Building Doors Where There Were Only Walls With “Three-Dimensional Capital”

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NEW YORK, N.Y. — From Berlin to Robben Island, where Nelson Mandela was kept in a prison cell, Hendrik Jordaan, president and CEO of One Thousand & One Voices, sees walls that have affected world history. For him, people in emerging economies are facing similar, seemingly insurmountable walls.

Having first worked in the private equity and mergers and acquisitions industry for more than 16 years, Jordaan built a team of talented people to found One Thousand & One Voices, which was launched during the 2013 World Economic Forum on Africa. The organization aims to accelerate prosperity in emerging markets and achieve adequate returns for the wealthy families investing in them. It is something Jordaan likens to a movement.

At TBLI CONFERENCE USA 2014, his walls analogy resounded with the many attendants, as they, like Jordaan, see philanthropy as one of these walls. Philanthropists typically have good intentions, but instead of making people independent, they tend to make them more dependent.

“Philanthropy is about helping others where free markets don’t operate,” says Jordaan. But it is ultimately not about creating jobs. The typical private equity model also has noble purposes but is similarly facing obstructive walls.

Jordaan sees three kinds of walls, in both cases:

The Time Wall. Liquidity is important for many investors. The typical private equity model encourages short-term liquidity. But in many emerging markets, holding an asset for only a few years is not optimal. It does not make for great returns, and it does not provide much impact. Investments should be made with the idea of long-term value creation.

The Relationship Wall. Investors are often silent and not involved with limited partners. Companies should try to foster relationships among industry leaders, including limited partners.

The Intellect Wall. Companies and entrepreneurs need insights, skills and access to best practices. Many influential families that are versed in investing their private funds have intellectual capital and insights that could be highly creative if shared.

One Thousand & One Voices wants to transform the private equity model. The typical model is based on financial returns and short-term prospects. One Thousand & One Voices’ approach is called Three-Dimensional Capital and is based on three tenets: relational, intellectual and patient financial capital. This strategy aims to build doors where there used to be only walls.

“When you think of doors, you think of passageways, you think of doors opening to new horizons, new opportunities, to new ideas,“ says Jordaan. When wealthy families were willing to invest their private capital in emerging countries, they used to face many walls and only few doors. Those walls were preventing families from making a sustainable impact.

Featured image source: Geraint Rowland/Flickr under Creative Commons.

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