Meet The Harvard And MIT Grad Merging Private Equity With Infrastructure In Africa

Private equity investors face unique opportunities and challenges in Africa, and on this week’s Walker Webcast, Walker & Dunlop CEO Willy Walker talked to an expert with a deep understanding of both the fast-developing continent and the competitive world of private equity.

Tope Lawani is co-founder and a managing partner at London-based Helios Investment Partners, which maintains offices in several countries, including Nigeria and Kenya. A Nigerian national, Lawani holds a degree in chemical engineering with a minor in economics from the Massachusetts Institute of Technology, a law degree from Harvard Law School and an MBA from Harvard Business School.

Prior to co-founding Helios in 2004, he was a principal in the San Francisco and London offices of investment firm TPG Capital, which manages private equity, venture capital, credit and real estate investment funds. Today, he sits on the boards of several global business and educational organizations.

Lawani’s career path has been uniquely cosmopolitan, and the seeds for this were sown during his youth in Nigeria. He attended a school with a student body representing nearly 100 countries, which included the children of Nigeria’s elite as well as children who were the first in their families to be formally educated.

“It was extremely multicultural and socioeconomically fluid,” he told Walker. “And I think that it made me comfortable around people of any stripe.”

Today, Helios is the largest private investment firm focused on Africa. Its investments include TPAY, a mobile payment solution for markets with low banking penetration, as well as upstream energy producer Africa Oil and Vivo Energy, which operates gas stations in 23 countries. 

One of its earliest investments was in a cellular tower business, and today it continues to help build the infrastructure for the continent’s cellular network.

“I remember saying to an investor some years ago that if private equity existed in the U.S. in the mid-19th century, then all of the Vanderbilts and the Carnegies and the Rockefellers wouldn't have existed and private equity firms would have built the railways, they would have built the banks, they would have done all of these sorts of things,” he said. “And to some extent, that's sort of where Africa is now. A lot of infrastructure needs to exist and someone's got to build it.” 

The infrastructure Lawani has zeroed in on is cellular communications. Initially, he and his partner bid on a mobile operator license in Nigeria. They lost the bid but saw an opportunity in investing in tower construction.

“Cellular geographic coverage in the country at the time was 10% or 15% and population coverage was maybe even less,” he said. “We approached Nigerian wireless communication company HTN to buy their towers.” 

At the time, HTN had close to 800 towers in the country and now it has many thousands. 

“They sort of hemmed and hawed and we said, ‘Well, forget about buying existing towers. Ninety-five percent of the towers that need to exist don't exist, so we’ll just focus on building the ones that don't exist,” he said.

Helios has since grown to play a role in providing cellular coverage in several other African countries. But, Lawani said, the tower business in Africa is operationally complex with significant barriers to entry.

“You can think of it almost as real estate, which is what it is in our market,” he said. “And it's really an operating business because every single tower has a primary source of power, which is probably a diesel generator and a backup for that diesel generator. This means there's a whole industry around keeping the diesel supplied and monitored because diesel is a valuable commodity and so you need security.”

In this environment, trust among the various stakeholders in the cellular arena is an important commodity, he noted.

“Credibility is at a real premium and that's why you're not going to see a massive proliferation of tower companies in Africa,” Lawani said. “You'll see a few which exist now and they'll do well.”

Helios’ interests extend to other sectors, such as retail and healthcare, and today it manages funds totaling $3.6B across the board. Its stature in the industry was recognized by publication Private Equity International, which recently named Helios Africa’s firm of the year.  

Lawani said Africa contains many more opportunities that would be attractive to private equity investment.

“If you have a great company that is doing something in an industry that matters in a part of the continent that matters at scale, and it is well run and well governed, then ultimately, there is an exit opportunity for it,” Lawani said.

On April 6, Walker will interview CRE expert Peter Linneman. Register here. 

This article was produced in collaboration between Studio B and Walker & Dunlop. Bisnow news staff was not involved in the production of this content.

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