Investment companies that wear their causes on their sleeves have benefited greatly as casual investors have sought to make their money work in alignment with their values.
Take Lonsa, a principal investment holding entity firmly committed to investing in businesses that provide renewable energy, logistical services and affordable housing in Africa.
“My father’s generation was involved in the liberation of Rhodesia and the creation of Zimbabwe,” Robin Vela, chair and founder of Lonsa Group, tells The CEO Magazine.
“My sense was that my generation needed to make a contribution, and the best way to do it was through our knowledge of how the financial world works.”
The son of a nurse and an economist, Vela’s mix of both a Zimbabwean and a British upbringing gave him opportunities he knew he was lucky to have.
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“My life was a little easier than some of my compatriots,” he says. “I was Black, I could get the grades and I was British.”
Inspired by his father, Vela pursued a career in investment banking.
At age 29, Vela found himself leading a team of 50 in the heart of London as a principal investment corporate financier.
Soon after, he and three peers formed Create Ventures, an early-stage venture capital company.
“I loved it,” he says. “But I always had the aspiration to return to Africa and give back, somewhat.”
Enter Lonsa (London, Southern Africa) in 2004.
“I had a bit of a track record in the United Kingdom and institutional backing, so I thought I’d take that into Southern Africa and regionalise local businesses,” Vela says.
When he arrived in South Africa, he found black entrepreneurs who had access to deals and capital, but lacked the kind of world-class corporate finance skills honed in the United Kingdom.
“It was exactly where I wanted to be,” he says. “In Lonsa, I had a base in which we could do deals. I had credibility because I had worked across banks.”
Vela began advising local businesses and augmenting local skills shortfalls with his own experiences.
Eventually, Lonsa made its first acquisitions: Everite, a highly profitable fibre cement company, and Swartland, a manufacturer of doors and windows.
The two became crucial suppliers for what was to come.
“We melded those two businesses into a group we call Catapult, and we repurposed Lonsa to be both an enabler and deliverer of affordable housing,” he says.
Southern Africa suffers from a shocking deficit of more than 20 million housing units. It’s a situation Vela hopes to change.
“We’ve got huge ambitions as to where we want to be in the next five to 10 years,” he says.
“The housing deficit is a US$3 trillion business, and if we can be a very small part of that very big sector, the businesses we have underneath us will do well.”
Supporting Lonsa’s work in the field are three pillars: Catapult Group, its industrial enabling arm; Firstmile, its housing delivery arm; and Lonsa Renewable Energy.
“Our manufacturing facilities are world-class, and we have the opportunity to deliver in excess of 200 megawatts of power to our own facilities,” Vela says.
“The key to Lonsa’s growth is going to be in our backyard, the southern African arena.
“We will expand our products into the region and cement our position as an affordable housing deliverer.”
Vela says he’s never lost that sense of philanthropy and his drive to give back to the community that, through his parents, he feels so closely tied to.
“You’ve got to look beyond yourself to what could ultimately make a contribution to others,” he says.
“The Firstmile tagline is: ‘Firstmile is committed to the promise of a place called home for everybody’.
Everybody should have a place they can call home, and that’s what we’re providing.”
It’s indicative of a culture of benevolence that has grown in the heart of Lonsa. “We care for personal family values,” he says.
“If we don’t care for each other, we can’t care for our tenants.”
A sense of purpose does wonders for a business’ growth. If a team has something to aspire to, chances are they’ll do it.
“Honestly, I was driven to housing simply by the deep demand and the sense that one could actually make a contribution,” Vela says.
“Ultimately, we can do well from a capital return perspective, but we can also do good.” – CEO Magazine