A newly formed $120 million equity fund, New Africa Opportunity has been established to channel direct investment into privately owned businesses in southern Africa. Managed by New Africa Advisers Inc., a subsidiary of the Sloan Financial Group, the fund is backed by an $80 million credit guarantee from the Overseas Private Investment Corp. (OPIC) plus another $40 million raised by the seven institutional investors who compose New Africa.
“Our plan is to invest in the $5-$18 million range, and our goal is to provide a return of at least 30% per annum to our investors,” says Justin Beckett, president and CEO of New Africa Advisers. “Because we’re investing in private companies, we would target at least those levels because we’re talking long-term equity positions. We’re not looking so much at being restricted by the size of the company, but by the equity amount available for investment,” he adds. The fund will not only invest in those companies, but have representation on its board of directors.
Sloan Financial Group CEO Maceo Sloan says the purpose of the fund is to take advantage of the unbundling and privatization of state- owned conglomerates occurring within southern Africa as they re- enter the world marketplace. The biggest opportunities lie in South Africa.
“The South African government owns about $12 billion worth of companies, and we think there will be tremendous opportunities there,” adds Sloan, “so we’re looking at some corporate re-entries into the marketplace that we think have a good chance of succeeding.”
New Africa is utilizing a team of African investment professionals to select companies that show proven management success in construction, telecommunications, financial services, health care and consumer products to help them go after deals. The fund plans to direct 70% of its investment into companies in South Africa; the remaining 30% is targeted to other countries in the SADC region including Angola, Botswana, Lesotho, Madagascar, Namibia, Swaziland, Tanzania, Zambia and Zimbabwe. For more information, call 919-688-0620.