A Q&A with Sidhesh Kaul, Chief Executive Officer, JIMCO.
The Jameel Family have been actively investing in emerging ideas and businesses for almost five decades, from Atari in the early 1980s to mobility innovators RIVIAN and Joby Aviation more recently. The Family’s non-operations investment activities have been consolidated into a new, dedicated investment brand: Abdul Latif Jameel Investment Management Company, or JIMCO.
JIMCO is separate from both the Abdul Latif Jameel commercial business operations and the Jameel philanthropies, which include Bab Rizq Jameel, Community Jameel Saudi, Art Jameel and Community Jameel. It comprises three different funds: Life Sciences, Technology and the Strategic Asset funds, with a global reach from the Americas to Asia Pacific. Together, these invest in innovation, early-stage ventures and emerging technologies, with the aim of advancing the future of core industries, driving the global economy and contributing towards a more inclusive society.
Q: What is the background to JIMCO?
JIMCO is the newest element of the Jameel Family’s investment activities. It embodies their overall investment thinking and their approach. It’s a formalized representation of what they have been doing for at least the last 35 years. The relationship with Toyota has always been the centerpiece of the business, and continues to be so, but as the business has grown, so has the need, the impulse and the commitment to diversify into other areas. The Family is enormously excited by the ability to reach out and do good in whatever they are doing, whatever it is, whatever communities they can touch.
It’s not like they just woke up last week and decided to break into technology or life sciences. They have been investing in these areas for many years already, it just wasn’t formalized under a single brand umbrella in the way that JIMCO is.
Q: Was the establishment of JIMCO a recognition that the Family’s investment interests were becoming more complex?
Yes, I think that’s probably correct. The ambient environment, the economic context and the stage the Family is at have all contributed to the need to develop a strategy to move the center of gravity from something that was relevant in the 20th Century, to something which is far more relevant in the 21st and possibly even the 22nd. It is also an attempt to create a structure that provides a little more flex to family capital as it adapts to new impetuses in the marketplace, along with a broader, more diverse risk base.
The new approach is more focused. It’s more future-looking. It is more directed at creating wealth while also doing good, driven by certain higher goals, not just profit.
Q: Is it the latest example of Jameel Family looking ahead and trying to prepare for the future?
Absolutely. Our late Founder, Abdul Latif Jameel, himself started off in the 1940s as an owner of a small filling station and trading business in Saudi Arabia, at a time when hardly anybody owned a motor car and there were barely any roads! I’m sure that many of his peers thought he was extending his reach beyond reason. But he could visualize what the future held and, by anticipating that change – had the courage to participate actively in it – he was able to build a hugely successful business and contribute to the growth of his community.
He believes that science and innovation change things for the good. For example, he saw that the fossil-fuel economy was not sustainable and that the game was changing. He took a risk by investing in RIVIAN, an electric vehicle start-up set up by a MIT graduate in his mid-30s, right at the very beginning of its journey.
That investment has proved to be incredibly shrewd. The recent IPO saw Wall Street values of over US$ 70 billion which increased to over US$ 98 billion – a similar level as Ford and General Motors.
Today, JIMCO is building on that momentum. We are investing in technology; we are investing in innovation. We are partnering with MIT, Imperial College London and many other universities, some of the best centers of R&D in the fields of technology, healthcare, and life sciences, and we are exercising the innate power of ‘patient’ private capital in a way that can benefit society and the planet.
Q: What is your background and what attracted you to Abdul Latif Jameel in the first place?
I was working in South-East Asia for a major global corporation. I didn’t know much about Abdul Latif Jameel, but when I looked into it and I came over and met the leadership team, I was blown away by the passion and the vision. There was a clear sense of purpose – a wider purpose beyond business and profits – and an unassailable belief that they could achieve that purpose. I found that very inspiring and refreshing and obviously was attracted.
I initially joined to work on a specific project for two or three years, but it’s now 17 years and I’m still here. I worked my way up to VP Finance and Legal at Abdul Latif Jameel before joining JIMCO as CEO when it was established and retaining the title of VP Investments for Abdul Latif Jameel.
Q: What was it about this change of role that excited you?
