Local equity firm aims to finance development

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Windhoek

Named after Greek mythology about a new dawn, Eos Capital is a private equity management firm that aims to rejuvenate the local equity market and through the locally grown Allegrow Fund finance development in the country.

The names for both the management firm and the equity fund – Allegrow is a play on the word ‘Allegro’, which denotes at brisk speed or rapid tempo – were chosen, seemingly, to emphasise the need for new approaches from the private sector to complement the government’s fight to address growing inequality and poverty, and to come up to speed to garner and grow investments sufficient to address those challenges.

“At the core of any development is access to capital, intellectual exchange and cultural exchange. What Namibia requires is a new thinking in development and a new way of financing investment opportunities in the country,” says the executive chairman of Eos Capital, Johannes !Gawaxab.

Thus Eos Capital, which is registered as an unlisted investment manager and is compliant with Pension Fund Regulation 29, plans to bring “new life to portfolio investments through capital, operating model, strategy and management support, which allows them to grow to their full potential”, while the goal of the special purpose vehicle Allegrow Fund is to “rapidly grow the investment made into it”, explains !Gawaxab, a veteran of investment banking, who last year retired as senior executive responsible for Africa from one of the world’s largest investment and asset management groups.

Eos Capital and Allegrow Fund have a fund target of between N$500 million and N$750 million, and will look at businesses in the consumer sector, services, information and communication technology (ICT), general industrials and environmental, while casting an eye on other attractive enterprises in other sectors.

They are looking at doing deals with a minimum of N$10 million but which do not exceed 20 per cent of the fund size. “We will focus on finding companies with the potential for Eos Capital to add value, a clear gap in the Namibian private equity market. Eos Capital’s level of involvement in portfolio companies will be high through the investment cycle. Eos Capital will focus solely on the Allegrow Fund, ensuring the fund and its investors receive the best results and attention,” he says.

Interestingly though, !Gawaxab says they will look at Namibia only.

Not only will a strong and experienced local team man the companies, but decisions on the management of investments will also be made locally.

“The fact that most funding decisions are taken outside the borders of our country by the various head offices of key financial institutions is not very helpful. Assessments are currently done remotely by people who have no feel for or appreciation of the dynamics and realities of the country. Assessment is done by ticking boxes clinically. We need to shift the gear from this ‘best practice’ in credit rating by banks and other financial institutions to a ‘new practice’ and thinking of funding bankable projects, if we want to increase economic growth and growth of our private sector and enterprises. More risk can be taken without necessarily compromising financial stability. Developing our enterprises will create and promote inclusivity,” said !Gawaxab.

“What the country requires is economic growth to address the poverty challenge. To grow the economy, we need the private sector and in particular enterprises, including small and medium size enterprises to grow. For the latter to grow, we need access to capital, skills and networks,” he says passionately.

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