Invest Africa’s Chairman Rob Hersov shares his insights into investing in Africa with Forbes Afrique. In this wide ranging article that will run on the cover of this month’s Forbes magazine, Rob charts his life through his various business ventures such as Marquis Jet and Sportal, how he ended up returning to South Africa and why the prospects are bright for the continents future.
South African businessman Robert Hersov has recently taken the decision to launch into financing investment projects in Africa. Heir to a wealthy mining family, he has managed large multinationals and founded companies which have earned him several hundred million euros.
When you enter the offices of the man known to everyone here as “Rob”, you immediately notice the key focus on the African continent. The building is situated in the prestigious area of Mayfair in London. From its entrance bearing the logo “Invest Africa” to the publications promoting the tourism treasures of the savanna, everything here reflects Africa, Robert Hersov’s native land.
From Harvard Student to Big Business Leader
Robert Hersov was born in Johannesburg into a family of successful entrepreneurs responsible for creating and building one of South Africa’s largest mining companies, AngloVaal. As he explains it, “I was fortunate and privileged to grow up in a family which had the means to give me what, as I see it, is extremely important in any life: access to an excellent education”. In fact, he studied at the renowned Harvard Business School where he rubbed shoulders with a number of individuals who would become captains of industry, such as Leonard Blavatnik. As a result, he expanded the horizons of his knowledge and discovered how a diaspora comprised of people getting an education in the best universities in the world can make a significant contribution to the economic expansion of their country of origin, one of the factors that encouraged him to return to his native land several years later.
With his MBA under his belt, he began a career in finance as an investment banker in well-known organisations such as Goldman Sachs. Why did he want to work for such institutions? “I wanted to be part of what was at that time the global economic epicentre, Wall Street, and to develop my knowledge within the best organisations”, he asserts confidently. A choice that clearly paid dividends, as it later led to working directly for business giants, notably Rupert Murdoch, founder of News Corp, whose fortune amounts to 13.1 billion dollars.
I wanted to be part of what was at that time the global economic epicentre, Wall Street, and to develop my knowledge within the best organisations.
Working with Rupert Murdoch, he learned to develop leadership skills. “On the basis of some questions he asked me relating to a business plan I had been sent, he decided to employ me. It was then that I realised that a leader often takes decisions based on limited information and sticks to the choice that he makes.” This is a philosophy which Rob put into practice in the course of the various management positions that he held in leading groups in their respective sectors. These include South African billionaire Johann Rupert’s Richemont Group, Morgan Stanley bank, in which he managed the media investment section, and Telepiù, at the time the leading Italian television channel network. He worked in the development of activities in billion-dollar businesses. “One of my happiest memories during these different experiences, he recounts, was when I was the chief executive of the ENIC group. We had acquired Vicenza Calcio, a medium-sized Italian club, which we managed to propel into the semifinals of the UEFA Cup Winners’ Cup.” This anecdote reveals another aspect of his entrepreneurial philosophy: “you must always employ people who are better and smarter than yourself.” Rob did not know much about football but had the insight to surround himself with people who were able to bring the club up to a European standard.
An Entrepreneurial Spirit
In addition to his brilliant career, Rob Hersov founded several companies and launched start-ups often connected with the sectors in which he worked. Such ventures include Adoreum Partners, a consultancy firm specialising in international commercial development and marketing in the luxury sector.
In addition to his flair for business, