Published · 6 min read
How We Pick Assets
Olara exists for one simple reason: We believe people should be able to own things that make money.
The short answer
Olara exists for one simple reason: We believe people should be able to own things that make money.
A house can collect rent. A solar plant can sell electricity. A billboard can sell advertising space. A data centre can charge for computing. These are productive assets. They are physical things that provide something people need and make money by doing it. Olara finds these assets, helps finance and manage them through trusted operators, and makes it possible for people to own a share of them. But we don't put just any asset on Olara. We have a simple way of deciding what is worth owning.
We look at the asset first
When people talk about investments, they often start with the return:
“How much will I make?”
We start somewhere else:
“What is making the money?”
If an asset is going to produce income for its owners, we want to understand exactly where that income comes from. Who is paying? What are they paying for? How often do they pay? How much does it cost to keep the asset running? How long can the asset keep producing income? And if we ever need to sell it, is there something real that someone else would want to buy?
The answers to these questions matter more to us than a number on a screen.
People already need it
We prefer assets that provide something people or businesses already pay for. Electricity. Internet. Storage. Advertising. Housing.
We don't want to depend entirely on convincing someone that they will want the product someday. Existing demand is easier to understand than future demand.
It should make money regularly
We prefer assets that can generate income every month or quarter. A solar plant, for example, can generate electricity every day and collect payments for it.
That is different from buying something and simply hoping its price goes up.
We want the asset to work.
The income should be predictable
Making money once is not enough. We want to understand how consistent the income is.
If an asset generated ₦10 million last month but there is no reason to believe it will generate anything next month, that is not the kind of asset we are looking for.
We prefer assets where the income can be estimated with reasonable confidence. Predictability matters more than a big number.
The costs should make sense
Assets cost money to operate. There may be maintenance, electricity, insurance, repairs, staff, taxes or other costs.
We look at what it costs to keep an asset working and compare that with what it earns.
The goal is simple:
More money should come in than goes out.
And we want that difference to remain healthy over time.
We should be able to see how it is performing
We don't want to own assets that disappear into a black box. Where possible, we want to be able to monitor things like:
- How much the asset is being used
- How much money it generates
- What it costs to operate
- Whether customers are paying
- Whether the asset is still working properly
It should last
We are not interested in assets that make money for six months and then become useless.
We look for things that can keep providing value for years. A good asset should have a useful life that is much longer than the period in which an owner expects to recover their original investment.
We want the asset to keep working after you have already recovered your original money.
There should be something real underneath it
When you own an asset through Olara, there should be a real piece of infrastructure behind that ownership. If the asset stops operating, the asset itself should still exist.
That means we think about what the physical asset is worth, how easily it can be maintained, and whether another person or business could eventually buy it.
We don't want returns that exist only on a spreadsheet.
Other people should be able to own it too
Many useful assets are simply too expensive for one person to buy alone. A ₦1 million solar plant might be affordable for five people together even if it isn't affordable for one person.
That is where Olara comes in.
We can divide the ownership of an asset into smaller pieces so that more people can participate. You don't have to buy the whole infrastructure. You can own a piece of it.
Income before interest
This is the most important part of how we think.
We don't begin with:
“Can we offer a 30% return?”
We begin with:
“Can this asset reliably produce income?”
If the answer is yes, we work backwards. We look at what the asset costs, how much it can earn, what it costs to operate, how long it should remain productive, and what the ownership should be worth.
The return an owner receives should come from the economics of the asset.
Not the other way around.
This is why we prioritize predictable income over attractive numbers. A high return from a weak asset is not necessarily better than a lower return from a strong asset.
Why we are building Olara this way
We think investing should be connected to the real world. When you own part of a solar plant, there are panels producing electricity. When you own part of a building, there is a building providing space. When you own part of a data centre, there is infrastructure providing computing.
There is something underneath your ownership that people actually use. That creates a different relationship with your money.
Instead of only asking: “How much will my money become?” you can ask: “What does my money own?” and: “What is that thing producing?”
That is the idea behind Olara. We find productive assets. We help put them to work. We make ownership accessible to more people. And as those assets produce income, their owners participate in the value they create.
Because we believe wealth is ultimately built by owning things that create value. Income creates wealth. Assets create income. Olara makes those assets easier to own.