YouSaid · the spoken record

Juan Carlos Ortiz

lines on the record: 32
first: 2018-02-02
most recent: 2018-02-02
sittings or episodes: 1
sources: podcast

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“Yeah, and I guess this is why I say in handside, I guess it should have surprised me because you get a bunch of smart people and we have some very good people in the region and you tell them to make money and you give them some rules. I think they follow the rules, but they also develop their own way of making money. And there's no reason why it needs to look like the way we do it in New York or the way we do it in London. But I'm a big believer that there's a reason why we have the position that we have in the markets where we operate. And it comes down to the culture, the way we interact with our clients, the way we interact with each other, the way we think about our commitments, what we do and what we don't do, our procedures, so that you name it. I couldn't really be more specific, but after 18 years in the firm, I guess I know where the Goldman Sachs way is. And I'll be happy if at the end of my tenure in Latin America, Goldman Sachs, Latin America looks more like Goldman Sachs, New York or Goldman Sachs, London.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“That's a good one because I have to say going in, although I have obviously some visibility over Latin American business because over the years given I'm Chilean and obviously have strong links with the region, I've always kept an interest and I always fly in and out and every now and then people will ask me to do more in Latin America and I will kind of do a little bit and help in a transaction here and there but never in the way that I've been doing it for the last year. I think perhaps the biggest surprise and in hindsight shouldn't have been a big surprise is a bit of what I was saying before how different Culture and the DNA of Goldman Sachs in the region is, from the DNA and culture of Goldman Sachs in New York or in London and some of our other”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“long term companion in terms of providing financial services to their clients. I don't think that's the view that most people have of Goldman Sachs in Latin America. Given my background in investment banking, I'm a big believer in building that franchise because I think it has a value. So therefore my first job taking on this assignment was to re-bump our client coverage strategy and to work with the team and say, okay, who are the people that we actually want to get close to? Which are the companies that we want to develop a relationship with? And then focus on that and focus on that not because we see an immediate opportunity but because we think longer term these are the companies that are going to require the type of services that we provide and we want to be in a position when they decide to do something they think of Goldman Sachs as the natural place to go to. We're beginning that journey. The how is very easy.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“A tough market for us for a couple of reasons. One, there are a couple of our US competitors that have a long history in the region. They've been there for a century and they've been there in a big way. So they have big local presence, good knowledge of the local companies and good understanding of the risks involved. In a way, they're brand names in some of these markets in the way that perhaps we haven't been. We have been I think historically perhaps more opportunistic about the kind of business that we wanted to chase. We've done well, we've done strategy, but the effect of that is that Gormans is not seen in the same way that Gomas is seen in the US or Western Europe. In the developed markets where we've been operating for a long time, like in the US, Goma has a franchise, Goma has a brand, the brand stands for somebody that provides advice and is a trusted.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“Goldman hasn't been historically as big a player in that region of the world. You took over the leadership of the business last year. Talk about the strategy you're pursuing to build up our presence in Latin America.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“In the world after the US and China that are largely unexploited up until now. Why? Because the infrastructure that you required to exploit them is actually pretty significant. You need to get that oil and gas to markets and that takes pipelines and all of those things that already existed in the US that don't exist in Argentina. And that requires a big upfront investment. So again, with the new political stability in Argentina and a more business friendly government, I think it's quite likely we're going to see that industry take off. Those are just two examples and there are plenty of other examples of things that we're beginning to see a lot of interest in the region.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“Just to give you a sense of how relevant natural resources are. If you think about our investment banking business, around 40% of the investment banking business we do in Latin America, it's natural resources related. So it's a big part of our business. And the opportunities are in multiple countries and multiple subsectors within natural resources. Obviously, mining has always been very relevant. There are a number of good deposits in places like Peru, in places like Brazil, Argentina. Venezuela, perhaps they haven't been developed at the speed that they would have been developed had the political situation been more stable. So we expect to see a lot of money coming in and taking an interest in developing those deposits. Energy is another good example. We talk about shale gas and shale oil in the US before. Well, Argentina, by some metric, has the third largest deposits of shale oil and gas.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“So natural resources are a big part, not just of the Brazilian economy, but to some extent Chile, Argentina, a lot of Latin America. So what are the big opportunities that people are seeing in the Latin American energy space right now?”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“And everybody thinks that that change is underway. With those two things in mind, I think people are now looking at Brazil and saying, okay, what is the right moment to go back in? The real test is when the hard investment comes in, foreign direct investment comes in,”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“Big opportunity. Brazil is a big economy. Your right is coming out of a couple of years of deep recession and also the downturn in the commodity market. So that also had an impact in Brazil. Brazil relies heavily on commodities. Last year was better. I think the GDP was marginally positive, but big difference compared to the negative GDP growth we had in the previous two years. And this year we expect the economy to start growing again. At the same time, we see very big political developments in Brazil. It's been well publicized that there have been some big corruption scandals in Brazil that have tainted businesses, politicians, so there's the need for renovation. I spent a lot of time in the region there talking to a number of people. I don't think anybody disagrees with the need for a change in the way business is done, in the way politics is done.