Dadie Tayoraud and Jerry Parkes, Injaro Investments is an Abidjan-based fund management company founded in 2009 by three West Africans – a Ghanaian, an Ivorian and a Senegalese. The company aims to realise the potential of West Africa’s small businesses as an engine for economic growth by providing access to what they call ‘smart’ capital. We caught up with two of the partners for a quick interview about their business.
THE BACKGROUND OF THE PRINCIPAL PARTNERS
Jerry Parkes grew up in Accra, was educated at Achimota School and later studied Electrical Engineering at K.N.U.S.T. After obtaining an MEng (Hons) in Electronic and Electrical Engineering at the University of Manchester, he commenced his career as an embedded systems software engineer with Visteon Automotive Systems, then a subsidiary of Ford Motor Company. Whilst there, he was part of a small team of engineers that developed Visteon’s first prototype telematics device targeted at luxury vehicles. He later worked as a consultant with Accenture in London where he advised telecoms and media companies such as Vodafone, O2 and Disney on how to improve their business performance. Jerry then left the UK to study for an MBA at the Wharton School of Business in the US after which he worked as an investment banker with UBS in London. Just prior to returning to Ghana, Jerry was a director at a London-based fund management company where his responsibilities included managing a fund with over £30m of investments in small to mid-sized companies.
Dadié Tayoraud was born and raised in Côte d’Ivoire. He holds a BSc in Business Management and Finance from Ecole Supérieure de Commerce d’Abidjan. He started his career as an Assistant Financial Controller at Ivoire Inter-Continental Hotels. After four years of loyal service to that institution, Dadié embarked on his entrepreneurial career setting up an agri-processing company after which he joined Voodoo Communication, a start-up media company where he occupied the position of a Business Development Manager. Dadié led the establishment of new branches across West Africa before leaving to study for an MBA at the Wharton School of Business. After graduating, he then worked in business development for Henry Schein, the largest dental products distribution company in the US. Recognising the opportunities in Africa, Dadié returned in 2007 to set up a staple food distribution company and has provided consultancy services to many small businesses in Côte d’Ivoire.
THE CONCEPT AND HOW IT WORKS
Injaro Investments has the mandate to manage two investment funds that will invest money in small companies in West Africa. One of the funds, the Lundin West Africa SME Fund, aims to provide ‘smart’ capital to small to medium-sized enterprises (SMEs) with the dual goal of making a good return for investors while having a positive social impact on the communities in which the companies operate. The key difference between Injaro’s offering and that of a traditional bank is that Injaro will spend time to understand a company, its industry and the goals of its management team and will also work with the company to define a clear plan for achieving those goals. Injaro will then commit capital and human resources to assist the company to grow profitably. Capital may be committed in the form of loans, equity or other equity-like instruments that are appropriate for the financial profile of the company. The benefit to companies is that they can access capital on terms that facilitate growth while also tapping into the experience of the Injaro partners and their network of business contacts. In addition to the above, the SME fund has a pool of capital within an associated technical assistance facility which will be used to fund capacity building projects that are identified during the creation of the company’s development plan. For instance, the facility could be used to fund items such as one-off training sessions, marketing campaigns, recruiting efforts or technical surveys that can be demonstrated to have a measurable impact on the performance of the business.
HOW THE PARTNERS MET AND SETTLED ON A FUND LIKE THIS
Dadié and Jerry met in [Wharton] Business School and soon realised that they shared the goal of returning to West Africa to “do well while doing good”. On campus they worked together to organise Africa-focused events to raise the profile of the continent and to increase the awareness of Africa’s potential amongst their non-African classmates. Organising these events forced them to look at their home continent from an investor’s perspective and led to them recognising that successful African businesses of the future would be more likely to have a regional footprint than to be limited by national borders. It was therefore quite clear to them that any future business collaboration would need a regional theme. The idea of an SME-focused fund investing in francophone and Anglophone West Africa therefore resonated strongly with both partners and ultimately led to the formation of Injaro.
WHY PARTNERS DID NOT CONTINUE WITH THEIR HIGH PAYING JOBS OUTSIDE BUT DECIDED TO COME BACK TO AFRICA TO SET UP THE FUND
Jerry’s response, “My motivation is the desire to make an impact in the lives of fellow Africans who may not have been fortunate to have some of the opportunities that I had. I have friends from very diverse backgrounds and I am therefore acutely aware of how different my life could have been if I had been born to parents who were unable to provide me with the basic necessities of life or with an education. I therefore consider myself fortunate and feel it is my duty to use my skills to improve the lot of my fellow African. I like the idea of doing this through business because I believe Africans deserve the dignity of working to earn their living rather than relying on handouts. Venture capital is a local business, so once we came up with the idea of the fund it was clear that I had to return to West Africa.”
Dadié added, “Also it is important to remember that Africa is full of opportunity and that talented individuals are beginning to earn salaries comparable to those found in the developed world. Entrepreneurs such as Mo Ibrahim and Ken Ofori-Atta have demonstrated that it is possible to be just as successful in Africa as in Europe or North America. We believe that Africa is on the cusp of a period of strong economic growth and now is probably a very good time to return to ride the growth wave.”
Africa has the greatest need for wealth and job creation but also has the greatest business potential for people who understand the environment.
ELABORATE ON THE SECTORS YOU ARE TARGETING
We are sector-agnostic. However, keeping consistent with our core values, we generally seek to invest in companies that can demonstrate the potential for value-addition within West Africa and can thereby drive job and wealth creation. We find that many agribusinesses fit this profile as they more easily lend themselves to improving the earnings of all players along the value chain, especially smallholder farmers in rural areas. However, we are not exclusively focused on agribusinesses and are currently looking at companies in other sectors that have similar value-addition characteristics.
WHAT AMOUNTS CAN YOUR CLIENTS ACCESS?
The fund invests between US$200k and US$2m.
WHEN IT WILL BE OPERATIONAL
The plan is for the fund to be operational by the end of June 2010.
THE VISION OF INJARO INVESTMENTS
To release the potential of West Africa’s SMEs as the engine for the region’s economic growth.
WHAT YOU WANT TO GROW THE FUND TO
The target fund size for the Lundin West Africa SME Fund is US$25m. However we intend to launch larger funds in the future in order to make a greater impact.