Every successful person gets in front of a big trend and then rides the wave.
And Scott Picken aims to ride the wave of expanding access to the wealth-creating asset of property through the platform of crowdfunding.
The Durban-born entrepreneur is in familiar territory. He has been playing in the international property investment space for nearly two decades – and is the only one playing in the technology space during this time trying to enhance the property investment process.
It was while completing his master’s degree in London that Picken wrote his thesis on how technology and computers were going to change the property industry. While that might not be headline news today, in 1998 it was out there. “What I am excited and passionate about is how technology can enhance and change an industry,” says Picken.
That industry is property. “Property investment is not that complicated. You buy a decent property in a decent area where you have demand or can add value.”
Yet he has never done this alone. Partnerships have always been part of his philosophy. So, aged 22, it was together with a partner that he invested – from London where he had settled – in his first property, back home in South Africa.
Armed with a cum laude construction-economics degree from UCT, sweeping a construction site in London was a life lesson that Picken did not much enjoy at the time.
But in true dogged South African style he soldiered on and by 23 was on the board of that same firm, a £100m medium-sized Irish property development company. There was good reason for his meteoric rise: his knowledge of IT.
A year later he was investing in London property and at 26 was heading up his own company, International Property Solutions (IPS), primarily helping expats invest in property in SA.
Picken built IPS on the principle that US author and motivational speaker Zig Ziglar explains as, “You can have anything in life you want if you help enough other people to get what they want.” And in 2007, the year Picken returned home, what South Africans wanted was to invest in property in either London or Australia.
Together with property tycoon Hennie Bezuidenhoudt he formed Wealth Migrate to help bring people together to use their collective buying power to invest globally in quality assets with quality partners.
In total, Picken and his partners have concluded over 2 300 deals in the past 11 years helping South Africans invest internationally. “Collectively, we have invested $1.34bn on five continents for clients over three decades.”
The wealth gap
But it is technology that will allow them to address the wealth gap and create access for the masses to real estate, Picken tells finweek.
That wealth gap is considerable – the 85 wealthiest people in the world hold the same wealth as the bottom 3.5bn. Last year at the World Economic Forum in Davos, Switzerland, the wealth gap was identified as being the biggest threat to the sustainability of the planet.
Property has been the undisputed champion for preserving and creating wealth for centuries. But while 49% of the world’s wealth is held in property, only 12.9% of the world’s population has access to real estate and the wealth effect that it creates. Of that 12.9%, in the Western world alone, less than 1% of people who retire at the age of 65 retire wealthy.
The wealth in SA over the past 30 years has eroded at 29.5% per annum, according to the Global Wealth Index.
“It is like trying to run a race up a sandbank. No matter how much effort you put in, you keep going down,” he grumbles. “There are too many middlemen draining away the returns and investors are not getting the returns they want anyway. They don’t have access to the same quality deals as the big players do and get to play in a space that is very overcrowded. It’s not where the top 1% is playing anyway.”
Wealth Migrate partners with proven local operators, primarily in first-world countries such as the US, UK and Australia – but also on home territory. And it is in SA that co-founder Bezuidenhoudt is building 14 hospitals, as well as three more in the rest of sub-Saharan Africa.
Empowerment through property
Picken says Wealth Migrate’s mission is to empower 1bn people by 2020 through access to property.
He says this comes with the responsibility of education by empowering children with the skills of entrepreneurship, empowering women and empowering people through the use of technology.
Technology can cut out the middleman, reduce costs, increase efficiency and, most importantly, increase accessibility.
This article originally appeared in the 9 July 2015 edition of finweek. Buy and download the magazine here.