Botswana’s icon for┬á private equity firm VPB, Antony Siwawa, who has created wealth for a number of Batswana through his risky business ventures is aiming to increase the foot-prints of his firm across the region. Last week, he spoke to Sunday Standard’s Business Editor, Prof Malema, about his company VPB and ┬áits future plans.
For all the six years I have known him, Antony Siwawa has kept the black suit and a white┬áshirt as his trademark.
A computer software engineer who abandoned his trade to┬á get in the more risky and more rewarding business of getting money from people with the promise of paying it back with the above-market interest is one of the rare feat in this country.
Is his thinking of owning a corporate jet or is he trying to fill up the gaps in the system?
Not the formerÔÇöthat’s for sure.
He is humble in character. He is not like most of the guys who would irritate everybody in town after putting a couple of hundred thousand pula into their accounts.
It is like he has spent his entire life studying Richard Branson, of Virgin Atlantic fame or has read a lot of bullish plans of Lee Iacocca, the former chairman of Chrysler ┬áCorporation who saved the giant motor company from ruin┬áin the early 1980s.
Last week, Thursday, we met in one of his boardrooms in his office on the first floor of the Bifm’s complex at the International Finance Park. As expected, the man was┬á in his black suit and white shirt. But this time without a tie.
His eyes were glued onto the carpet decorated walls as if he was looking into an imaginary world map, sincere but also cautious as he fielded my questions.
Cautious because the world has changed since the global credit crunch, but he still has some level of confidence that one day, things will turn right.
Indeed things are not the same as six years ago when, from nowhere, he stunned most of the people in the country when he won a CEDA Venture Capital Fund contract to manage their funds to the tune of P200 million.
I remember then some of the abuses that were hurled at him by many people who did not understand the industry of venture capital and private equity. Most of the people thought he was well connected and had been given the money to┬á re-distribute it┬á on behalf of CEDA.
Siwawa, who has spent most of the time learning a lot of things┬á related to finance, such as,┬á auditing, ┬ácorporate banking, investment banking and consultancy, realized that there was a mismatch between┬á liquidity and┬á demand of finance for viable projects in Botswana.
It was┬á at the height of┬á Black Economic Empowerment (as they call it re-distribution of wealth down there)┬áand he came back home later to set up a Private Equity firm, now known as VPB.
A year later, the government, hamstrung with lack of┬á experience and skills to operate┬á private equity outfit, issued out a tender. He won it. Then a problem arose: no one in the government enclave knew how the said animal should operate.
They transferred all the money to him.
The money was not his and, most important of all, was not going to his personal use. He spent most of the time with the team trying to find good and viable projects (some start up and others┬á financial ailing companies) that┬á could yield a better return.
The problem was that the industry was┬á new in the country, unlike the fancy things┬álike investment banking, where┬á you are the last man on the line, all that you do is to give out the cash and expect repayment┬á at the end of every month.
“Private equity is not all about financing; it involves a lot. That is financing, management and making sure that you are focused so that the company gives you the expected returns,” he said.
Given the challenge to spend the money so that he┬á could pay back, his team worked on┬á a number of applications and business plans of the cash hungry Batswana who wanted to have an opportunity in life.
At the end of it all, 18 companies were approved. However, two have collapsed ÔÇô including Fabulous Flowers and┬á Bojalwa ja Mabele┬á — while the other 16 are still going strong with┬á staff compliment of 1,100 people.
But he does not regret for those that have collapsed. In simple terms, he has dusted himself and plans to take some of the┬á companies on to the Botswana Stock Exchange listing┬á if the credit situation improves┬á quickly.
┬á“The thing is that ┬áCEDAVCF ┬áhas created an opportunity for entrepreneurs┬á and business people┬á in this country. More jobs were created through private equity and VCF than┬á by all listed companies,” Siwawa said.
He added: “Within four years, the whole amount of money was deployed in the local market. And that was highly unprecedented.”
The 16 projects┬á are now being supported by accessory projects ,such as┬á upholstery, furniture manufacturing for the CEDAVCF project that┬á is focusing on tannery in Phakalane . The same goes with other projects that they have established, creating spin off in terms of wealth creation and jobs.
“The thing about private equity is that though it is┬á not a sexy industry, you get to see its impact after sometime.
However, the big challenge is to pay back rather than milking the tax payer.
“We think it is going to be difficult, especially during these times with all what is going around the world. It is difficult to exit some of your investments because you will loose out,” he said, adding that “imagine if this was happening in our last year. We would be trying to get an extension and people would be saying we are cheating.
“I think in the coming years┬á there will be an awakening┬á of private equity┬á in other parts of the southern African region,” he said.
His life would be easier if he had a private jet. Half the time you phone he is away, either overseas or somewhere around the world.
I remember some two years back, I was looking for him in connection with an interview. That week, I was also busy traveling and thought I could do the interview before I left.
┬áI phoned his office and was told that he was away in Washington . I gave up and worked on my trip to Johannesburg and Belgium . Two days in ┬áAntwerp, Belgium as a I was on a walkabout around The World Diamond┬á Centre, I looked over ┬ámy shoulder┬á and there was this tall and skinny┬á blackman pacing up and down behind me. I slowed-down and had a second look.
It was the man that, four days ago, I had been told was in Washington.
We exchanged some pleasantries and then he told me that he was┬á rushing for an appointment with┬á one of the diamontaires within the┬á Diamond Square.
Last Thursday, as we talked, he was busy thinking about┬á his next trip┬á as he is busy┬á going┬á around the world trying to raise some more money┬á with a view to assisting some other start-up businesses in Botswana and the southern African region.
He is already thinking of opening six offices within the southern African Development Community (SADC) region.
“We are thinking of opening an office in Namibia to try to help with┬á private equity of their┬á public officers’ pension funds before the first quarter of this year,” he said, as he made advance preparations to leave the following week.
“Then we will have Angola and Zambia by mid this year,” he added.
“Governments in this region have got lots of money and the problem is that they did not know how to use their money to prop up the private sector growth.
“There isn’t a shortage of capital but what would be critical is the funds that would ensure that there is citizen economic empowerment,” he added.