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Investigating partnerships with local players: Build, buy or partner?

Author

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  • Sanni, Toyin

Abstract

African markets such as South Africa, Egypt and Nigeria offer diversification opportunities to global investors. Such economies show significant growth and opportunities, notwithstanding peculiar challenges. Domestic custodians offer safe-keeping, settlements, reporting, foreign exchange and corporate action, as well as value-added services. The big question for the global custodian is no longer whether to play in these markets — that choice has in fact been made for them but, how should they enter? Their options are categorised as ‘build’, ‘buy’ or ‘partner’.Building may promise control, brand purity and absence of legacy problems but it is hardly the quickest-to-market option. Buying gives access to existing licences, skills, structures and legacy business and a quicker time to market, but poses usual acquisition challenges. Partnering via an agency would likely provide the quickest-to-market option, links and domestic knowledge on an ongoing basis; however, there is exposure to partner risk, which must be properly appraised.

Suggested Citation

  • Sanni, Toyin, 2011. "Investigating partnerships with local players: Build, buy or partner?," Journal of Securities Operations & Custody, Henry Stewart Publications, vol. 3(4), pages 298-304, March.
    • Handle: RePEc:aza:jsoc00:y:2011:v:3:i:4:p:298-304
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    More about this item

    Keywords

    African markets; domestic custodians; global custodians; building; buy; partner; service standards; risk;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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