of about $150m for 2023 from about five projects.

“We had a very slow period coming through COVID. A number of transactions were looked at during that period but were put on hold. Even though COVID ended in the middle of last year, people did not get themselves ready before the end of the year. We expect people to get a lot of those transactions ready this year. They did not get enough momentum behind them to get over the finish line last year.”

It is understood that potential capital raisings by the likes of Doctors Hospital and the Grand Bahama Shipyard, which had been expected to come to fruition in 2022, could materialise in 2023 although Mr Anderson did not identify any companies by name or who was included among the $150m.

He did, though, say that he expects to see multiple capital raisings “come to market in the first six months of this year, and even if we do not get them done then they will be completed by the third quarter”. And, if all goes to plan, further deals may follow.

“There’s some other transactions we’d like to see happen as well, but they’ve not reached the stage where we’ve been engaged on them,” Mr Anderson disclosed. “There’s one large one that could end up being in the $50m-$60m range, which would be a nice transaction. Some of them do fall away, though, so $150m is a pretty good number.

“There are also a number of smaller projects that we’re working on in the region of $3m to $5m that we expect to also get done. There’s more projects in that range than we’ve seen for a while. Those will be the smaller local companies looking to raise capital to restock their business or acquire more businesses.

“That’s the need for private equity or debt, but more the expansion capital we’d been expecting as people came out of COVID. There’s a certain momentum building in the economy at the moment in terms of people needing capital. For the last three years we’ve had a slow period in terms of new transactions so it would be nice to see more activity.”

Such activity will also create more opportunities for Bahamian investors to better diversify their portfolios and earn higher returns, Mr Anderson added. “There’s not been that opportunity for the last three years,” he said, “so this creates a way for investors in 2023 to diversify their investments and generate greater returns.”

Citing RF Bank & Trust’s Prime Income Fund as an example, Mr Anderson said investor returns had dropped from their traditional 4.5 percent per annum to around 3 percent simply because the investment fund was sitting on a “excess cash pile” it had no opportunity to invest.

“We see a huge opportunity to get money invested this year in these things than we’ve had for quite a while. As these investment opportunities get realised, we will have the chance to improve the returns for our funds,” the RF Bank & Trust chief added. “A lot of our clients are sitting on excess cash, and a lot of people who are not clients will be looking for investment opportunities.

“We see a lot of opportunity to move people out of the banks and get them into investment opportunities. It’s all about growing the economy, and if we put money to work it grows the economy and creates employment opportunities. From a country perspective, hopefully it will make a big difference in terms of growth opportunities.”