Carlos Santos is an award-winning entrepreneur and a financial instruments specialist. He is currently the CEO and Chairman of Ethos Group, where he runs the Group in 72 countries and eight global offices and is directly involved in two business areas of the company: financial trading and project financing. Before Ethos, Mr. Santos worked at the Banco de Portugal (BdP), holding positions in the Monetary and Financial Statistics Department and the Centralization of Credit Responsibilities Sections of the Statistics Department. To date, he continues to teach at the ISEG as the visiting Lecturer and Professor of Economics.
Through the course of his remarkable academic and professional trajectory, Mr. Santos has been a recipient of numerous prestigious awards such as the Men Leaders to Look Upto Award (2021), the Africa Dubai Honours Award for Excellence and Leadership Prowess (2021), and the Ernst & Young Award: Best Economist (2016), and Banco de Portugal Award (2015).
Early Lessons that Helped Shape into a Successful Entrepreneur
Mr. Santos was not the most active or brightest student during his school years. Like every other child, all he wanted to do was play. School teachers complained about him, but his parents felt that time would change him, and he would become more settled and focused with age. The pressure of others growing and becoming more mature faster than Mr. Santos did not worry them. This indeed turned out to be true. As time passed, Mr. Santos began developing into a bright student and, at university, an amazing one. “This helped me learn an important lesson in business; everything takes time to become mature. Businesses and companies, like people, need time to grow and time to become mature. We cannot become desperate when this takes more time than others,” states Mr. Santos.
Mr. Santos earned a bachelor’s degree in economics, a master’s degree in finance, and certifications in banking accounting and international taxation, with his most recent specialization in financial instruments. He calls the university experience pivotal because it gave him the foundation of knowledge that allows him, as a business leader, to navigate different markets and industries and be comfortable guiding any negotiation within his business even now. He adds, “I feel that I learned how to overcome problems that I face, and I will be able to fight them as if it was the exam I took more than one decade ago.”
Ethos Group’s Inception Story: From Humble Beginnings to Phenomenal Success
It all began when Mr. Santos was studying and teaching at the ISEG, Lisbon School of Economics and Management. At the same time, one of his current partners was also a professor at the University with whom he shared a great rapport. One day, Mr. Santos was in the office, preparing for exams, and his colleague, who later became his business partner, saw him working on some of the numbers he was achieving with experimental trading using the algorithm. His colleague was spellbound and wanted to know more. After Mr. Santos showed him how the algorithm worked to a much deeper level, his colleague was confident that, together with Mr. Santos, they could generate large profits. Backed with a strong network with access to the biggest investment firms in the USA and Europe, he told Mr. Santos that he would organize meetings in New York with some investment companies to see if they would like to operate the algorithm. In no time, Mr. Santos traveled to the USA to show what he had developed.
In the first meeting with one of the biggest investment firms in the world, the client team was immediately interested after seeing the track record of the achieved results. Without missing a beat, they made a proposal to acquire the algorithm. Here, we are talking about millions of dollars that neither Mr. Santos nor his colleague had seen in their lives, which is not the case now, but it was the biggest deal for them then. They say one of the major components in any entrepreneurial journey is negotiating for your business, which is precisely what Mr. Santos did. He refused to sell the algorithm, but here’s the thing; he was ready to lease the same. Soon, Mr. Santos and his colleague began leasing the algorithm with a royalty structure that was a percentage of the Assets Under Management (AUM) they held plus a portion of the profits.
In 2012, after returning to Portugal, Mr. Santos and his partners incorporated the company with a team of three in a small room with a sofa and one desk. When they started to make profits from trading, they understood that their returns were short-term, volatile, and a result of high-frequency trading. Mr. Santos and his partners soon started thinking about optimizing their asset allocation to guarantee that the portfolio of assets was efficient and maximized in a Pareto logic. They then realized they needed to invest in a different industry from the financial market. They understood that Project Financing could bring them a long and fixed return to hedge and rebalance their asset allocation in trading. This was why Mr. Santos and his partners began to offer project financing.
