John K. Coors, great-grandson of Coors founder and brewing magnate Adolph Coors, is leading a new private equity fund of wealthy families who plan to invest more than $300 million in Africa.
The 10-plus families hope to recruit others to invest over the next four years starting this year under the name “One Thousand & One Voices,” derived from its collaborative approach with the families, African business people and their employees, Coors said in a Wall Street Journal interview.
The group is in discussions with South African and other companies outside Africa with a view to setting up operations in Kenya.
This is part of an influx of private-equity funds that helped push foreign direct investments in Africa from $15 billion in 2003 to $43 billion in 2011, according to the most recent data from the United Nations.
In addition to Africa’s oil and minerals, companies like Blackstone GroupLP and Carlyle GroupLP are drawn to Africa’s burgeoning retail and manufacturing companies serving the growing consumer class that now comprises a third of the continent’s population, according to African Development Bank.
Chinesom Ejiasa, who directs private equity at Overseas Private Investment Corp, said the opportunity is large and growing larger. OPIC is a U.S. government agency that invests alongside U.S. firms doing business in Africa.
But the Coors-led group will be different from larger players in its willingness to make smaller investments, less than $10 million, Coors said.
It is also willing to stay invested for 10 years or longer and to share the expertise of its members.
Coors said he was inspired after realizing that orphaned children whose schooling he helped fund were graduating into an economy without jobs to offer them.
“Philanthropy does not work for economic development,” Coors said. “What does work is capitalism.”
The group’s executive is Hendrik Jordaan, a native South African and former attorney at international law firm of Morrison & Foerster LLP. He said in a Wall Street Journal interview he plans to hire 15 people in hubs like Johannesburg and Nairobi to monitor the group’s investments.
Jordaan admits the group will be competing with larger funds and deeper pockets, but said it will be attractive to smaller companies that are established in their home markets and want to grow outside Africa.
“We intent to play that sweet spot in the middle,” Jordaan said.