Establishing three successful companies, Sygnus Credit Investments (SCI), Sygnus Real Estate Finance (SRF) and Sygnus Deneb Investments (SDI), the group has its eyes fixed on becoming “the leading alternative investment firm in the Caribbean and Latin America.

An investment firm that began as a discussion over drinks with friends evolved into three separate pillars covering investments, real estate, and private equity. When Berisford Grey, president and chief executive officer; Dr Ike Johnson, executive vice-president and chief operating officer; and Jason Morris, executive vice-president and chief investment officer — all reputable banking experts — noticed there was a financing gap in the market, they began the planning phase on how to fill it.

“Accessibility to financing by medium-size firms was very limited. Based on our research, most of the loanable funds that were available in the market were readily accessible by the large firms,” revealed Grey in an exclusive interview with the Jamaica Observer while taking us back to the beginning of Sygnus.

He explained that based on research during that time medium-size firms had probably 27 per cent accessibility — a challenge that was not unique to Jamaica and also the entire Caribbean. Small businesses had 13 per cent accessibility.

“You can’t grow economies where your medium-size firms represent the biggest employer yet they are accessing only less than a third of the capital to grow businesses. Our idea was to solve that problem, hence the reason why our vision was to drive — and still is — to drive the velocity of economic growth using creative financial solutions,” Grey added.

The solutions they came up with were anchored in the idea of alternative investments, which allow for capital to be very flexible in flowing through different channels and taking on different risks on the spectrum of risk appetite.

“We all saw the opportunity at the same time and it made the conversation easy when we met up. We all knew where the gaps were and we did various iterations of: How do you execute various iterations of what product in terms of alternative investment we should bring to the market? Which one first? And why?” Grey told the Business Observer.

That exercise took the team two years back and forth, changing thoughts and developing their business plan, but what was important was that they all saw the gap in the market and were determined to fill it. In 2016 the name Sygnus was generated by Dr Ike Johnson who based it on his discovery of Cygnus, which means a collection of stars containing the bright star Deneb and which later aided in the naming of its third business, the private equity fund Sygnus Deneb. Sygnus launched with Sygnus Credit Investments in 2017 after obtaining all its licences to operate.

With the Jamaican environment being dominated by government securities Grey explained that Sygnus had even more fuel to expand as the investment horizon had limited exposure to corporate bonds, the stock market, and real estate. When portfolio managers, pension fund managers, and other investors realised that a solid portfolio strategy is to diversify before they were over-concentrated in government, the equity market became vibrant.

“That also gave us the opportunity to look at bringing alternative investments to the marketplace where pension funds and other investors can now start accessing a wider range of alternative investment,” he revealed.

But getting to this point took patience, and Grey describes his challenges as opportunities and ones that brought about humility.

“Most obstacles represent a barrier to entry. The fact that some things are very difficult means only very few people are going to try it,” he said.

A new company starting to make investments, although the faces and names were familiar in the banking sector the team had challenges raising capital to start the business as credibility in their previous roles did not matter. They called tirelessly, and after what seemed like hundreds of calls to ascertain investor interest, the team raised US$5 million — but that was significantly lower than what they thought they would habe been able to raise successfully.

“We thought our business idea was so great and everybody sees the gap in the market, so we thought we’d raise US$40 million easily between us. We know all the players in the market, the players know us, and we have a good business plan,” Grey said boldly.

When the reality sunk in that it would not be so easy, that other people did not think their idea was as great as they thought, and that many were concerned about start-up risks, the team had mixed feelings. With more effort into fund-raising they made a second attempt and closed the first fund-raising for the private credit fund, Sygnus Credit Investments, at US$16.5 million.

They now laugh about their initial capital raise.

Three years into the business came COVID-19, but they worked through that scenario and SCI tripled its growth during the health crisis.

“The reality is: Sygnus Credit Investment was the first to launch, and that did very well. We were already profitable after one year, and our profit kept doubling. During COVID our profits kept growing, and we were one of the only financial firms who continuously pay out dividends during COVID,” Grey said proudly. The company has not missed a dividend payment, with payments increasing each year at US$0.05 cents per share.

With current geopolitical issues Grey says there’s no need to panic as time and situations continue to change and he has learnt that the business is an infinite game. “We are going to be raising capital over and over again. We’ll be solving financial problems all over again,” he declared.

An investment firm that began as a discussion over drinks with friends evolved into a business plan with a foundation in Investment Banking and Wealth Management which would feed into the Alternative Investment Platform covering three separate pillars – Private Credit, Real Estate Finance and Private Equity.

Each company has been doing well in its respective area. Sygnus Credit Investments had a record year, with net profit increasing by 51.4 per cent to US$4.29 million and total investment climbing up 11.3 per cent to US$6.27 million.

Sygnus Real Estate Fund (which launched in 2019) recently completed a warehousing facility, and its One Belmont Road project in New Kingston, St Andrew, is eighty per cent completed and is expected to be ready by September. It also has a completed development in Montego Bay, St James, with residents already moving in.

Since Sygnus Deneb’s launch in 2020 the company invested in four medium-size firms that diversify across the region in different sectors.

“We have our first investment in Aruba in the food and beverage sector. We have a business-to-business logistic investment that covers the Caribbean, and we invest in the largest adventure tour business in the Caribbean, Chukka, and we also invest in one of the largest super yacht repair — Caribbean Marine Investments,” he revealed.

Just four investments now, the demand for private equity has, nevertheless, created a pipeline of over US$50 million for Sygnus, with various companies currently in advanced negotiations with Deneb. Deneb is currently in the market to raise US$20 million to expand its portfolio.

“Our medium-term vision for Deneb, over the next 36 months, we expect that portfolio, in terms of investment holdings, to be in the region of US$100 million — and that would probably represent 12 investments,” shared Grey.

Today, Sygnus covers the Caribbean from three geographical locations: Jamaica, Puerto Rico and St Lucia. Aside from the successful launch of SCI, Grey reminisced on the most memorable day for the team when Gassan Azan Jr — founder, chairman and chief executive officer of Bashco Trading Company Limited and MegaMart Wholesale Club — decided to join the group as a co-founder. Grey recalls that without Azan Jr the journey of Sygnus would not have been as smooth as it has been.

A great head start for Sygnus, and the group has a very ambitious strategy to grow even faster than the first five years.

“For Sygnus’ vision to be realised and the legacy that we want to create — which is to transform the ecosystem of the financial services sector in the Caribbean — you probably don’t see it now but in 10- 20 years we do not want the Caribbean financial services sector to look the way it is. We want there to be a very strong ecosystem of alternative investment management, a very strong process and channels through which various forms of business[es] can fund themselves to complement the traditional financing,” said Grey.