Rwanda offers a unique investment destination-German investor

Christian Angermayer, 31 is the founder of the Angermayer, Brumm & Lange (ABL) group of companies, one of Germany´s largest and fastest growing independent financial service groups. The company that employs about 350 employees and 16,000 Independent Financial Advisors, is active in 12 countries and manages total assets of approx. US$ 8 Billion. Besides his entrepreneurial activities, Christian Angermayer is active in several social responsibility initiatives with a special focus on climate change and Africa. He is also a member of the Presidential Advisory Council (PAC) of President Paul Kagame.Altira Group, an asset management company that belongs to Angermayer´s group, has set up a fund called African Development Corporation (ADC). ADC invests in Sub-Saharan-Africa. Angermayer recently led a group of 48 German investors and media representatives to explore various investment opportunities in Rwanda. In this exclusive interview with The New Time’s Fred Oluoch-Ojiwah, he talks about his forays as an investor into Rwanda while generally speaking about how he goes about structuring his investments. When did you first hear about Rwanda? I first heard about Rwanda in 2006 from the former Rwandan Ambassador to Germany. What did he tell you? Just good things. What he told me was a radical departure from the perception we in the Western World had been made to believe about Africa for the last decades. This perception revolves around Africa as being seen as a continent wrecked by wars, poverty and diseases. Especially Western media was just focusing on the negative sides of the continent while choosing to forget the fact that Africa is not a single country, but different ones. Some are doing very well, some are doing very badly. Consequently Western people normally do not see Africa as a destination of choice for investors. So I got very good advice to travel to Rwanda to see with my own eyes the opportunities therein and for the purposes of changing this kind of wrong perception. So how did you take this piece of advice? At first I was sceptical as I was quite satisfied with the business we already had in Europe and Asia. The turning point was in June 2007 when President Kagame was visiting Germany and I had the great honour to meet him. I must point out that Kagame’s insights about Rwanda and Africa by large as a favourable investment location drastically changed my perception. President Kagame was very convincing. So after we met in Frankfurt I decided to visit Rwanda personally. That was then in September 2007. After the first visit and after some background work we decided quite quickly to set up a private equity fund called African Development Corporation(ADC) to explore opportunities in Africa. As an investment banker how do you perceive Rwanda as a location for investing dollars? Of course very good, otherwise I would not be here with this relatively big delegation of fellow investors. Our visit is the best testimonial Rwanda can get. Rwanda is unique because of several reasons. The most important one is the leadership you can see in every aspect of business life. It starts with the first impression visitors get: All is very clean and organized. You should not underestimate the worth of a first impression. Second, Rwanda has very low levels of corruption. We have for instance never been approached for kickbacks. Third, Rwanda´s economy is still growing. The list is long. But to repeat: At the end, this is all the result of good and strong leadership. And this makes Rwanda special. So what have you picked from the table in terms of deal making? Our focus is in financial services. Meaning banks, insurances and other businesses related to the financial industry. More specifically what have you picked in terms of investing within this sector? We have had an investment in BRD. We have sold this stake successfully after helping this bank to grow successfully for more than one year. We also hold a 70 percent stake in Simtel, the national electronic payment switch. These are the kind of investments we are looking at. Any other interesting thing in a different sector maybe real estate which has so much potential in Rwanda? We are also exploring different projects within real estate as a reasonable diversification. I just got an interesting one yesterday evening. It requires investment in the amount of US$0.5 Million to $1 Million. So what are the requirements of your fund? What is interesting to us is a single investment of about US$1 to $5 Million. Core focus is on financials. We are also interested in IT, real estate, energy and small infrastructure projects. For us it is of importance to find the right project, so deal flow is crucial. Our expected return profile is about 25-30 percent a year. So that means that as at the moment you have not cleared any other deal apart from Simtel and BRD? Not at the moment. But we are checking out continuously new deals. As a risk analyst and while doing due diligence you must have looked at issues that can impact on your investments in terms of challenges in Rwanda. So what have you dug up as forming the challenges on the ground now that you are sure of the opportunities? First of all we do not see a political risk in Rwanda itself, which makes Rwanda a ‘normal’ investment place like any other country in the world. Meaning the risks we see are economic ones related to the projects we are chasing. The main question is: Can the company we invest in use our money to raise its valuation