Two African banking heavyweights launch investment platform for the continent

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By:
Olivier Holmey
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New African Capital Partners’ (NACP) first investment target is a large, regional banking group, co-founder Charles Kie tells Euromoney in his first interview since the launch.

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Charles Kie, NACP

Charles Kie, formerly of Ecobank, and co-founder Paulo Gomes, formerly of the World Bank, on Wednesday announced their launch of pan-African investment platform NACP.

Its aim is to help grow small and medium-sized enterprises across Africa, as well as larger financial institutions, with funding sourced largely from investors based on the continent.

NACP’s first investment target is a “large” banking group already present in several countries across western and central Africa, Kie tells Euromoney. The potential acquisition of a majority stake in that group, whose identity Kie would not disclose, would likely cost NACP several hundred million dollars, he says.

The bidding process is at an advanced stage, and NACP has the funding to pull it off, Kie adds, though on the source of funds he again would not provide any further information.

NACP will invest anywhere between several million and several hundred million dollars in each company it buys into, with the aim of acquiring a majority stake in each case and staying invested for at least five years, Kie says. The funding will come largely from investors on the continent, but also from further afield, including Asia.

NACP will not follow a private-equity model, but rather draw up a list of African companies with substantial growth potential, then look for a consortium of investors to back the takeovers.

Confident

Kie is confident that his and Gomes’s contact books, built over lifelong careers in African finance, are thick enough to source the funds needed to deliver this vision.

To him, this project addresses some of the key business challenges facing the continent. To this day, relatively few African firms fund their growth with local capital, and many multinationals active on the continent are foreign, rather than locally bred.

Kie and Gomes have known each for more than a decade, and have long shared the dream of setting up a firm such as NACP. They finally decided to launch it this year.

“For a long time we’ve been talking about building African champions in various industries, and particular in the financial industry,” Kie says. “Talking is one thing, but doing is better.”


Let me put it this way – there is some room for people like us to make a difference 
 - Charles Kie, NACP

The aim is to enable African companies to adopt the latest technologies, and to grow smaller, single-country firms into multinationals.

It is a project Kie believed in strongly enough to justify leaving his position at Ecobank in Lagos this summer. As head of Ecobank Nigeria, he was tasked with turning around the banking group’s struggling business in that country.

His strategy of drastic cuts in staff – which went from 10,000 to 7,000 – and branches, with 75 closures, served to improve the bank’s cost-to-income ratio.

Before that, he had worked at west African banking group Banque Atlantique and Citi in Senegal and Côte d’Ivoire – all challenging roles.

“I’ve had a long experience of turnaround assignments, with Citi, Ecobank and Banque Atlantique,” he says.

Asked whether such large banks have failed to support the emergence of African champions, Kie tries to be diplomatic, saying: “Let me put it this way – there is some room for people like us to make a difference.”

Focus

In his new role as co-founder and chief executive of NACP, Kie returns to Côte d’Ivoire, as the firm is, at least for now, based in Abidjan. It is, however, incorporated in Mauritius.

NACP intends initially to focus its attention on western and central Africa. The firm has a team of five, but is in the process of recruiting more staff, Kie says.

Gomes has had a career in the public and private sectors, having overlapped with Kie at Ecobank, as well as headed the World Bank’s sub-Saharan division and advised African heads of state.

With regards equity investing, NACP will consider a multitude of sectors, among them finance – owing to the co-founders’ expertise in this area – financial technology and technology more broadly, as well as consumer goods and agribusiness.

Kie says: “Wherever we see upside in value creation, we’re going to go after the good transactions.”

Beyond its equity investments, NACP will also provide trade finance, corporate finance and financial advisory services. It hopes to assist African governments in implementing innovative schemes to raise funds, including green bonds for infrastructure projects.