Artificial intelligence impacts our everyday lives and informs business decisions of some big companies. Examine how small businesses can use artificial intelligence to their advantage. 'But then I made a huge mistake,' says Ebrahim. 1 believed people who made promises of vastamounts of money that they'd invest in the new business. On the strength of that I made the nextmistake: I hired 16 people - six being highly paid CAs.' 'We had no revenue, no assets, an expensivesalary bill and a very expensive cost structure - and the losses just kept mounting. To make mattersworse, two weeks after getting our first institutional client, markets were hit by the Asian crisis. I knowit has since become a sensitive image to use, but it was like a toddler taking his first steps along thebeach just when a tsunami hit ... '. 'But we survived – on the foundations of an investment philosophyof no volatility, which, combined with our ethical offering, proved to be a very definite and successfulniche.' I fired everybody after realising they were having a ball doing nothing.We started managing the money we did have very strictly, our performance improved, lossesdisappeared and the company- and each of its operating subsidiaries - has never made a loss again,"says Ebrahim. 'After having made every mistake possible, and having learnt very expensive lessons,performance started picking up and we decided to enter the retail market, which provided thebreakthrough the company needed. People started coming to us, whereas before we had to call onpeople trying to convince them to invest R300 a month. Up to 65 per cent of our sales were based onthat direct model, which has led to our having the lowest churn ratio in the industry and proving howimportant personal relationships are in business. We now have 30000 direct retail clients.' The OasisCrescent Equity Fund, its flagship fund, has been the best performing equity fund since its inceptionin August 1998: In the fourth quarter of 2018, the fund size was 5.3billion Rand.December 2000 was another landmark for the group, when it registered its first global fund, theCrescent Global Equity Fund. That has since established it as the world's best performing Shariah-compliant equity fund. The retail retirement business was launched in 2002, providing all investorsaccess to Shariah-compliant and ethical retirement savings not previously available. We find that30per cent of our clientele aren't Muslims,' says Ebrahim. Oasis also launched the first Shariah-compliant prudential unit trust in April 2005 and the first listed Shariah-compliant property fund inNovember 2005.Ebrahim ascribes the success of the business - Ebrahim received the ChampionAward for Asset Management at the 2018 GIFA Awards - to an owner-based culture and adherenceto global regulatory and ethical standards. He says the Oasis model is also built on selling a producttailored to what people need and not so much on what they want, a result of building up a personalrelationship with a client. Oasis has more than R25 billion of assets under management and employs140 people in South Africa and Ireland. Through a joint venture in Malaysia, the group has exposureto Singapore, Indonesia and Brunei. The Oasis head office is based in Cape Town. In February 2007,4Oasis opened associate offices in Dubai. In that same year, Oasis reached the US$4 billion mark inassets under management. In June 2007, it celebrated its tenth birthday. In February 2008, Oasisopened its office in Dublin to further the growth of its global portfolio-management capabilities. Itcontinues to expand its product range. Entrepreneurship in action: Exploiting restrictive rulesBuying shares in a company run by one of the finalists in the 2006 World Entrepreneur Awards helpedfinalist Adam Ismail Ebrahim – CEO and CIO of Oasis Group Holdings – fund his company. 'In 1997 -when I realised that my time as an employee was coming to an end - I sold shares that I had boughtin Naspers a year before its listing at R1,45, for R50,' says Ebrahim, whose brothers, MohamedShaheen (chairman) and Nazeem (deputy chairman), pooled resources with him to start an investmentcompany. They wanted to provide a particular service not previously offered to Muslims, both in termsof savings and retirement. Muslims have the dilemma that their religious rules prohibit them frombenefiting from the proceeds of companies involved in alcohol, tobacco, financial services,entertainment, and pork products as well as companies that are highly leveraged. The use ofderivatives is also prohibited.Oasis began with seed capital of R3 million, with a strong focus on developing the niche market ofinvestments that complied with Shariah religious law. It has since grown to be the leader worldwidein Shariah-compliant investments. Both its global funds were rated AA by Standard & Poor's and itsCrescent Global Fund received a five-star rating from Morning Star. Ebrahim, who hails from DistrictSix, holds a BSoc (Hons) from UCT. He later studied accounting, completed his articles at Deloitte andwas seconded to the firm's London office in September 1986. 'It was an interesting time, with newregulations being implemented in the financial-services sector. On top of first-hand experience ofchanges in the regulatory environment, I witnessed the stock-market crash the following year,' saysEbrahim, who gained insight into the world of investment while witnessing the contrast between'absolute euphoria caused by booming market conditions and utter depression' when the tide turned.He returned to South Africa in 1988 and joined Allan Gray as an analyst but was soon promoted tobeing the partner responsible for training managers. 'Until 1996 things went very well, and I felt thatI was living my dream,' says Ebrahim, who later found it 'increasingly difficult' to get motivated by hisenvironment. 'When I resigned to start out on my own, Allan Gray offered to fund my business.However, I felt that it would be inappropriate and that I wouldn't really be independent. I wanted thefreedom to paddle my own boat, to follow my own philosophy and target untapped markets with myown resources. Thus, we became competitors after I had eight good years with Allan Gray, gainingconfidence and an understanding of the industry.'

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Answered: Artificial intelligence impacts our…

Artificial intelligence impacts our everyday lives and informs business decisions of some big companies. Examine how small businesses can use artificial intelligence to their advantage.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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