In this interview, CEIBA Investments Portfolio Manager Sebastiaan Berger discusses the strategy behind 18 years of building up a successful investment portfolio in Cuba. The company is currently partnering with Spain’s Melia Hotels International in a hotel project underway in Trinidad, Varadero and Havana.
Sebastiaan began working for CEIBA Investments Limited in 2001 as an independent adviser and in 2002 became a founding executive director of CEIBA International Management Ltd., the third party investment manager of the Company from 2002 to 2013, and throughout that period he acted as the lead investment manager. He became Chief Executive Officer of the Company in May 2013 upon the internalization of Management.
In 2019, after having led the £30 million capital raise and listing of CEIBA Investments on the Specialist Fund Segment of the London Stock Exchange, Sebastiaan was hired by Aberdeen Standard Investments to act as the portfolio manager for CEIBA Investments Limited. Being a “reverse-brexiteer,” Sebastiaan and his family moved to London in September 2019.
Sebastiaan is also a non-executive director of Adelante Exotic Ltd., a fund specialized in the trade in non-performing indebtedness. He is the co-author with Cameron Young of “Cuba – The Regulation of Foreign Investment,” and the co-author with Andreas Winkler and Julio Maldonado of “Cuba – Contemporary Art.”
He graduated from the University of Leiden, The Netherlands, in 1990, with a degree in civil law and has worked in New York, Washington, Rotterdam, Brussels and Havana. In June 2019, Sebastiaan passed his (FCA UK) Investment Management Certificate exam. His primary experience is in the areas of mergers and acquisitions, finance and foreign investment. Sebastiaan and his wife, Xantha, are renowned collectors of Cuban contemporary art.
On 22 October 2018, CEIBA Investments Limited (“CEIBA” or the “Company”) added £30 million (approximately US$39 million) to its capital and listed its shares on the Specialist Fund Segment of the London Stock Exchange. Its 2018 audited financial statements show that the Company has total net assets in excess of US$200 million.
The Company which stated investment objective is to provide a regular level of income and substantial capital growth through investment in Cuban real estate and other assets directly related to Cuba, is the biggest and amongst the most successful foreign investors in Cuba. Its operational assets include interests in the Miramar Trade Center, the Meliã Habana hotel and the Meliã Las Américas, Meliã Varadero en Sol Palmeras hotels in Varadero.
But perhaps CEIBA is also amongst the boldest foreign investors in Cuba especially when it decided in the middle of Donald Trump’s Presidency to go ahead with plans to fund the construction of a 400 room hotel conveniently located for tourists wishing to visit the UNESCO world heritage city of Trinidad and to upgrade and expand its (four) operational hotels in Havana and Varadero.
CEIBA has good company. All of its hotels are operated by Meliã Hotels International S.A., the leading hotel chain of Spain, which manages over 30 hotels in Cuba, predominantly as operator and not as (co-) owner; Meliã’s only hotel equity interests in Cuba are in the hotel properties in which CEIBA is the principal foreign shareholder.
CEIBA’s secrets? Its seasoned foreign and Cuban managers, its strategy to focus on outstanding assets that make profits today and that may increase in value tomorrow, and its respect for, and at-arms-length dealings with its Cuban partners. And like I once stated: never underestimate your Cuban counterparts because they are twice as smart as you are!
Cuba Business Report: I’m guessing you are very passionate about Cuba. Tell us about your first visit to Cuba. Were you a tourist?
Sebastiaan Berger:
You are absolutely right that I am passionate about Cuba and the Cuban people! That passion started in 1996 when I first set foot on the island, and although it has had its ups and downs and has been severely tested by many U.S. Presidents over the years, it has grown in parallel with my friendships with many Cuban colleagues, artists, entrepreneurs and others.
The greatest assets of Cuba are its people and their creativity, and if you add to that a coastline of 6,000 kilometres and all the other good things the country has to offer, you may get infected….
When I arrived in Cuba in May 1996, Cuba started to open up to foreign investment and adopted a new foreign investment law (that replaced Cuba’s first foreign investment act from 1980). I was a (Dutch) lawyer and my mission was to set up an office for my (international) law firm and to have sufficient clients so that we could run a profitable operation. Conquering Cuba in a Chevy 1958 with driver, with a small briefcase, a huge Nokia mobile telephone, a small apartment on the 13th floor of a building that often lacked a functioning elevator, and President Clinton who just enacted the Helms Burton Act. Within 6 months, we received a license to open our offices and were the first international law firm to do so since 1959. Business was booming and changes were coming.
In 2001, I started to head the management of CEIBA, which during the period between 2001 and 2019 we have been able to grow from approximately US$19 million to over US$200 million – whilst distributing over US$85 million in dividends since 2004.
A good friend of mine once taught me that it is important in life to start as you intend to go on! When I started to manage CEIBA’s investment portfolio, our basic rule was to invest in assets and businesses that make money today and that are worth (a lot) more tomorrow. In my opinion, that simple rule has been one of the principal foundations of our success.
Cuba Business Report: How did Melia Hotels International become your strategic partner? How did the deal come about? Did it take a long time to negotiate with CEIBA’s other partners?
Mr. Berger:
Our business relationship with Meliã Hotels International S.A. goes back to 2009 when we took our first small stakes in the Meliã Habana, the Meliã Las Americas, the Meliã Varadero and the Sol Palmeras hotels. When we expanded our interests in these hotels, we also invited Meliã to partner with us in our Trinidad beach resort hotel (the Meliã Playa Trinidad) and jointly developed plans to upgrade and expand the hotels in Havana and Varadero.
Like in most relationships, it took a bit of time to get to know each other and fully appreciate what each side is bringing to the table and also that we came to the conclusions that we share the same values. The end result is that we greatly respect each other and that we are both committed and extremely well placed to play a role in building up Cuba’s tourism sector.
(End of Part One of our interview with Mr. Berger. To be continued tomorrow.)
