By Jason Walker
An interview with David Mullings, Chairman and CEO of Blue Mahoe Capital
Chairman and CEO of Blue Mahoe Capital, David Mullings
SOUTH FLORIDA – Blue Mahoe Capital’s founder is no stranger to the Jamaican Diaspora, having served as the first Future Leaders Representative for the USA on the Jamaica Diaspora Advisory Board for almost 3 years, writing a weekly Sunday opinion column in the Jamaica Observer for almost 2 and making an appearance on Bloomberg TV in January 2020 to speak about the performance of the Jamaica Stock Exchange which at the time was ranked as the best performing in the whole world.
Their Regulation CF, launched under the JOBS Act passed by President Obama and Vice President Biden is now live. As a result, any US person can buy shares at US$10 per share with a minimum investment of US$250 at www.IslandForward.com. They intend to eventually complete a direct listing on the NASDAQ so that investors have liquidity and additional regulatory scrutiny that comes with being a publicly-traded company.
However, most people never understood what he has been working on for the last 6 years nor how old the idea actually is. Now, Blue Mahoe Capital, Inc. embarks on something never before done. A US-based company giving retail investors access to the Caribbean.
Q: In the past, I have heard you speak of the importance of BHAGs, Big Hairy Audacious Goals, so what is yours?
David Mullings: In January 2014, the Jamaica Stock Exchange asked me to present at their annual conference and explain how to get Jamaicans in the diaspora to invest back into Jamaica, not just send back more remittances and I laid out the five key criteria that I felt would make anyone from any country be willing to invest back home: Private sector-led and not a government bond because of the trust deficit and past poor management of government-owned companies, regardless of which political party was in power; Run by someone from the diaspora with investment experience and who visited the home country more often than most who had moved away; Partnered with a local and trusted financial institution to avoid the Bernie Madoff, OLINT and Cash Plus problems; Domiciled in the USA, UK or Canada because while the Caribbean court systems are good, it runs on island time and foreign investors demand efficiency; and lastly, open to the person with $100 not just $100,000 so not a hedge fund, venture capital fund or private equity fund. It needed to be a mutual fund, exchange traded fund or a publicly-traded company like Berkshire Hathaway, Warren Buffett’s company.
Q: You were focused on investing capital from the Caribbean in the USA so how did you decide to go the other direction?
Four years after my presentation at the JSE conference, Joe Matalon from ICD Group and I were discussing a deal in the USA and he asked me why I hadn’t launched the venture that I pitched at the conference. I pointed out that it was never about me launching it. I had expected someone in the room, someone local, to launch it. He then said that I was the perfect person to launch it after my experience working for JN Group in Jamaica and working in the USA in private equity. I took a part-time job with a Black-owned hedge fund while commencing work on the idea with help from Joe and his COO Vikram Dhiman, coming up with the company name, structure and investment strategy which was based on Warren Buffett’s approach to investing.
Q: Where did the name Blue Mahoe come from?
The Blue Mahoe is Jamaica’s national tree so it was a nod to the importance of Jamaica in the planned portfolio and my personal journey but not blatant because it was always going to be a company investing across the whole region. It also helped that investing requires a long-term mindset and patience, like planting a seed, watering it and seeing the tree grow from it over years. Lastly, the Blue Mahoe tree is one of the fastest growing hardwoods in the world so our company was going to be fast-growing but sturdy and here for the long-term.
Q: There is no doubt that you paid attention in your marketing classes. What exactly is Blue Mahoe Capital planning to do with the capital raised in this public offering of shares?
I have an MBA with concentrations in Marketing and International Business from the Herbert Business School at the University of Miami so I hope my professors are proud. I am also a Vice President of the Alumni Board of Directors of the university as giving back is core to who I am. In terms of use of funds, we are initially focused on building affordable housing in the Caribbean, starting with Jamaica and Barbados. I believe in sticking to our circle of competence, which is finance so in Jamaica we have partnered with a proven developer who has been building and delivering 2 Bedroom houses in Old Harbour and will be building 1 Bedroom houses for around J$8 Million as starter homes and fairly large lots. We are focused on selling those houses to public sector workers such as teachers, nurses, police officers and those people who have been overlooked by the market there. In Barbados, we are in discussions to provide financing to their H.O.P.E. programe, Home Ownership Providing Energy, which uses solar systems on the roof to cover the cost of the utilities and land so that you get a land title after 10 years and drastically reduces the cost of buying a house.
