IM Yearbook 2020/21

AMERICAN RCBI INVESTORS:
A HUGE MARKET WAITING TO BE EXPLORED
Many Americans never thought of leaving the US. But 2020 has
changed all that, and it’s a topic that is on the minds of a growing
number of people, writes Rogelio Caceres of RCG Global.
Since the end of World War II, the global
ultra and high-net-worth (U/HNW)
community has viewed the United States as
one of the most dynamic business environments
in the world. Whether as an ideal launching
pad to commence a rewarding professional
career, realise entrepreneurial ambitions or to
pursue university and postgraduate studies at
many of the best educational institutions in the
world, the US has long been perceived as the
ideal location. It is not surprising, therefore, that
residency and citizenship by investment (RCBI),
colloquially known as “Plan B” investments,
have largely been perceived by American HNW
investors as assets needed by European jetsetters,
Middle Eastern oil magnates or soon-to-bedeposed
Latin American and African dictators.
Based on the US market’s lack of perceived
need, the global RCBI industry understandably
focused on serving much more fertile markets
in Asia, the Middle East, Africa and Russia,
while the United States, the world’s largest
and most dynamic HNW investor segment,
remained largely “out of sight, out of mind.”
Rising Concerns
As a result of the United States government’s
calamitous response to the Covid-19 pandemic,
however, elite American households began
to become increasingly concerned about
the short- and long-term outlooks facing
their US-based families. At my firm, RCG
Global, we asked ourselves a simple question:
Why should American citizens ensconced
in their homes in Miami, New York City,
San Francisco, and Chicago, to name just
four of the Top 10 wealthiest cities in the
world, not benefit from the same level of
unfettered access, freedom, stability and
security enjoyed by their international peers
in Shanghai, Mumbai, Moscow, and Lagos?
Doubling in Size
Based on our proven track record promoting
the US EB-5 programme, the world’s largest
RCBI programme in highly promising (yet
overlooked) EB-5 markets such as India, Brazil
and South Africa, RCG Global firmly believes
that the American HNW market is poised to
rapidly adopt RCBI solutions. It possesses
several of the most important demand drivers,
which, from a market attractiveness perspective,
are critical to the successful adoption of new
investment migration solutions. No other
country on the planet has the sheer number of
millionaire households than the United States.
If American HNW families begin to adopt RCBI
solutions at a rate anywhere similar to their
peers in China, India and the Middle East, the
entire $25 billion RCBI industry could easily
double in size within 10 years’ time. According
to a Wealth-X/Economist 2015 study, American
households overwhelmingly cite “Quality of
Life” as their number one driver to pursue a
second passport or alternative residencies.
Demand Drivers
Given the spectre of continued social unrest, the
ravaging effects of climate change (particularly
in California and New York City), combined
with the probability of new tax regimes taken
place under a new Biden Administration,
the US HNW market exhibits all of the key
demand drivers to propel a rapid growth curve
going forward. The global pandemic of 2020
fundamentally weakened investor confidence,
both at home and abroad, in the United
States’ capability to effectively manage future
global disruptions and crises. As the situation
worsened over the summer, I personally began
to explore potential RCBI solutions for my
own family. When speaking to friends and
colleagues here in Miami, or in New York and
the Bay Area, for example, I was intrigued by
how many of my peers were open to pursuing
well-structured RCBI solutions as an effective
hedge, an insurance policy of sorts, to sustained
political and economic instability. Their
primary reasons varied from a desire to preserve
their enhanced standard of living, to ensure
uninterrupted access to the best healthcare
providers, to eliminating the personal and
professional drawbacks caused by extremely
limited global mobility resulting from the US
passport’s lack of visa-free travel privileges.
Drop in Passport Power
At the top of my list of “things I never thought
would ever happen…” I would likely have
placed witnessing the rapidly escalating
deterioration in the power of the once allmighty
blue American passport. For as long as
I can remember and as recently as 2015, the US
passport was ranked as the #1 passport in the
world. However, a never before seen drop in
the passport’s global standing this year and the
sudden and unexpected lack of international
mobility in terms of visa-free international
business and leisure travel has encouraged
many to look for alternative solutions. For
example, at the beginning of 2020, an American
passport holder could travel to 185 countries
without the need to secure a visa in advance.
As of September 2020, this number shrunk to
fewer than 75 countries, a global ranking placing
the US slightly behind Botswana (no offense
to my Tswana-speaking friends.) When future
pandemics and other global disruptions strike,
those with the foresight to invest in RCBI assets
will be best placed to weather the storm.
Rogelio Caceres
BIO is the Founder and
CEO of RCG Global,
the first US-headquartered
investment firm solely
focused on the development
of the US-outbound RCBI
business. Prior to RCG,
Rogelio was the co-founder
of LCR Capital Partners
where he led the pursuit of
an audaciously contrarian
strategy focused on
greenfield development
of new investor markets
(e.g. India, Brazil and South
Africa) and ultimately
raising $200 million from
sophisticated U HNW
investors residing in 30
countries around the
world. Rogelio earned
an MBA from Harvard
Business School and a
BSE from the University
of Michigan, Ann Arbor.
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