Visagie’s new game plan for the continent
COBUS Visagie recalls making 18 tackles the day the national rugby team kicked its way into the World Cup record books to defeat England. Now, after swapping his boots for banking, the exSpringbok is chasing investor cash for his first Africa investment fund.
The 41 year old has partnered with Jonathan Kruger, a former money manager with Prescient, to raise $150 million (R1.7 billion) for the Africa Merchant SubSahara Fund. That puts them in a field that already includes the likes of Templeton Emerging Markets Group’s Mark Mobius, Goldman Sachs and BlackRock, which are buying into the world’s fastest-growing developing market outside Asia.
“When you start out as a rugby player, it’s quite daunting,” Visagie said last month. “You meet the older guys of the game and you have to compete with them. In the same way, it’s what we’re doing at the moment.”
Funds are springing up in the sector as African stocks beat average returns in emerging markets, and bourses try to spur initial public offerings (IPOs) to boost trading. At least 19 funds focused on Africa started business in 2014, compared with 15 in 2013 and nine the previous year, according to data.
The MSCI emerging frontier markets (EFM) Africa index, excluding South Africa, returned 33 percent in the five years to 2014, compared with 11 percent for the MSCI emerging markets index.
It is not all blue skies when investing in Africa, as shown by a slide in Nigerian markets amid a drop in oil prices. The Nigerian Stock Exchange all share index lost 13 percent this year after a 16 percent decline in 2013, which followed a rally of about 80 percent over the previous two years. The gauge has posted annual losses in four of the past seven years.
The naira has weakened 20 percent over the past six months, the most among 24 African currencies tracked by Bloomberg.
Private equity
Visagie, whose rugby position as tighthead prop was to support the side of the scrum, quit the sport in 2009 after ending his career at London-based Saracens. Three years later, he helped start Africa Merchant Capital, a corporate-finance business headquartered in the city.
He was involved in finance before a career in professional rugby. After completing his Bachelor of Commerce degree from the University of Stellenbosch with honours, Visagie became a chartered accountant and worked for PwC for seven years until 2003, when he moved to England. He later joined Templewood Merchant Bank, where he was the principal for Africa.
“I’ve invested in African businesses in the time I was playing rugby as well,” Visagie said. “I invested as a private equity investor in businesses operating in subSaharan Africa, in real estate, aviation and agriculture.”
The former player’s enduring memory of the 29 times he played for the Springboks was the 44-21 victory against England at the Stade de France, Paris, during the 1999 Rugby World Cup.
The forwards had “drilled England into submission”, he said, giving flyhalf Jannie de Beer room to kick over a record five drop goals, according to ESPNscrum.com.
Visagie’s company expanded into money management in December with its Africa Merchant Sub-Sahara Fund, which had already bought stocks in Nigeria, Ghana, Kenya and Botswana, Visagie said.
He declined to give details on how much they had raised.
The fund is limiting its size to ensure it can buy less-traded shares after sifting through potential targets, analysing the companies and the markets in which they operate.
“We don’t invest thematically or from a macro view,” Visagie said. “It’s a fundamental bottom-up stock selection.”
Kruger, 30, started an Africa fund for Cape Town-based Prescient in 2011 before travelling across east and southern Africa for two months and joining Visagie in September 2013.
The Prescient Africa Equity Fund returned 48 percent in 2012, compared with 43 percent for the MSCI EFM Africa index, excluding South Africa, according to data.
Sub-Saharan Africa will probably expand 4.9 percent this year from 4.8 percent in 2014 and compared with a global outlook of 3.5 percent for 2015, according to the International Monetary Fund. – Bloomberg