The creation of JIMCO is all about impact. It’s about the ability to tackle some of the challenges that we face as a society, and globally, which come in all shapes and sizes. We are constantly searching for and, researching, new technologies and innovations on the cusp of current human knowledge. And the more you get into it, the more you’re in awe at how little you know. It’s very exciting.
I’ve spent most of my career to date in finance, so first and foremost JIMCO was an opportunity for change. I get to do something new. After 17 years with Abdul Latif Jameel, I was excited by the prospect of contributing very directly to the future of the group, helping to create a future where we can both generate wealth and do good for society. Even relatively small investments, when viewed together, can make a big difference. And that’s very satisfying to see.
Q: How do the three venture and innovation funds (Life Sciences, Technology and Strategic Asset) help you achieve your vision for JIMCO?
The Strategic Asset Fund is our ‘investment 101’ exercise. It operates within a framework of risk that is acceptable to the shareholders and looks for the best returns in that framework, aligned with the defined investment priorities. It is the anchor, the solid foundation that aims to provide a steady, stable rate of return.
The Life Sciences Fund and the Technology Fund operate with their own risk frameworks and allow us to explore opportunities in two of the areas that are closest to the interests of our shareholders; two areas that are central to the sustainability of our society and where the potential to make a tangible difference to people’s live is enormous.
Q: Are there any areas of investment that sit outside these funds?
At the moment, all our investing is covered by these three funds, but you can never say never, because the investment map keeps changing. We don’t want to limit ourselves with arbitrary boundaries. We are only bound by our own risk appetite and the level of capital we are comfortable investing.
Ten years ago, electric batteries were for golf buggies and forklifts. Now you can drive a luxury car for 500 miles on an electric battery. In a few years it will be 1,000 miles. Technology changes so quickly, we would be foolish to rule anything out. Our aim is to remain vigilant open to new areas of opportunity; new areas where private investment can seek to change tomorrow’s world for the better.
Q: How do you research and validate potential investment targets?
We have a research team that spends all its time doing just that, talking to smart people, innovators, creators every day. We don’t pass judgement on anybody, because we recognize that the scientific universe is much larger than we are, and in truth, we know very little. Nobody has a monopoly on good ideas. They come from anywhere; from a big science laboratory at MIT, or from a farmer in the upper reaches of Pokhara in Nepal. It’s up to us to have the right radar to find these opportunities wherever they arise. The best thing to do is to sit down and listen, try to understand what the opportunity is, what the innovation is, the problem or issue it is addressing and hence the real-world the impact it could have on humanity, but also with one eye commercialization, always. Quite simply, commercialization means sustainability.
Q: How has the COVID-19 pandemic affected JIMCO?
When the pandemic first struck, the bulk of our activity was in the Strategic Asset Fund. It did have an impact because the Fund was affected by external factors, like interest rates, the bond market, equities market, real estate prices, and so on. But despite the temptation to panic and react to the immediate situation, we largely struck to our strategy, with only some minor adjustments and have thankfully come through it in good shape.
The pandemic also helped us realize the value of JIMCO. From a strategic perspective, it showed that you can’t afford to put all your eggs in one basket, while from an investment perspective, it highlighted the huge value and opportunities in the sectors we are most interested in, in terms of life sciences and technology. Of course, performance will be and up and down, particularly in the short term. And the time to fruition is much longer than you see in a strategic fund. But in the long run, we are confident we are heading in a good direction.
Q: What are your ambitions for JIMCO over the next few years?
As the CEO of JIMCO, I’m looking to build a team that is world-class. We are not quite there yet. We need to cover a few blind spots with the right people. And we’d like to do it at pace. We have been conservative in our growth so far, thoughtful and considerate of where we can make a real difference. I’d like to speed things up a bit, because opportunities are not going to wait for us.
Today the environment is bubbling with opportunities. We may not be a large bird, but we are already in the air to spot the prey and go for the kill, very quickly. So, we’re trying to beef up the team, for example, in the general technology venture capital area.
Small, very compact teams that can work with entrepreneurs and identify exciting new opportunities, like we did with RIVIAN.
We are also trying to bring in the right non-executive board to advise us and critique us on our approach so we can improve. So, our shareholders can see their capital is being deployed appropriately in the areas they want to invest in. There are a lot of challenges ahead, and I look forward to tackling them.
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