Will Jimerson got his first taste of entrepreneurship in the mid-1990s, after completing an electrical engineering degree at the Massachusetts Institute of Technology and spending two years in merchant banking with Merrill Lynch.
He was invited to become finance director of a new business bidding for mobile phone licences in New York. It flopped, as it did not have sufficient capital. When competitors were bidding US$500m for licences, his company could barely scrape together $100m.
But in the process, Jimerson met his future partners, Antoine Johnson and Meredith Marshall. In 1995, Zimbabwean entrepreneur Shingi Mutasa persuaded them to set up a pan-African telecom fund. The business was called Musa Capital.
Musa was able to establish its first fund thanks almost entirely to one benefactor, Saudi business magnate Prince Al-Waleed bin Talal. Labelled the Arabian Warren Buffett by Time magazine, Al-Waleed is the largest private investor in Citigroup and owns luxury hotels in London, Paris and New York.
Running the fund from New York made it tougher to take a hands-on approach, Jimerson says with the benefit of hindsight. It focused on lower-risk, big brand investments (by African standards) such as Sonatel in Senegal, MTN Uganda and Ecobank. It also invested in Mutasa’s Joina Centre skyscraper in central Harare.
Musa looked set for a far bigger Fund 2 when it partnered Alliance Capital, the $400bn-plus fund manager, to launch Africa funds. It won the bid to manage a $350m Africa infrastructure fund for the Overseas Private Investment Corp, an arm of the US government. The deal was signed in August 2001, but a few weeks later, after September 11, the venture was considered too risky.
Soon after that, Musa Capital moved to Africa and opened its Johannesburg head office in 2005. It expanded its business by offering advisory services and investment management.
But it took until 2008 to set up the R575m Musa Kubu Fund, which looked beyond big business to the “missing middle” — the neglected area between big business and survivalist businesses that are targeted by aid agencies.
The fund’s largest investor is the Bakubung Ba-Ratheo community in the North West. Musa enabled the Bakubung to monetise their R575m holding in the Wesizwe platinum corporation.
Its proceeds are used by the Bakubung Economic Development Unit — which has invested more than R60m in community projects — and the asset and investment arm, the Bakubung Community Development Corp.
Several parties wanted to get their hands on this money and Jimerson says there were court cases but the litigation has come to an end.
“We have some very high-impact businesses, including the largest house builder in the Northern Cape. We concentrate on simple businesses allowing people to eat, be housed, get transport and have access to financial services in a more meaningful way than if we, say, owned Group Five shares.”
BY STEPHEN CRANSTON, 04 JULY 2014 – FM Edition: July 4 – 2014