Business Person of the Quarter – Tom Gibian, Emerging Capital Partners
Africa Journal (Washington, DC)
COLUMN
28 July 2007
Posted to the web 28 August 2007
Washington, DC
Tom Gibian, Chief Executive Officer of the international private equity firm Emerging Capital Partners (ECP), is the Summer 2007 Business Person of the Quarter. ECP is the first private equity group to raise over $1 billion for investment in companies across the African continent. At $523 million, ECP’s recently closed fund, the EMP Africa Fund II PCC (Africa Fund II), is the largest private equity fund ever raised for investments across the African continent. It is the fifth fund managed by ECP in addition to Africa Fund I, the West Africa Growth Sicar, the Central Africa Growth Sicar, and the Moroccan Infrastructure Fund. Over the past seven years, these ECP-managed funds have made more than 35 investments in 30 African countries.
According to Gibian, the key to ECP’s success in Africa is not only a sound understanding of the investment landscape in Africa, but the company’s “information gathering infrastructure” on the Continent.
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Sixteen of the 25 ECP staff members reside in Africa, and it is this network of “on the ground intellectual capital,” that gives ECP unparalleled insights into the region’s businesses. ECP operates from offices in Washington, D.C., Abidjan (Cote d’ Ivoire), Casablanca (Morocco), Douala (Cameroon), Johannesburg (South Africa), and Tunis (Tunisia.)
When ECP first began investing in Africa, “we found that the funds were somewhat small and that it was not commonplace for other investors to use a disciplined approach when selecting portfolio companies,” Gibian said.
The key for ECP was to get its funds to the right size for Africa, and to use proven private equity methodologies that have worked throughout the emerging markets. Gibian cited “rigorous due diligence, a focus on exits, and an insistence on world class governance” as key components of ECP’s approach.
“We apply these same principles to African commercial enterprises and have found that the companies we invest in typically produce above market returns that are uncorrelated to other global economies,” Gibian added.
Gibian emphasized that African companies are held to the same standards of governance and transparency as other companies in any other market.
The ECP investment team has screened thousands of investment opportunities throughout Africa. Its investments focus on some of the highest growth sectors in Africa-such as financial services, telecommunications, agribusiness, and natural resources. “We focus on sectors where Africa has a comparative advantage or where Africa has typically lagged developed markets. ECP can then play a variety of roles from a pure financial investor to a co-developer prior to entering the business, providing anything from executive recruiting and financial advisory services, to active board representation and strategic guidance on exit opportunities. This strategy has resulted in significant opportunities for growth and strong returns for our investors,” Gibian explained.
Many of the companies in which ECP has invested in the past have been successfully exited through sales to strategic and financial investors, listings on regional exchanges, or through structured, pre-agreed exit mechanisms. The recently closed Africa Fund II focused on larger markets such as Nigeria, South Africa, Egypt, and Kenya with a focus on telecommunications, natural resources, financial services, agribusiness, transportation and utility businesses. This fund received strong support from investors in ECP’s previous funds, as well as new investors that include pension funds, financial institutions, foundations, high-net-worth individuals, and development finance institutions.
“Several investments have already been made, including Anvil Mining Limited (Democratic Republic of Congo), Ecobank Transnational Incorporated (Pan-African), Spencon International Limited (East Africa), Continental Reinsurance Plc (Pan-African), Notore Chemical Industries (Nigeria), Artumas Group Inc. (Tanzania and Mozambique), and Bank of Africa (Pan-African). Gibian believes Africa has been generally overlooked, thereby creating significant growth opportunities. “In addition, there is a strong impetus for capital in African markets, where the demand for investment far outweighs the supply,” Gibian stated. “Africa is a vast continent with 53 countries, a fresh and exciting entrepreneurial spirit, and the world’s highest economic growth rates in recent years,” Gibian concluded. -
ECP has been investing in Africa since 2000. Gibian currently also serves as a Member of the Board of Directors for CCA.
http://www.ecpinvestments.com
