Zimbabwean private equity firm Brainworks Capital Management has reportedly launched a $20 million fund targeting Zimbabwe’s agriculture, financial services, mining and telecommunications sectors, according to a report on www.privateequityafrica.com.
The Herald newspaper says Brainworks Capital was established earlier in 2011 and will enable Zimbabweans to own stakes in a wide range of companies as required by indigenization laws. Brainworks is offering 400 milion ordinary shares at US$0.05 each to pension funds and local and foreign institutional investors.
According to the Herald, Brainworks is targeting an internal rate of return of 30% on its investments and looks for equity stakes of at least 25% and representation on the board of its investee companies. It aims to hold investments for 3-5 years. It was founded by investment banker George Manyere, who used to work with the International Finance Corporation, and chartered accountant Mr Walter Kambwanji who used to work with HSBC. They have a combined 12.9% shareholding in Ecobank Zimbabwe, formerly Premier Banking Corporation. Mr Manyere is the managing partner and Chief Investment Officer and Mr Kambwanji is a partner and Chief Finance Officer.
The fund has reportedly arranged $6.8 million in bank financing. It aims to invest the biggest part of its funding in gold mining. In January Cape Range Ltd (www.caperange.com.au), listed on the Australian Securities Exchange, announced that its subsidiary Cape Range Zimbabwe (Private) Ltd has entered an option agreement with Brainworks subsidiary Brainworks Capital Mining (Private Ltd), in which Brainworks would offer $2.4 mn for 30% of the company and become indigenization shareholder. Cape Range comments: “This transaction is seen as an extremely positive move forward for the Company to operate in Zimbabwe, as Cape Range endeavours to comply with the Zimbabwean Indigenisation and Economic Empowerment Act.” However, the option expired on 31 January.
Another subsidiary, Brainworks Capital Financial Services, assumed effective ownership of the 12.9% shareholding in Ecobank Zimbabwe and it can boost its stake to 30% in line with indigenisation approval conditions that were set when Ecobank invested in Premier.
Non-executive directors are: Mr Richard Muirimi (chairman), Vulindlela Ndlovu, Alwayn Scholtz (Scholtz Attorneys in South Africa), Swiss-based Cornel Vermaak and German Dirk Harbecke.