Presently, Ethos Asset Management Inc. provides debt financing with uniquely favorable terms designed to allow select companies with impactful projects to invest in themselves and fuel their future success. Ethos, under Mr. Santos’ leadership, has successfully delivered 87 financing transactions in 72 countries over the last decade and is now aiming towards solidifying its position in North and Central America and South America, continue making footprints in Africa and Europe, and strongly beginning to explore the South of Asia.
A Notch above the Rest
One factor that sets Ethos Group apart from its competitors is its model, a rare combination of financial trading, backing, and supporting project financing. Moreover, the collateral structure allows the company to analyze the risks of projects from a different prism than normal investors and also to invest in projects differently from its competitors.
Apart from this, Ethos believes the most impactful projects have both profit and purpose. Because when the right project finds the right model of financing and support, the positive impact can be felt far and wide – in return on investment, the jobs created, and communities transformed.
Innovation is in Ethos’ DNA & Culture
Innovation is what led to the genesis of Ethos’ creation and model. The company has created a unique model called project financing by joining/merging financial trading and project financing, which is more competitive than the average on the market. At the same time, its algorithm of trading is unique and an innovative technology where it trades with two major differentiations of the market.
“We use a structure of collateral that is unique using financial guarantees and instruments, not only to secure investments but to trigger returns to us,” mentions Mr. Santos. “These three prisms form the basis of Ethos’ model, and the three joined together are the perfect definition of innovation.”
Moreover, Ethos created the Philanthropic Financing Facility, a unique win-win situation with a finance potentially being converted into a grant. This guarantees that clients develop the community benefits they promise, and Ethos has an inevitable return of its capital while making a valuable grant impacting local communities. This proves that Ethos’ culture has always focused on being ambitious and courageous to embrace this endogenous process of changing and adapting through innovation.
A Well-Balanced Working Environment
For Mr. Santos, it is very important to understand the goals of his team members, what makes them wake up every day, and what makes them fight, apart from the obvious financial gains. “I need to understand the goals of my team members because this guarantees that they are aligned with the goals of Ethos,” shares Mr. Santos. “When we explain the goals of Ethos and our targets, we always try to see if each individual of our team is aligned with them and feels engaged and ‘owns’ our goals.” This is mandatory to be able to have a motivated team.
And there is more. Every week, in fact, every day, Mr. Santos obliges the Ethos team to provide feedback on what they have developed and compare that to their established goals. In addition, Mr. Santos considers providing constructive criticism as important as positive feedback. This becomes a basis for establishing reward systems and incentives that makes team members feel more embraced by the company.
In terms of upskilling employees, the Ethos Group provides opportunities for its people to develop themselves via more information, travel, and presence across the globe in its offices and with the company’s stakeholders. Most importantly, the flexible working environment of Ethos allows employees to strike the right work-life balance.
Addressing Exogenous & Endogenous Challenges
From clients deciding to stop leasing the algorithm and passing the trading risk to the arrival of the COVID-19 pandemic to the war in Ukraine, external crises such as these affected the banking system. Having a foresight since the company’s inception and considering the world events, Mr. Santos and his partners were always a step ahead. They were trying to find a collateral structure that would not rely on credit lines, with their banks needing to be triggered by SBLCs or for Pledges. This gave rise to the birth of Worldwide Pledge in 2020, a structure totally independent of the need for credit limits to the Ethos Group or its clients.
For Mr. Santos, the endogenous challenges, mainly the human resources, are considered more possible to work with and overcome. However, keeping the best talent engaged and aligned with the company’s objectives and goals is difficult. “This is mandatory in a new ecosystem where changes happen every day, and if we are not ready to attract and maintain the best, it’s easy to lose our direction,” shares Mr. Santos. “To prevent this from happening, we must guarantee that everybody, independent of culture and language and jurisdiction, can understand Ethos the same way we do.”
Despite these challenges, what truly makes Mr. Santos an inspiring and successful business leader is his ability to rise like a phoenix from the ashes and refuse to give up. This quality is evident from every step, every move, and every decision that Mr. Santos has made and continues to take in his life.
