Switzerland-based impact investment firm Vital Capital Investments is planning a $500-million private equity fund that will focus on African industries overlooked by competitors.
This is the second Africa-focused fund for Vital, which is looking at opportunities in Angola, Cameroon, Ethiopia, Ghana, Ivory Coast, Mozambique, Rwanda, Tanzania, and Uganda, managing partner Eytan Stibbe said, according to a report in IndependentOnline.
The fund could make up to 20 investments in industries such as agriculture, affordable housing, water, education, health care and clean energy.
“People consider those areas that we’re active in as higher risk and there are less entities involved,” Stibbe said, according to IOL. “It’s more difficult to attract foreign, Western sources of money to these sectors to do affordable housing in rural, even urban Africa. We found that as a big need, so we decided to create Vital as a platform for Western money to be invested in Africa.”
A former Israeli fighter pilot, Stibbe has been described by local media in Tel Aviv as a “King in Africa” because of his growing influence and impact there, Forbes reported.
Stibbe founded Vital Capital after gaining an international perspective attending the European University in Belgium, where he earned an MBA. He earned an undergraduate degree in computer science and math at Bar Ilan University, Tel Aviv.
Vital Capital is rated in the top 10 funds for impact performance by the Global Impact Investing Rating System, which has ranked the results of 80 funds, IOL reports.
In addition to financial returns, impact investment funds aim to generate environmental or social benefits too, according to the Global Impact Investing Network. Impact investments are a growing market that provides capital to support solutions to the world’s most pressing challenges.
Vital Capital closed its first fund in July 2012 after raising $350 million of its $500-million target from close to 20 investors, IOL reported.
The fund committed to 12 projects, including $92 million to Kora Housing, which builds affordable homes in Angola. About 68 percent of Vital Capital Fund I has been deployed.
Kora is Vital Capital’s largest project in Angola. It’s building entire towns from the ground up including 40,000 affordable housing units. But first, the company had to clear the land of land mines left over from wars, Forbes reports.
The effect of Stibbe’s military service on his career can be summarized in a single word: “courage,” said Kobi Trivizki, who worked for Stibbe in Angola, in the Forbes report.
Stibbe’s previous investments in Africa show that impact investing actually does work, said Devin Thorpe, a former investment banker and CFO-turned author who writes for Forbes.
One of Vital Capital’s investments is in the 8 Miles Fund, a pan-African private equity firm founded by Bob Geldof that focuses exclusively on investing in Africa, according to the Vital website. The investment by Vital in 8 Miles complements parallel investments by the International Finance Corporation, the Commonwealth Development Corporation and the African Development Bank, Vital said.