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“Let's switch gears a little bit and talk about another part of your job here at Goldman, which is you're focused on identifying growth opportunities in Latin America. You obviously can't talk about Latin America without talking about Brazil, the region's major economy, and one that's just starting to emerge from a pretty deep recession. How are our clients viewing Brazil right now?”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“It wasn't economic to take it out. So technology developed the reason why the US is producing so much is because they can produce at a cost that is below the global cost of the alternative. And it's as simple as that. Also, the nature of this oil and gas development is different from the mega developments that you see in other parts of the world where you need to put billions of dollars on the ground before you get a barrel of oil out and then you're committed for the next 10, 20 years to amortize your investment. So in the US, the upfront expense that is required to drill one shale well and the life of that well is very, very short.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“and they will continue to do so. At the same time, you will hear that all of the chief executives complain about the fact that the US seems to have mixed feelings about it. But I think the speed of the change could be accelerated by providing more certainty around the future, which is what we found in other markets around the world. Certainly European markets are very good example.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“I don't think I have a good answer for that because if you talk to the CEOs of some of these global companies that got into the renewable train early and they saw it as an opportunity and the rollout the resources and their expertise and put capital to work I think they've done very well and they're very happy with that those same people are now saying the US is the biggest electricity market in the world. The US consumes for some metrics about 25% of the electricity that's generated in the entire world is a big market way beyond the relative size of the population. So a lot of those companies are saying you know what the US is going to have to do this whether they like it or not. So they are getting into the US market and growing their presence in this market because they're saying we cannot miss being in the biggest market in the world. And you have a number of the European firms that have made big inroads in the US market.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“between the US and Europe. But I do think that this is one of those cases where burning fossil fuel creates a big negative externality. So it probably makes sense for governments to promote a change away from that. But then once you have that in place, there are a number of implications for the way the markets are regulated. And regulators, frankly, are a bit catching up with that. So go back to the example I mentioned before. You need a bunch of gas plants to be on standby just in case the wind is not blowing. Well, nobody's going to build a gas plant just to be used maybe when the wind doesn't blow as a backup. So you need to pay those guys in a different way. You're not paying them to produce electricity. You're paying them just to be available. And that's something that requires a change in the way people are compensated today in most markets.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“The most important initiative, and it was driven by sentiment coming from the population around global warming and what we're doing to the environment in terms of carbon emissions. So that in turn got translated into political will to actually do something about it. And I think probably the most important foresight there was to subsidize the development of some of this renewable energy initially, hoping that human creativity and entrepreneurship was going to drive the cost down to a point where the subsidies were not going to be necessary anymore. Today, subsidies are rarely necessary. So most of this renewable wind farms or solar farms can be built without any need for subsidies. That wasn't the case to start with. So that was a very important area where government intervention actually was a good thing. I know it's a controversial thing to say. We're going to get to the diverse...”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“that aren't standby and you switch them off when there's no wind. And this is why most people think about gas as a gap field because you're going to need those gas plants for a while just in case the wind is not blowing. I think the long-term solution is probably going to be around technology developing to a point that makes storage efficient and commercial, which is not the case today. Large scale storage for electricity is still very expensive and bulky. So it's not a practical solution to this issue.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“There are two aspects to it. First one is the intermittent nature of some of this renewable generation. Wind farms is the best example, right? Because if the wind doesn't blow, they don't produce anything. We talk about how smart grids help with the issue and they somehow find alternatives way of finding other ways of producing electricity when the wind is not blowing a certain part of the grid. As we increase the amount of power that comes from disintermitted sources, the ability of the grid to react and adapt is going to become more and more important. I think the bigger issue is what happens when there's just not enough of that renewable energy. So what happens in a scenario where say in a normal day 100% of the electricity is produced by this intermittent sources and suddenly the wind just doesn't blow then what do you do then? I think that two solutions, the short-term solution is that you have some old-fashioned plan.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“Leon they acquire expertise, and they're now the leading players in the sector. Those that fought in the first place and took the view we've been producing electricity from burning coal for the last hundred years, nothing's going to change. We're going to still be burning coal 100 years from now. Those people had to change their position. And they're now building wind farms, but they are five, ten years late in doing so. So it was a very serious debate, certainly in Europe where this all started in a big scale for a couple of years at the ball level because people had to make hard decisions about where to invest. Do I build another coal plant or do I bill a gas plant or go into renewable energy? And do I have the right people to do that? Are the people that build my coal plants saying, guys, that I need to go and develop wind farms or solar farms? And the answer is no. I mean, there are obviously some exceptions, but by and large,”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“This is something that people been debating for quite a long time, and although my clients and CEOs and boards always kept an interest in this, it only became real less than a decade ago when politicians and regulators put in place very specific incentives to go and build wind farms or build solar farms and started penalizing fossil fuel