Monday, September 6, 2010

Live Aid Rocker to Launch PE Firm Focused on Africa

Heavy money is pouring into Africa. Some in unexpected ways. FT reports on one unexpected investor group:
There are plenty of fund managers who want to be rock stars. Now, there is a rock star who fancies himself as a fund manager.

Bob Geldof, the singer and campaigner for aid to Africa, is seeking to raise $1bn from institutional investors for a private equity venture on the continent.

The pitch he is making represents a remarkable shift into African business for a man more often associated with his relentless advocacy for debt relief and aid to Africa.

Should he launch the fund successfully, it would be among the largest in a wave of new private equity ventures seeking to capitalise on resurgent economic growth on the continent.

Among other pledges towards the fund, the African Development Bank has earmarked $50m. The International Finance Corporation, the World Bank’s private sector arm, has offered a similar amount. Mr Geldof also committed an undisclosed amount of his own money.

A person familiar with the project said Mr Geldof aims to use the profile he has built on the continent in the 25 years since he spearheaded the Live Aid appeal for victims of the Ethiopian famine, and high level contacts he has, to raise funds and secure deals. He would not be involved with day-to-day management.

The fund would be run by Mark Florman, a former executive at UK buy-out house Doughty Hanson, who has recruited experienced Africans to work on the venture.

“Sir Bob has got fantastic connections. He is there because he knows something about Africa and can get people to sit up and take notice,” said another person familiar with his plans.

The fund, called 8 Miles, intends to make about 20 investments of between $15m and $80m in agribusinesses, financial services and telecommunications. Mr Geldof hoped to launch the venture as early as two years ago but plans have been delayed by the global financial crisis and the fund has yet to hold a first close, which would secure money to start investing.

Among others that Mr Geldof has approached for advice on the venture are Mo Ibrahim, the Sudanese-born telecoms tycoon turned philanthropist, and Arki Busson, the founder of hedge fund EIM. He has also discussed his plans with Tony Blair, the former British prime minister who sits with Mr Geldof on the Africa Progress Panel, monitoring donor commitments towards increased aid to Africa.
Many Americans are considering parts of South America as a place to relocate. This is not a bad idea, but for the more adventurous Africa should not be ruled out.

If you have already made your $$$$, South America may be the way to go. If you are still looking for the big score, Africa may be the answer.

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