Entrepreneurship Zone: 12 December 2024: From Kenya to Ghana: Where this investor sees Africa’s best opportunities

Thu Dec 12 09:43:45 CAT 2024

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Entrepreneurship Zone: 12 December 2024:  From Kenya to Ghana: Where this
investor sees Africa’s best opportunities

 <https://www.firstcapitalbank.co.zw/> 

Nimrod Gerber

Interview with Nimrod Gerber
MANAGING PARTNER, VITAL CAPITAL

Lives in: Cyprus

  _____  

Nimrod Gerber is the managing partner at Vital Capital, an investment firm
with a strong focus on sub-Saharan Africa. The firm invests in sectors
including food, healthcare, infrastructure, and water. Jaco Maritz spoke to
Gerber about where he sees the most promising investment opportunities
across the continent.

Topics discussed include:

*	Gerber’s journey to becoming a private equity investor in Africa
*	Harvesting agribusiness returns
*	Tapping into Africa’s water industry
*	Unlocking the affordable housing market
*	Stitching together healthcare opportunities
*	Deals that got away
*	Mistakes made and lessons learned
*	Top African countries for investment

Watch the full interview:

Harvesting agribusiness returns

Food and agribusiness are among Vital Capital’s key investment themes. The
firm’s sweet spot is investing in businesses that collaborate with
small-scale farmers, rather than being primary growers themselves. This
involves supplying inputs to smallholders, processing their produce, and
connecting them to markets.

One of Vital’s successful agricultural investments was in Aldeia Nova, an
Angola-based company. Aldeia Nova operated as an agro-industrial centre,
selling farming inputs such as seedlings, fertilisers, day-old chicks, and
poultry feed to surrounding smallholder farmers. The company also provided
training in modern agricultural practices. Importantly, Aldeia Nova bought
the farmers’ output, processed it where necessary, and sold the finished
products in the capital, Luanda.

Gerber notes that, at one point, Aldeia Nova was the largest egg producer
in Angola and was also involved in milk and vegetable production. He adds
that many of the farmers increased their incomes by as much as ten times.

Vital has since exited its investment in Aldeia Nova. “We have made a good
return. It was a successful investment,” says Gerber, noting that this model
can be replicated in other African countries. Some of Vital’s other
food-related investments, including Kenyan macadamia producer Privamnuts
and Ugandan dairy company Tomosi’s Farm, follow a similar approach of
collaboration with small-scale farmers.

Tapping into Africa’s water industry

An estimated 411 million people in Africa still lack access to basic
drinking water. Water is also one of Vital Capital’s primary investment
themes.

The firm focuses on backing companies that provide potable water,
wastewater treatment, and water for irrigation to corporate clients,
utilities, or government entities. For example, Vital has previously
invested in a business that provided wastewater treatment plants to private
sector clients in Uganda, Ghana, and Angola, where the company was paid for
building and operating the facilities.

Vital Capital Environment, the firm’s water infrastructure platform, plans
to provide potable water infrastructure to French-speaking African
countries, covering everything from water capture to piping and distribution
to communities.

Gerber explains that Vital Capital avoids direct involvement in the
provision of piped water to end consumers. “Do we as private sector want to
be the ones that cut your water when you didn’t pay? I think that’s not our
place. So we’re happy providing water to the utility company or the
centralised entity, but we’re trying to avoid being the one doing the
collection and basically, you know, cutting your water because you didn’t
pay your bill.”

Unlocking the affordable housing market

Vital Capital has also been involved in affordable housing developments in
countries such as Angola and Ghana. Gerber says middle-class housing is a
tricky sector, in large part due to the underdeveloped mortgage sector in
many African countries.

He explains that to achieve success in large-scale affordable housing
development, it is crucial to have intermediaries – either large corporates
or government entities – that guarantee buyers and payment for a substantial
portion of the development. “If you want to build large scale and quick, you
have to know who you are selling to … You have to have an [intermediary]
between you and the final clients, someone that will … create a clear inflow
of eligible buyers.”

Stitching together healthcare opportunities

So far, Vital Capital has completed just one healthcare deal in Africa –
the Luanda Medical Center in Angola, a facility designed to provide
high-quality healthcare and diagnostic services.

Gerber explains that, in terms of healthcare, the firm is currently eyeing
Kenya, where he sees opportunities to consolidate the country’s highly
fragmented healthcare sector. “Always when I visit Kenya, I see all the
different healthcare providers there, from large hospitals to clinics to
startups to nurse-led clinics in the community, to pharmacies as primary
treatment centres like Goodlife  … So there are so many opportunities, and
it’s very, very, very fragmented.”

·         —Howwemadeitinafrica

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