Roar writer Alessandro Kosak on how an International Relations student from LSE is revolutionising the secretive political risk industry
As students we have all been there; the endless rejections from potential internships where the required qualifications seem to get more and more demanding each year. Endless application processes reduce you to a couple of sheets of A4 paper, slowly chipping away at your motivation. The lucky few who do manage to secure an internship are rarely accepted into their first choice of firm or even industry.
Manas Chawla was in this exact position. As a second-year International Relations student at the London School of Economics (LSE) and extremely passionate about his subject, he began to wonder how he could apply the skills he was learning in his course to a stimulating career. So he looked at his options. While well-equipped with extensive practice in international policy and relations, he wasn’t interested in the normal avenues of diplomacy, academia and finance. Then, he discovered the niche industry of political risk through the Political Risk and Investment society at LSE, of which he is now president. Political risk is an opaque sector of international business that requires in-depth analysis of the potential political exposure of investments in different countries or regions.
After Chawla’s introduction to the industry, he quickly realised an issue with it from a graduate perspective. He emailed 70 to 75 firms to get an internship last year and due to the lack of transparency, there are hardly any formal application processes. He managed to secure an internship at a startup, advisory firm called Prism based in New York, which he says gave him great experience and knowledge of “the ins and outs of the industry, and what it was like behind the curtain actually advising these companies”. Although he was rewarded for his persistence and previous experience, he recognised that the majority of professionals in the industry already had well-established careers.
“If you go on LinkedIn and look at anyone who works in this industry it’s going to be someone with decades worth of experience in journalism, law, academia and politics [etc.], who then transition into the industry using their already large Rolodexes”. This was a key goal of London Politica, Chawla’s startup firm: democratising the industry of political risk. The goal was to provide an avenue for capable students interested in a growing and stimulating industry that lacked opportunities for university graduates.
The second major issue that Chawla recognised within the industry was the lack of representation for smaller firms that depend on political risk assessments for their continued operation and expansion. “It’s (political risk) very siloed in its clientele base. If you think of the big firms, of which we have subcontracted a lot of work, all of them almost entirely work for big financial institutions, large corporate bureaucracies and Fortune 500 companies.” Chawla estimates that this constitutes only around 5-10% of the market, leaving smaller to medium-sized firms such as NGOs and other social enterprises completely unserved.
This market gap with NGOs is key to London Politica’s value profile. I spoke to Alexandre El Ghaoui, London Politica’s Chicago-based Head of Business Development, who said the key to London Politica’s blistering start has been the identification of the pro-bono market. “Big firms service mainly big-money contracts,” he said, meaning London Politica doesn’t have to outright compete with the large, established political risk firms. I asked El Ghaoui whether there were any plans to monetise in the future, but he said that one of the main aspects of London Politica’s value profile was the offer of pro-bono work and monetisation would not be possible in the current climate.
This was one of my main considerations when researching for this feature. London Politica is entirely student-led. Although there are several prominent board members, the agenda and day to day operations are established by the students themselves. There are over 100 employees spread over 25 countries, most of whom are students or graduates from top universities having to juggle their own degrees with the considerable work that they put into London Politica. It proves, if nothing else, how driven, motivated, and creative students are.
El Ghaoui said that the pandemic had in many ways benefited London Politica because of how international the firm is already. Students all over the world have adapted to online learning, and those working for London Politica are no different. They have a strong operational structure with El Ghaoui and his team implementing KPIs (Key Performance Indicators) to help develop and implement London Politica’s long term strategy. “I haven’t met Manas face to face, yet I consider us very close,” El Ghaoui said, which is incredible considering how successful London Politica has become in the short space of a year.
I asked Chawla whether or not being completely student-led had perhaps made things difficult in terms of industry acceptance. He said that youth was central to London Politica’s value proposition. “We are not trying to replace the existing political analysts or institutions, we are trying to reinvent the industry frankly. We really understand the problems that actually impact you. No business these days cares about the Cold War yet the people who advise them made the bulk of their professional experience of the Political risk explosion in the 1990s. We understand climate, ESG (environmental, social and governance), crypto”.
Although students are central to London Politica’s philosophy, Chawla has also stressed the importance of the board in navigating future development. The board is made up of high-level industry professionals ranging from technology startups to academics to political risk experts, who all offer their advice and extensive knowledge to London Politica. So how does London Politica go about attracting clients and who have they worked for? El Ghaoui and Chawla both mentioned the importance of “elevator pitching”. El Ghaoui mentioned that recruitment of clients involves a lot of cold-callings and essentially fine-tuning their value proposals.
One of their main selling points has been their methodology in assessing political risk. London Politica has fine-tuned their modus-operandi through consultation of industry experts, and it is based on what is called an open-source methodology in the intelligence community. It essentially entails the use of qualitative and quantitive publicly available data through collection and analysis in order to make decisions. London Politica’s analysts trawl through said data, using an analytics platform called reKnowledge with whom they have partnered. They then apply the relevant data to ascertaining which areas their client may have potential risk considering their objectives and region.
Once a firm has agreed to a meeting, a detailed pitch is created for the client, a process which Chawla says is integral to managing client expectations. It is just as important for London Politica to make sure they can provide a robust service to the client as it is for the client to agree to partner with them. It’s then crucial to specify where exactly the client is exposed rather than simply doing a report on the political risk of the entire country. This often involves a futurist analysis of around 10 years which is always a challenging task. London Politica’s over 70 analysts are all students or graduates from a wide range of universities, specialising in a number of different degrees and geographic regions, who all have extensive academic experience allowing London Politica to work with firms all across the world.
This recruitment and screening process has worked. They have a number of high profile clients. For example, they have been helping the Confederation of Indian Industry (CII) navigate India’s complicated relationship with a post-Brexit Britain, as well as consulting on how the CII can improve on ESG (environmental, social, governance). But their most impressive client has come in the last few weeks; Global Citizen, an international advocacy NGO which works to reduce poverty and inequality and protect the planet. They are a huge NGO that recently hosted a VAX Live Concert which raised $302 million in funding for over 26 Million Covid-19 vaccine doses for the worlds most marginalised communities. (https://www.globalcitizen.org/en/content/vax-live-impact-report/?template=next)
Those are only a few of their prominent clients, the London Politica podcast also has a wide range of interviews with top academics and industry professionals. It’s easy to forget that the firm is barely a year old and entirely run on part-time student workers. All in all, Chawla and the London Politica team have achieved what they set to do. They offered an avenue for students and graduates into a previously secluded industry and got an enthusiastic response, to say the least. They received 500 job applications in two weeks and have given many accomplished and driven students valuable experience that otherwise would not have been available to them. They have also democratised the industry for political risk clients, by representing social enterprises and NGOs, among others, providing quality work pro-bono, which these clients depend on and could otherwise not afford.
Many thanks to Manas Chawla and Alexandre El Ghaoui who provided invaluable insight into London Politica to Roar.
For more information on London Politica see their website here.