in the next years more than 25-30 percent a year? Of course as a foreign investor, whose fund is denominated in the Euro currency, we also have to consider the foreign exchange rate risks. So we have to look at the stability of the local currency. We also look at factors such as ease of doing business. In Rwanda it is good at the moment, but it also has to be sustained. This is an on going challenge. And it can always be better. Once you are number one, you need to stay at the top. Have you toured the Rwandan countryside? Actually I have done the Gorilla tracking. I have also been to Akagera Park. Gorilla tracking to me can be described as a once in a lifetime encounter. How would you look at it in comparison to other destinations? I am very convinced that the Gorillas are one of Rwanda´s jewels. This is why I invested privately in a company called 029 which is a German luxury travel company. Whereby an investment of several hundred thousand dollars have been put into marketing this unique experience to German speaking tourists. 029 has entered into a contract with the authorities to market Rwanda within Germany and other German speaking countries as a tourist destination of first choice. There is huge potential. How is your global portfolio and how can it enrich Rwanda’s investment landscape? We have three pillars. The first is asset management in which for Africa we have the African Development Corporation (ADC). Besides ADC, we have funds investing into German small & medium sized companies and in energy projects in Asia. Additionally, we have a large retail financial services business in German speaking countries where we employ over 16,000 people. In this we sell items like mutual funds. We also have an investment bank in Europe. So there are several potential synergies in the future. We are thinking of doing energy investment also in Rwanda with our energy fund for example. Our focus on renewable energy is dovetailing with Rwanda’s aspirations within the area of renewable energy so we are keen to invest into this sector as well. How can policy makers boost the country’s investment drives? The most important component is capacity building. Education is very important for investments. It takes time but nevertheless it is the most important. Of course there are other challenges. Rwanda is developing fast and you can see that you need within every sector locally qualified personnel. That to me is the top priority. The other is the business climate which must be made sustainably easy for Rwanda to remain at the top league of those being labelled as investor’s paradise. The economy needs very large investment in infrastructure like the railway deal that needs funding in excess of US$3.5 Billion. Are you looking at these too? We ourselves are not looking at such deals as they are surely very huge deals. But we have a partner company called MRK. The person in charge is called Peter Hartmann, who does exactly these kinds of deals worldwide. He is with us on this trip and is exploring the country for the very first time. He builds airports, harbours and other forms of physical infrastructure in which he owns a specialised company with 400 people. He does this sort of work from planning, financing, execution and eventual implementation of such projects. He is our exclusive partner as we know that infrastructure is crucial for a lot of emerging markets we invest in. So how long have you been in this game of investments? Almost 11 years now. I started when I was twenty. I started very early generally as an entrepreneur and even more unusual I started out early regarding working as an investment banker. In terms of looking back at history how do you see your first deal on the ground in Rwanda ever since you first landed here? Our first deal was Rwanda Development Bank(BRD). In this case I must say that it was a good deal from inception to when we exited. Being the first company that was presented to us I can say that our investment paid us good returns. Given the circumstances in the worldwide banking industry at that time and if you are aware about the effects of the financial crisis that was biting on a vintage investment made in 2008, I must say with hindsight that it was good. Another key spin off is how we were able to impact on the bank’s performance. I think we forged a good collaboration with the other shareholders. We really added value and this is the reason the bank developed well despite the very difficult times for the banking sector. How about your second deal-Simtel, when are you exiting? It is developing at a slower pace. Simtel is not what we call an exit deal. We are there to stay in Simtel. I must say that our fund ADC is designed in such a way that it is what is referred to as a ‘never ending’ fund. Meaning that the fund itself has no ending. In that I mean that investors can sell shares in the fund if they want to go out but the fund itself stays. So we can do both: exit driven deals and those that are such that we stay in them for long or for ever. In the case of Simtel we are here to stay, since it is a key business undertaking within the country’s banking industry and potentially in the region and beyond. This is also why we took a majority shareholding at seventy percent. And maybe let me add a last sentence. We are here to stay in Rwanda in general for a very long time and we are happy about the good cooperation we have with the Rwandan private sector and the Rwandan people in general. Ends

Q&A

Rwanda offers a unique investment destination-German investor