Equity firm seeks US$20 million

million through a private placement to finance mining, agriculture and telecommunication investments in the country.
Brainworks Capital was established early this year. The fund seeks to enable broad participation by Zimbabweans in the indigenisation of the economic sector.
The company is offering 400 million ordinary shares of US$0,0001 each at US$0,05 to pension funds, local and foreign institutional investors as company shareholders.
Brainworks Capital will target equity investments of at least 25 percent and these will be supported by a representation on the board of its investee companies.
It’s also eyeing an internal rate of return of 30 percent on its investments and this will be achieved through identification of good assets at attractive entry prices as well as its proactive approach to investing which monitors management’s performance and assist where necessary.
The average investment-holding period will be between 3 to 5 years.
The private placement will enhance the company’s ability to access international capital markets through issuance of various capital instruments to finance investment activities.
Of the US$20 million Brainworks will invest an estimated US$3,6 million to US$15 million in gold mining, US$2,5 million each in investment banking and agriculture.
Micro-financing and insurance investments will receive US$500 000 each while repayment of acquisition finance used to fund current investments would be allotted US$2,6 million. The biggest chunk of the funds, US$4,9 million will go towards funding of new investments.
Working capital would be allocated US$2,2 million, repayment of shareholder loans US$250 000 and other obligations will be apportioned US$315 010.
As at January 31 the fund had secured bank facilities to the tune of US$6,8 million to finance its investment activities.
Brainworks was founded by investment banker, Mr George Manyere and chartered accountant Mr Walter Kambwanji who have a combined 12,9 percent shareholding in Ecobank Zimbabwe, formerly Premier Banking Corporation.
In the short term, the primary focus of Brainworks Capital would be to fund investments in the mining sector while continuing to assist in a non-executive capacity in the development of Ecobank’s strategy in Zimbabwe.
A private equity firm raises capital or private equity funds that supply the equity contributions for these transactions.
The firms will receive a periodic management fee as well as a share in the profits earned from each managed facility.
Private equity firms, with their investors, will seek to acquire a controlling or substantial minority position in a company and then look at maximising the value of that investment.
A team of dedicated professionals manages the fund. Mr Richard Muirimi leads Brainworks as the non-executive chairman and Mr Vulindlela Ndlovu is the non-executive director, together with Mr Alwayn Scholtz, the founding partner of Scholtz Attorneys based in South Africa.
Swiss-based Mr Cornel Vermaak is the other non-executive director as well as Mr Dirk Harbecke, a German national.
Mr Manyere is the managing partner and the fund’s chief investment officer while Mr Kambwanji is a partner and chief finance officer. M Manyere has worked for the International Finance Corporation in Washington DC, wahere he invested in excess of US$600 million in Sub-Sahara Africa.
He also managed a portfolio of investments in excess of US$400 million and represented IFC on several investment company boards.
Mr Kambwanji was in the finance and treasury department of HSBC in London before investing in Premier Finance Group.
Through a swap of acquisition finance for equity, Brainworks Capital Financial Services, a wholly-owned subsidiary of the company, assumed effective ownership of 12,9 percent shareholding in Ecobank Zimbabwe.
The consortium still has the right to increase its shareholding in Ecobank Zimbabwe to 30 percent in line with indigenisation approval conditions, which were set when Ecobank invested in Premier.
Brainworks is projecting to close the year 2015 with a Net Asset Value of US$57,1 million.
Analysts said the country currently presents an attractive investment opportunity following the stabilisation of the economy after the introduction of multiple currencies. They said the indigenisation policy further presents significant opportunities for properly -structured investment vehicles.
“It is a brilliant concept which falls in line with indigenisation as locals are looking for money to finance investments,” said a Harare-based analyst.