generation the form of a carbon tax. So it became a business issue because whether they like it or not, those incentives were there. They could either ignore them, they could fight them, or they could take advantage of them. And there was a multiple of reactions to those. But I think if you look at the history of that as a good lesson also for other geographies, certainly in Europe, the early adopters, the people that embraced the change were big beneficiaries of the change because they jump into a growing trend very”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“I don't think there's anybody that doesn't think of renewable as an important growth sector that is gradually going to replace the fossil fuel generation fleets. And in fact, most people today are going a step further, particularly in Europe, and they're getting rid of the fossil fuel generation assets because they just don't see it as part of the core business anymore. I mean, when you think about it, this company had made a good business out of building this big fossil fuel plants for 100 years, and suddenly they're here saying, okay, that's not the future anymore. We got to switch mentality and we got to learn how to build and develop this new renewable generation facilities. Very big shift in business. So threat and an opportunity.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“When government started to introduce incentives for people to build renewable energy, a number of people were very skeptical. There were a few visionaries that actually said this is a future. Other people were very reluctant. In some cases, they even fought it and say, no, no, this is not even going to work. We're always going to burn gas or oil or coal. And it took them a while to get convinced. Today...”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“The transition to a low carbon economy is having some profound effects on the sector. Talk about how your clients, many of whom are large European utilities, are viewing growth opportunities in renewables today.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“Provide appropriate incentives for the private sector to build those lines, knowing that they will get a return on that investment by allowing people to use that infrastructure. But it's a monopoly. In most cases, a monopoly. So the network companies are granted the right to use that monopoly for a certain period of time in exchange for building it.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“So networks are natural monopolies. I mean, it would be inefficient for us to have competing providers of electricity infrastructure and having multiple wires come into your home. You only have one wire coming into your house. So that's why it has to be regulated. Regulation works slightly different parts of the world, but most regulation basically rewards the investment. So you have some kind of central planning that decides what type of infrastructure needs to be built and approve the companies build it and then they get rewarded by being allowed to charge for the usage of that infrastructure. When you think about what's happening today with the growth in renewables, we have to expand those networks. In Europe and increasingly in the US, we're going to start seeing offshore wind farms. So these are things that are installed miles off the coast. You need to connect them to the grid. That's when the regulators come in and”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“When you think about the complexity of an electricity network where say there's a football match, you have millions of people turning on the TV at the same time, and that produced a huge spike in the consumption of electricity. Or you have a snowstorm that hits a line and you need to reroute the electricity or you need to find alternative sources to produce electricity and then multiply that by thousands and thousands on wind farms and solar farms that could be working one minute and not working the next minute because the wind is not blowing. So the grid needs to react to all of those changes instantaneously. Digitalization allows distributors the ability for the grid to react to the new information and make the necessary changes and adjustments at the speed that it is required so that we as users continue to have reliable supply of electricity.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“If you think about technology today, we can charge our phones wirelessly. And there are people around the world do all kinds of work and research around what we call electrical highways that would charge the vehicles as they drive. So I don't think rolling out the infrastructure is going to be a constraint for the rollout of electrical vehicles. I can tell you how that infrastructure is going to look, but I don't think it's going to look like petrol stations today with electricity charging points every so many kilometers because the cars need to stop the recharge. I think it's going to look something different.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“There were no gas stations anyway, exactly. So the infrastructure was built from scratch. So there's no reason why we couldn't do the same for electricity. Now, as it happened, I don't think that the infrastructure is going to look like that. I think it's going to look very differently.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“People ask this question all the time. They say, you know, the transition to electrical vehicles is going to be very difficult because we don't have the infrastructure. I mean, if you think about it, when we started to produce and use combustion engine vehicles, it was an infrastructure in place. The infrastructure was built.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“By now, I don't think anybody is fighting it anymore. I think people are to different degrees embracing the change. And I think that we're moving very steadily to a world where most of the energy will come from renewable sources.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“Very different picture. So by some estimates, in the next two or three years the share of renewable energy would have increased significantly around 10% in a five-year period. 10% of the world electricity consumption is a lot of megawatts. It's all of Europe, right? Just to put that in perspective, I think there were some people that resisted the change.”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT
“It's a good place to start and a very good question. I think we are looking at a once in a generation secular change in the way we produce power. And that's having very profound implications to the industry worldwide. Ever since humanity started to use electricity as a convenient way of delivering energy to homes, we've been producing it mainly by burning fossil fuels. If you take a snapshot, say a couple of years ago, around seventy percent of the power that we consume is produced by burning fossil fuels, that is oil, gas and coal. A few years back, led by Europe mainly, politicians and regulators decided to encourage their migration towards renewable energy, mainly wind and solar, basically driven by climate change concerns. And we're now looking at”
2018-02-02 · Goldman Sachs Exchanges · "Once-in-a-Generation" Energy Shift...Plus Investment Banking Outlook for Latin America · IDENTIFIED FROM THE TRANSCRIPT