Q: That sounds like some impactful investments. What has been the reception so far?
We think of ourselves as impact investors and care about the United Nations Sustainable Development Goals. We had raised money into different vehicles so far to build our track record and so we knew what people really wanted to see at scale. Transparency is important and liquidity is also crucial because most retail investors, non-accredited investors, have never invested in a stock before, especially that of a private company. This meant that they could misunderstand the risk of losing all their capital, misunderstand the lack of liquidity or when life happens, they would try to ask for the money back as if it was a bank account. That is not how angel investing works and it made it clear that we had to embark on a financial literacy push to make them better investors. The reception since that has been overwhelmingly positive.
Q: Which industries are you looking at?
We look for strong long-term growth industries and when developing countries are growing, a few key industries see outsized growth. You can look back at India 20 years ago to know where you should be investing in the Caribbean today. We are excited about affordable housing, infrastructure, financial services, energy, consumer packaged goods, Information technology, especially cybersecurity and payments plus intellectual property since culture is our biggest export in the region, especially Jamaica.
Q: Warren Buffet is known as the Oracle of Omaha. Do we call you the Genius of Jamaica?
[Laughs] I don’t know about that one. I did start college at 15 years old and graduate at 19 years old but I don’t think that qualifies me as a genius. I had a great headstart thanks to Jamaican schools and CXC taught me most of what I was exposed to in the first two years of undergrad. That does have a ring to it though so if someone called me that, I guess that I would accept it graciously and try not to let them down.
Q: You have made history. How do you stay so down to earth?
That I definitely owe to my parents, Dr. Anthony and Nurse Dorothy Mullings, my wife Kathryn and my brother Robert, who is actually the President and COO of Blue Mahoe Capital. I was raised well and when you surround yourself with people who love you unconditionally and are willing to speak truth to power regardless of how successful you are, your head can’t swell up. They quickly bring it back to normal size. I love them and my closest friends.
Q: How did you deal with the naysayers?
I’ve worked in the investment world long enough to be used to people who do not understand the world of finance or even specific parts of it, being negative instead of seeking to first understand. Most Black people have unfortunately ignored the JOBS Act but it has also been poorly promoted so there were people who couldn’t understand how I was going to be able to generally solicit and get retail investors to buy shares. Others never knew about direct listings like what Spotify did so they kept focusing on an IPO like Facebook or Amazon. A few even thought I was delusional to think that I could do this but if I could graduate university at 19 years old then why would I think that this wasn’t possible? People didn’t think that was possible then either so I have spent my life proving naysayers wrong and it’s quite fun now. You deal with naysayers by ignoring them and staying focused on your journey.
Q: What’s next for Blue Mahoe Capital?
Our team is focused on breaking ground on the houses in Jamaica while scaling up the funds we intend to launch. Our property fund completed one deal in Miami a few years ago and we need to build a land bank in Jamaica for more affordable housing developments. We need to make some adjustments to move our private equity stakes in two companies in Jamaica unto the balance sheet of this entity, including Sprint Financial Services Limited, a deal that was announced years ago. On the private credit side we intend to expand our relationship with MapEx LLC and help them to provide financing for farming and heavy equipment in the Caribbean so that they can continue to help mechanize farming to improve yields. We have some more plans over the next twelve months but the next major step is the direct listing on NASDAQ once qualified and this offering starts that journey, after which, anyone in the world can buy our stock and get exposure to the Caribbean. Own a piece of Jamaica, Barbados, the Bahamas and Guyana, the Four Caribbean Tigers as I like to call them.
Q: You should be excited. What do you want your legacy to be?
My legacy will be a mix of philanthropy, financial literacy, making people wealthy and inspiring others to persevere despite the odds. Michael Lee-Chin has been integral to my life and my business recipe so I want to be just as integral to the lives of as many people as possible. When I graduated from 5th form at Campion College in 1996, my father asked me what I wanted to be when I grow up and I told him that I wanted to be a positive role model for people around the world and especially young males in Jamaica. I then wrote a fifteen-year plan broken into blocks of five years to start the journey, then a twenty-year plan from age 30 to 50 knowing what I wanted to do after age 50. I am still following that plan and a publicly-traded company was a key piece of the puzzle. Yoda said “Do or do not, there is no try” so I like that as a motto to promote alongside Uncle Ben’s “With great power comes great responsibility.”
Thank you for your time and may the force be with you.
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