This was a story that came up on my radar back in April that needed to be put out there. It helps to fill in some of the blanks about this company and what they have been up to in Somalia. I had no idea that they were involved in the construction of a resort in Somalia and here are the details.
International Campus, which he says cost more than $6 million, is now open for business and mostly booked. Beyond the pool and the ocean views, there is a bunker, a trauma hospital and something akin to Mad Max’s version of an auto body shop, where specialized gear heads will fix “the ballistic glass on your armored vehicle,” as Mr. Stock puts it.
He expects the new place to break even next year. The trailer park, he says, is grossing about $2 million a year. When his cement-making business opens up, there is an entire city to patch and restore.
His strategy is pretty simple, and summed up in this statement.
Mr. Stock’s gamble: The security outfit will help guide the country toward peace, turning his investments into big money. “It’s like getting in at the bottom of the stock market,” says Mr. Stock. His unusual war operation is making him into a kind of ultimate gentrifier, a mini mogul of Mogadishu, perhaps.
In the article below, it mentioned that the security component was actually losing money. But because that operation is helping to push the country along towards peace and stability, that it will support the company’s main goal of being situated to make money off of it’s real estate/reconstruction investments there. Everything needed to stand up a country during the reconstruction phase will be a market that BG is positioned for. Very smart, but risky and I hope it pays off for them.
And Bancroft isn’t the only group trying to set up shop in Somalia to support the future reconstruction efforts. Check this one out.
With dwindling war efforts in Iraq and Afghanistan, other American contractors are moving in, too. A Virginia company, Atlantean, is setting up an airport hotel in the south. Among its board members, according to its website, is former Maj. Gen. William Garrison, who led the mission associated with Black Hawk Down. In the movie version, he was played by Sam Shepard. Maj. Gen. Garrison couldn’t be reached for comment.
My other thought about this deal is that Somalia will be the model for what is going on in Mali. That mission will require logistics and support for the post-conflict reconstruction effort. These folks will need hotels/living areas to support the various missions, and companies like BG will step in to make it happen. As the wars in Iraq and Afghanistan wind down, numerous companies will be looking at places like Somalia to fill a need. They will also be watching how this business model works out and take notes.
There will also be plenty of capable folks willing to do this work, and men like Michael Stock will be leading the charge. Pretty cool and we will see how it goes. –Matt
Michael Stock is pursuing an extreme version of that basic investor’s principle: Get in early. He’s just finished building a resort on the coast of war-torn Mogadishu, Somalia. WSJ’s Christopher S. Stewart reports. (Photo: Dominic Nahr/WSJ)
A Bet on Peace for War-Torn Somalia
By CHRISTOPHER S. STEWART
April 26, 2013
Michael Stock sees things that others don’t. “Imagine this,” he says one recent afternoon, standing on the sunny second-floor deck of his new oceanside hotel in Somalia’s war-battered capital. “There are banana trees where there’s desert now, and there’s this view.”
The banana trees haven’t grown in yet, but International Campus, as he calls the complex, is the closest thing to a Ritz for many miles. A fortified compound sprawled across 11 acres of rocky white beach, it offers 212 rooms including $500-a-night villas, several dining rooms, coffee and snack shops, and a curving slate-colored pool where sun-seekers can loll away Somali afternoons.
“It’s going to be ridiculous!” Mr. Stock said, just weeks before residents began arriving for April’s opening.
A few hours later, the jittery sound of gunfire split the warm February air not far from his new hotel—a reminder that the country is still muddling through a decades-old conflict and that there are still bullets flying, bombs detonating.
Bananas in the Desert
Most Western countries have avoided Somalia, leaving a void to be filled by contractors like Michael Stock’s Bancroft Global Development. He envisions ‘banana trees where there is desert.’
Mr. Stock isn’t just anyone gambling on a far-fetched idea in a conflict zone. In an unusual twist of the war business, the 36-year-old American is deeply involved in the conflict itself. In addition to being a real estate developer, his company also helps train Somalis in modern military techniques.