Meet The Economist Behind Global Capital's Global Vision

6th July 2018

Italian economist and entrepreneur Paolo Catalfamo, who turned around financial services company GlobalCapital since taking over as Chairman three years ago, shares his vision for the Group and for the blockchain industry in Malta.

1. Tell us a little about yourself. What is your background and experience?

I’ve been working in the financial services industry – primarily asset management – for over two decades. I served as Deputy Chairman and CEO for Franklin Templeton in Italy and Southern Europe (including Malta), one of the largest fund management companies in the world, and in parallel cultivated my passion for teaching economics. I was Assistant Professor at Bocconi University in Milan before going on to teach at the University of Turin, University of Miami and Villanova University in Philadelphia. I am also a board member of the National Italian American Foundation, which is the largest non-profit organisation and represents 26 million Italian-Americans – making it one of the powerful lobbing groupings in the US. I also own a company called Investar, a financial group that acquires stakes in financial services and fintech companies.

2. What brought you to Malta and why did you get involved with GlobalCapital?

I was looking to acquire a life insurance company in the EU and was offered the opportunity to buy a stake in GlobalCapital. The acquisition turned out to be more complicated than I envisaged, but I am pleased with how things have turned out. It’s a great company with enormous potential.

3. GlobalCapital has been undergoing transition in recent years. What have been the major challenges and how have you handled these? 

GlobalCapital had been a loss-making company for eight years before I was appointed to the board, and its reputation on the local market had taken a knock. To complicate matters further, the former majority shareholder, BAI Mauritius, defaulted after we signed the sale purchase agreement and we also had to pay off an existing bond. So it was like jumping on a train at full speed. But we managed to keep it on track and are now in a position where we can steam ahead.

4. GlobalCapital almost doubled its pre-tax profits in 2017 over the previous year, rising to €4.8 million from €2.8 million. What do you attribute this to?

Lots of hard work! We brought costs under control, made our products more competitive, reinforced our sales team and transformed our investment strategy. To enable us to move to the next level and expand into larger markets, we recently also made strategic changes to our corporate and executive structure. This means the company is now not only robust, but also very well positioned.

5. What role does technology play in the business and what are its assets?

Technology is vital to any industry these days, but ours in particular. In the next five years, the financial and insurance services sector will undergo a cataclysmic technological revolution which will probably mean that in, say five years’ time, several of the big players in the banking, insurance and asset management business will no longer exist – as new, small and fast-moving ventures take over the market. Agility will be key, as companies must be ready, willing and able to adapt and change constantly to keep pace. It took more than a century to install a telephone in every home in the developed world, but only 20 years for a smartphone to reach two billion people in every corner of the world.

6. How do you seek to position GlobalCapital and what is your vision for the Group?

GlobalCapital must take full advantage of its relatively small size and agile structure to be at the forefront of the technological revolution. We are heavily committing resources to this area and have teamed up with some of the best software and technology development companies to fast-track the changes we need to make. We will only be better and more advanced than our bigger competitors in Malta and larger markets if we take these steps now. And that is where we plan to be.

7. How do you see the future for blockchain and cryptocurrencies?

Blockchain technology is the biggest revolution since the internet and will affect many businesses way beyond financial services. The most significant impact will be on the real estate, health, aviation, legal and data management sectors. The technology is still in its infancy, and undoubtedly needs to be developed and improved, but I expect this to happen very quickly. Just a few years ago, we needed a telephone modem to connect to internet and now we are all wirelessly connected. Technology is unstoppable, and let’s not forget that cryptocurrencies are only one of the blockchain applications around. They are not very efficient and, at some point in time, are likely to be replaced by some other form of blockchain-based, regulated currencies.

8. What are your views on Malta’s economy?

I see a very bright future for Malta provided the successes it is enjoying at the moment are properly managed. The Government has been very forward-looking to surf the blockchain wave, which is already reaping rewards and creating visibility. I receive calls from companies in California – that have no idea where Malta is – which want to come to the Blockchain Island. The biggest threat I see is the relatively small pool of talent based here and an excessive focus on property development. The Government can play a major role in handling both issues.

9. Are you here for the long-haul?

I moved my family here two years ago and brought over most of my investments as well as employing about 120 highly-skilled professionals. I expect that number to more than double by next year in line with the growth of our new ventures; so, yes, I am definitely around for the long-haul. I am a firm believer in the island and am always proud to be its business ambassador wherever I go, especially with my associates in the US.

This feature originally appeared in The Commercial Courier

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