Brainworks fund links indigenization and private equity in Zimbabwe

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.

6 Responses to “Brainworks fund links indigenization and private equity in Zimbabwe”


  1. rob stangroom

    Isn’t a fund launched when it makes its first investment?

  2. Will Jimerson

    We see Zimbabwe as being one of the pivotal contributors to growth in Africa – in part because, in spite of the disablement of the financial services sector during the past ten years, it still has sophisticated capabilities within its financial services sector and, in part, because liquidity is being restored to the sector through transactions such as the US$30 million one signed on 18th March between South Africa’s IDC and the Agricultural Bank of Zimbabwe (AgriBank).

    As the lead arranger and co-advisor, with Neverseez, of the transaction, we were delighted to see not only two banks getting around the table, but also two Zimbabwean political parties working to make the deal happen, and two neighbouring countries giving each other an economic hand up. http://www.musacapital.com

  3. Tom Minney

    In many places worldwide the launch is a big affair with ministers and munchies for a crowd. Sometimes no action follows, except perhaps opening an office, buying furniture, cars, etc. Sometimes it could be better to hold a “launch” only after a year of successful trading or activity. Let’s hope Brainworks is operating on a much more pragmatic level – it seems to have a good strategy and opportunity to move quickly.

  4. Tom Minney

    Congratulations on the transaction and thanks for informing our community about it. Wishing you all the best with more transactions in the region.

  5. Lovemore Mhindu

    We at Danolus Investments see this a ground-breaking announcement ,considering that the advent of the Indigenisation and Economic Empowerment Act arrived with so much negativity.

    It is a particularly proactive business approach to the changing economic landscape in Zimbabwe and holds big rewards for the those brave enough to explore the positive side of this promising economy .

    We still maintain that Zimbabwe is “asset rich and cash poor” as once stated by BJM’S Ceo. A forcasted growth rate of 9% (announced by the Finance Minister no so long ago ) is enough to tell the savvy investor where some of best opportunities lie unexplored and undiscovered.

  6. Tom Minney

    Hi Lovemore, I hope the talks are going well and that you are managing to connect with some of the investors looking with interest at Zimbabwe these days. Medium and longer-term investors still see it potentially as a key part of SADC.