Trends Watch: Smart Cities

March 03, 2022

By Elana Margulies-Snyderman 

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Simon Tobelem, CEO, ARIE Capital Group and ARIE Finance.

What is your outlook for alternative investments? 

The alternative investment markets have definitely started to mature, and as such I see them taking a more selective path in the near future. The last couple of years have seen a huge amount of liquidity in the market which has fueled an inflation in fund sizes, round sizes, and valuations. That has made for some impressive headlines as bigger funds were able to place enormous amounts of money in later rounds and create unicorns in record time, but it also left a lot of people behind and actually made the market more exclusive than inclusive. I foresee the whole chain of value returning to the kinds of norms that we saw a few years ago, where the market will be skewed back towards earlier-stage deals and emerging companies. It may not produce the spectacular headlines of the last couple of years, but I believe it will create a more equitable and ultimately healthier market than we’ve seen recently.

What are the greatest opportunities you see and why? 

In the short-term, FinTech still stands out as an area of huge growth opportunity due to the acceleration of global digitization that we’ve seen in recent years, exacerbated by the pandemic. Practically every digital business encourages some kind of transactional outcome, which means that FinTech has almost limitless scalability.

In the longer-term, I’m extremely excited about the prospect of smart cities becoming a reality. The continued push to go digital, particularly with the widespread adoption of remote work, necessitates greater flexibility and connectivity in every aspect of our daily lives. Smart cities are the perfect solution to the changing lifestyles that will become standard over the next few years.

What are the greatest challenges you face and why? 

For international businesses like ARIE Finance, regulatory barriers still pose an enormous challenge. In a digital world where you would expect everything to be increasingly frictionless and global-facing, we’ve actually seen regulatory bodies either putting up additional barriers for conducting cross-border business or simply creating an atmosphere of uncertainty through indecision. The pandemic felt like it should have been a watershed moment where many of these barriers came down, but, if anything, it feels like many countries became increasingly insular in their outlook with regards to regulation. We are not anti-regulation by any means. In fact, in many instances, we welcome it. But that regulation needs to help us do business rather than hinder us, and the challenge will be for us to work with regulators to create a better global business environment. We’ll get there!

What keeps you up at night?

Aside from the occasional bout of jetlag, the only thing that keeps me up at night is the health and happiness of my family. Business is always a rollercoaster – that has never changed and I doubt it ever will. The last couple of years have taught us that particularly well. The only thing that is certain is uncertainty, and businesspeople like me have to accept that as an integral part of what we do. I’m at a stage in my life and career where I’ve become comfortable with that reality. Lying awake at night and worrying about money has never made me a single dollar.

 

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.

About Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.