Eric Guichard, the former World Bank official and veteran emerging markets investor recently launched Homestrings.com, an online platform that encourages African émigrés to invest in their home region, primarily through private equity funds. Based in the US, Homestrings helps wealthy private investors tap into investment opportunities across a range of sectors including infrastructure, housing and healthcare.
The business also hopes to encourage investment into public-private partnerships and sovereign debt through diaspora bonds.
It is in talks with two African central banks and one in the Caribbean about their issuance of these securities through its platform.
Homestrings acts as a fund of funds platform by pooling and allocating investors’ money into selected investment funds run by the likes of Actis, TLG Capital and Insparo Asset Management.
It provides would-be investors with key information about the funds, enabling them to perform due diligence online. Next they fill in a questionnaire stating their investment preferences and criteria.
Homestrings then aggregates and funnels the money to the funds. Investors can also track the funds’ performances through the portal. The minimum investment is $10,000.
Guichard, whose father is from Guinea, says the idea for the business came from his own frustrations with trying to invest in Africa. “Investment vehicles are either targeted to institutional investors, such as private equity funds, or they are mutual funds, which are amorphous. There was nothing for professionals like me,” he says.
Guichard adds the African diaspora is keen to invest in the region.
Remittance flows from Africans abroad total $40 billion a year – a figure that is growing by 15% a year.
“A portion of that money is seeking investment opportunities but their experience has been dismal,” he says. “There’s a big gap between intent and realization of investment.”
The African diaspora in the west is about 23 million people, holding $35 billion of savings.
“The professional African diaspora is very sophisticated,” says Guichard. “In excess of 50% have second degrees, while 30% are entrepreneurs and 10% have PhDs. Seventy-nine per cent look to the web for formation and investment opportunities. Their average salary is more than $150,000.”
Guichard already runs investment company, Gravitas Capital, which he founded in the late 1990s and which works mostly with developing countries.
The advisory board of Homestrings includes Sharon Pratt, former mayor of Washington DC.