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JB Equity eyes sub-Saharan expansion with new hires – exclusive

The new additions bring on-the-ground PE experience in Africa and knowledge of large-scale deal execution.

Agri-focused JB Equity has brought on new partner Stephen Mcloughlin as the firm looks to expand into sub-Saharan Africa. The group has also added Thomas Ward to its board as a non-executive director.

Before joining JB Equity, Mcloughlin ran a management consultancy focused on bringing private equity funding to high-growth businesses in sub-Saharan Africa.

Kristian Bennetsen, managing partner of JB Equity, told Agri Investor that the addition of Mcloughlin reflects JB Equity’s strategy of working with local partners to bolster prospective investments in sub-Saharan Africa.

“Stephen brings exactly the right credentials because we are looking for someone with strong relationships on the ground,” said Bennetsen. “One of the key risks in investing in Africa is that you have to have a very strong local partner to protect your investment.”

Mcloughlin added that foreign ventures in the region have often been stymied by bureaucratic roadblocks and local pushback, because they have failed to demonstrate value to important local actors.

“I’ve seen them lacking [local buy-in],” Mcloughlin said of investors in the region. “All trying very hard but failing because they don’t understand the local culture.”

JB Equity currently operates on a deal-by-deal basis, rather than a traditional private equity fund structure, according to Bennetsen. He said there are a handful of growth-stage operations in the sugar, timber and poultry sectors in eastern sub-Saharan Africa that are currently on the company’s radar. The firm is targeting investments in the $10 to $40 million range.

“There are huge opportunities in the African market,” said Mcloughlin. “We’re going to focus on current companies that have a good historic record, not only from a return point of view but from a sustainability point of view.”

The company’s search for investment opportunities remains in the preliminary stage. However, the limited number of companies in the region that meet JB Equity’s investment criteria mean that the company would look to act quickly on the right opportunity, said Bennetsen.

“When [these deals] do come along,” he said, “they tend to come along very quickly.”

Mcloughlin will be joined on JB Equities’ board by non-executive director, Thomas Ward. Ward is best known for his management role at the Scottish & Newcastle beer company during a period that saw the brewer grow from a regional brand to a multi-billion dollar international enterprise.

“Thomas Ward brings a vast experience in large-scale deal execution and deal structuring to JB Equity which compliments the partnership very well,” said Bennetsen.

In addition to JB Equity’s activity in Africa, the firm is actively looking for opportunities throughout the developing world. Bennetsen said the firm expects to reach a final investment decision on a pork production operation in Latin America by the end of 2015.

The firm is said to be in the very early stages of planning a traditional private equity fund launch by the end of 2016. Bennetsen declined to comment on fundraising.