Secretariat, if anyone remembers, won the triple crown at the Belmont Race Track on Long Island, located at the nexus of La Guardia, JFK Airports, the Long Island Railroad and multiple major highways. Belmont Race Track is now being rebuilt along with an adjacent UBS hockey arena for the New York Islanders which can be transmogrified into a spectacular concert venue with great acoustics and amazing design for the likes of Harry Styles and Bruce Springsteen who have already played there to packed audiences. Adjacent to the new arena is the new Belmont Park Village filled with luxury brands such as Prada, Zegna, Polo and the like. Do people who watch and bet on horses, attend hockey games and rock concerts, shop the luxury brands? Is this the way entertainment and retail will have to work together now in the age of ZOOM and e-commerce shopping?
Masdar City broke ground in 2008 and was conceived by the Abu Dhabi government to be an international beacon of innovation in sustainable energy and real estate. It was also to be a profitable investment for the government. At first glance, the two goals pulled in opposite directions as conventional wisdom at the time claimed that building sustainably inevitably came at a premium. Over time, with each new project, Masdar learned more on how to balance building sustainably with being profitable. Masdar had financed all of its developments through equity but in 2020 was considering using debt for the first time through a "Green REIT" that was to be made up of a selection of Masdar's own properties. The question was how would this affect Masdar's ability to innovate, complete building the city, and continue to balance sustainability and cost. The case chronicles Masdar's learning journey with each of its major developments from inception to 2020 and provides students an opportunity to understand the thought processes, inner workings, and design approaches that Masdar followed in the pursuit of balancing cost and sustainability. It also allows students to consider different approaches to financing a real estate development and the implications those approaches can have.
The mutual aspiration of addressing the housing shortage and improving real estate market efficiency led Daniel and Phillip to co-found Seso Global in 2017. Seso Global developed a unique integrated platform to streamline and rationalize the process of acquiring and financing a home in Nigeria. In particular, the Seso team aimed to create a blockchain-enabled ledger of land titles to address a key challenge of Nigerian real estate and mortgages market: ensuring rightful ownership of properties. Their platform combined a land registry management and query portal, a property and mortgage marketplace, and a land service provider marketplace. However, VC investors had been grilling them on their business and revenue model. On the other hand, the impact investors they had talked to were focused on whether their activity would have an effect at the bottom of the pyramid. Pondering on the comments made by the VC, Daniel and Phillip were discussing which part of the platform to prioritize. What should be the focus of their business model? Who should be their main clients? Answers to these questions would be key to win over investors and scale up their operations.
Founded by a team of hedge fund and NGO alumni, OpenInvest launched its platform in 2015 to enable retail investors to tailor their portfolio to their personal values in an automated way, for instance by screening out weapon manufacturers stocks or overweighting LGBTQ friendly companies, while still closely tracking the overall stock market performance. Bolstered by $3.25M in seed funding from Andreessen Horowitz, in 2017 OpenInvest was also preparing to launch an app targeted at millennials customers that would include a novel proxy voting feature that allowed clients to vote on shareholder resolutions with a simple swipe. With this technological addition OpenInvest was well on its way towards realizing its mission of democratizing SRI investing, bringing transparency to the financial services market, and enabling retail investors to invest their capital in a way that aligned with their values. However, getting to scale and profitability in the crowded robo-advisors space was a critical challenge. The case closes with the founders contemplating expanding or migrating their model from B2C to B2B in order to achieve scale and profitability faster. The case is an opportunity to discuss the theoretical underpinning of creating impact in public markets, to explore how portfolio performance may be affected by Socially Responsible Investment (SRI) screens; and to understand drivers of demand for impacting investing more broadly. The case also explores the challenges the founders face when aiming to design a new product to meet an emerging need, and which distribution channel to choose for doing so.
This case explores a complex swap transaction implemented by Metro do Porto in 2007. It represents an opportunity to study fixed income derivative instruments, such as plain-vanilla swaps and structured swaps, as well as understand the opportunities and challenges of using innovative financial instruments. The public sector setting allows to discuss the political economy implications of such transactions.
Describes how Deutsche Bank, a leading bank in Europe, is deciding whether or not to launch a new structured retail product in Germany: an auto callable note. Will this product find a market and how does it fit into the bank's product portfolio? The case investigates how Deutsche Bank manufactures and distributes its structured retail products, and more broadly explores the opportunities and challenges of offering financial products to households. The case also dwells on the scale and scope of business of retail banking in an increasingly regulated environment.
Matrix Capital Management, a long-short equity hedge fund based in Waltham, Massachusetts, is assessing its investment in Tableau, a data visualization company. Tableau, which conducted an IPO a few years ago, has been experiencing substantial growth as it aims at disrupting the business intelligence software market. Matrix's investment management team is attracted by two key features of the tech company: the large addressable market and the potential to emerge as a leader in this market. However, after hitting an all-time high in the first quarter of 2015, Tableau's share price began trading down, and by September of that year the stock was trading down year-to-date. Matrix's management team wonders whether the recent market volatility presents an opportunity to add to their existing long position. This case highlights a variety of methodologies to valuate a high-growth company in the tech sector and illustrates the challenge of living up to high market expectations.