The Proof Is in the Returns

Tope Lawani ’95 is invested in Africa, and so is the equity firm he heads

HLB W12_12028By the time Tope Lawani ’95 started law school, he knew he would not likely spend his career practicing law. Already the impact of his Nigerian childhood and a captivation with investment markets had planted the seed of an idea that would eventually pull him back to his homeland in hopes of reaping great returns for investors—and for Africa itself.

Lawani is one of the two principals of Helios Investment Partners, a London-based equity firm focused exclusively on private investment in Africa. The firm has managed $1.8 billion in capital invested in more than 30 countries, primarily in sub-Saharan Africa.

The continent has historically been reliant on investment from development finance institutions, which are backed by states with developed economies and finance investments that specifically promote development. But Africa has become increasingly attractive to private investors because they can earn higher returns for less than commensurately higher risks, Lawani said.

He has built a portfolio reflecting the rapidly changing socioeconomic landscape of Africa. Sectors include media, telecommunications and banking. Among the limited partners in Helios’ funds are global investment funds, corporate entities, high-net-worth individuals and development finance institutions.

It might be an understatement to call Lawani’s educational background well-rounded: He received his bachelor’s degree in chemical engineering from MIT, studied law at Harvard and stayed to earn his M.B.A., moving down the difficulty curve as he went, he joked.

He first fell in love with markets when he deferred law school for a year and worked for Disney analyzing potential acquisitions and business lines.

Later, in San Francisco at Texas Pacific Group, Lawani invested fortunes in North America, Latin America, Western Europe and Asia. But never in Africa.

Yet from abroad and on visits home, he watched the changes— including the spread of democracy, the growing privatization of various sectors, and the advent of information technology.

At the same time, he said, traditional world markets were becoming more competitive; returns were harder to obtain.

But for Lawani, convincing an employer to invest in Africa wasn’t enough. In 2004, he and Babatunde Soyoye, also a native Nigerian, chose to be at the helm of an enterprise of their own, so they launched Helios.

“I don’t believe in small things. I believe in trying to do big things,” said Lawani, 41, who lives in London with his wife and three children.

Moreover, he was seeking returns other than just financial ones. His goal, beyond making money for his investors, was to help transform the continent.

Lawani grew up in the Nigerian city of Ibadan, as one of four sons in a well-to-do family. A top-of-the-line education and comfortable life would be his if he worked hard, yet the chasm between his experience and that of most Africans never escaped him.

You are surrounded, he said, by “people who have every bit as much talent and are every bit as hardworking as you, but for some reason, accident of birth or whatever, they end up with fewer life opportunities. You become aware of how much good fortune plays a role in life. When you are among those who won the lottery … it’s important to use those capabilities to the best of your abilities.

“If your desire (which mine is) is to see meaningful and sustained improvements in the socioeconomic status of Africa,” he added, “you get there by mobilizing significant amounts of private-sector capital. If you can do that, you will get a virtuous cycle of more capital going to more interesting causes and creating more jobs.”

But managing equity in Africa has challenges, Lawani said. “You need to work harder to ascertain the value of a company.” There are fewer shortcuts, less data. “You need to be a better investor.”

There are also historical misperceptions, he said, not the least of which is the notion that Africans cannot do for themselves. One of his personal challenges is to debunk that myth.

And the proof, he said, will be in the returns. “The beauty of the investment business is that the truth always comes out.”