PRIVATE equity investor BridgeFort Capital Limited is targeting to manage a US$2 billion diaspora fund over the next two decades, enabling Zimbabweans living abroad to invest securely back home, NewsDay Business can report.
This comes barely two weeks after the firm announced its intention to delist from the Zimbabwe Stock Exchange for a Victoria Falls Stock Exchange listing as it seeks foreign currency.
In a statement, BridgeFort said the investment potential and impact of Diaspora Kapita Proprietary Limited’s diversified model offered a compelling opportunity for investors interested in the high-potential insurance market of South Africa and the untapped African diaspora investment landscape.
BridgeFort recently acquired Diaspora Kapita.
“Suppose 5%-10% of annual Zimbabwe diaspora remittances were redirected into a fund, Diaspora Kapita could attract between US$100 million and US$200 million annually, significantly fuelling its growth initiatives. A new era for BridgeFort Capital,” the firm said.
“BridgeFort Capital is ushering in a transformative phase aimed at establishing itself as a financial powerhouse.
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“This transition is anchored in its acquisition of Diaspora Kapita, a strategic move that consolidates the expertise of the African diaspora with South African partners.
“Diaspora Kapita is positioned to scale three robust business opportunities: life insurance, diaspora-targeted investments and alternative investment solutions.”
The firm indicated that the African diaspora was a vital economic driver for the continent, formally remitting close to US$100 billion annually as of 2021, with top contributions coming from Nigeria, Egypt, Morocco, Ghana and Kenya.
Bridgefort said Zimbabwe’s diaspora concentrated in South Africa, the United Kingdom and the United States, remitted around US$2 billion annually.
The firm said through the “Tsigiro Usekelo”, Diaspora Kapita’s proprietary digital platform offering a one stop shop for affordable mortgages, insurance and cross-border financial products tailored for diaspora needs, diaspora clients could access different options.
Clients can access investments, insurance and mortgage options seamlessly, regardless of their global location through the platform.
The platform currently allows clients to invest in unique options like cattle-backed savings in Zimbabwe and South Africa, while enabling them to purchase funeral coverage for themselves and their families back home. The firm said investors had an exciting opportunity to support a proven, ambitious business model that directly addressed Africa’s unique demands of growing and being globally connected.
“African economies face significant inflation challenges, with over 60% of the continent’s population living in countries experiencing inflation above 10%, severely eroding wealth over time. Zimbabwe is especially vulnerable to inflation, presenting a need for alternative investment vehicles that preserve capital and provide liquidity,” BridgeFort said.
“Diaspora Kapita addresses this need with innovative financial products, such as cattle-backed savings and insurance that offer capital preservation. Through the Tsigiro Usekelo platform, Diaspora Kapita targets Zimbabwe’s retail market and institutional investors like pension funds, encouraging allocation of around 10% of pension assets into alternative investments.”
It added: “By directing diaspora remittances and local investments into productive channels, Diaspora Kapita can contribute significantly to stabilising savings, offering diaspora clients peace of mind with inflation-protected investment options.”