Three groups of years define Ethos Group’s story, which in turn, defines three critical moments that allowed Mr. Santos and his team to adjust to the environment of the times. Between 2012 and 2014, investors and investment funds sought out IHNCAM Advisory to rent Ethos Group’s trading algorithm by placing the plugin into their brokerage accounts. With the profits they generated, they paid Ethos Group a percentage value. They assumed the volatility risks of trading operations. Between 2015 and 2017, investors issued Capital Investment and Management Agreements to IHNCAM Advisory, allowing the resources to remain in Ethos Group’s hands. Since 2018, IHNC has evolved into Ethos Asset Management, which trades exclusively with its accumulated resources. Hence, these three moments are critical to Ethos Group’s source of wealth accumulation. Likewise, making his first USD 1 million is extra special for Mr. Santos, not only because of his age but how he did it.
Apart from this, Mr. Santos considers the development of Ethos Group’s Philanthropic Financing Facility as another remarkable milestone. Similarly, Ethos Group marking its footprint in USA, Turkey, and Brazil is monumental. Being able to open two massive regions of the globe, especially during the pandemic, that now is in the top 5 and top 3 of markets makes Mr. Santos incredibly proud.
A Day in the Life of a Leader
Mr. Santos devotes 20 hours every day, 7 days per week to sometimes even working 24/7. He believes that if entrepreneurs and leaders need to turn a business into a successful one, they must live it all day. They need to think about the business all day, every single moment. It is only such dedication that opens the door and creates great opportunities, and when they appear, this type of approach allows them to be able to secure and take the opportunities.
If Mr. Santos is not traveling, which he does almost year-round, he begins working around 8/8:30 am till 2.00 am of the following day with back-to-back in-person and online meetings with clients, banks, traders, and associates, responding to multiple emails, and attending calls. When he is in Europe at the office in Istanbul, Lisbon, or London, he usually uses the early morning hours to answer as many emails as possible and devote afternoons to more calls and meetings.
With great responsibilities comes decision-making, and when it does, Mr. Santos prefers to sleep on the subject to make a better decision the next day, preferably in the early hours of the day. When it comes to staying calm under pressure, Mr. Santos reminds himself that before he went into the world, the world existed, and after he dies, it will continue to exist. With that spirit, he tries to reduce the importance that some subjects appear to have. “This is important to remember every day because this allows me to allocate some time to handle it and time to understand that even a bad decision will not necessarily be the end but only a bad decision,” mentions Mr. Santos. Likewise, his mantra to relax and unwind from work is gazing at the sea & ocean, exploring nature, enjoying different cuisines, taking a leisurely walk, listening to classical music, attending a concert, and traveling.
Working Towards Revitalizing & Reinventing Ethos Brand
Mr. Santos and his team are working on some exciting & impactful projects on Energy, Infrastructure, and Agribusiness centered in North and Central America, South America, Africa, and Europe. On this topic, Africa has amazing projects like the Macusa Port in Mozambique or the Beef Industry in Zimbabwe that Mr. Santos and his team are very honored to be involved in. Such projects impact thousands of people directly and indirectly, potentially millions in the country and surrounding areas. These are the projects that Ethos aims to be involved in and wishes every day to be able to fuel the future.
Furthermore, Mr. Santos is leading efforts toward working on the group’s restructuring to optimize and be aligned with the regulations and legislation of each country. For the medium term, Mr. Santos plans on automating and digitalizing all the onboarding processes of Ethos’ project financing structure. “One of my current great goals is turning this business from a variety of net working capital to negative. This is a great challenge because it is an industry and structural issue turning the business into a negative variation of net working capital. Although this is being achieved month by month, we need to now make it sustainable and a recurrent reality,” shares Mr. Santos.
Aiming to Make 2023 the Best & Historic Year
With things returning to normal post-pandemic, the team at Ethos Group is organizing quality tours in each of the 5 continents where they can train Ethos Group’s associates and be closer to them. This proximity will allow the team to pass more accurate information and guarantee that all their communication in the market in each jurisdiction is consistent, resulting in the delivery of higher quality projects and achieving ambitious monthly targets.
“Last year was extraordinary, and we exceeded our highest expectations right at the eleventh hour,” states Mr. Santos. “But we are sure that now, more than ever, we are capable and strong enough to achieve extraordinary results.”
For more info: https://www.ethosasset.com/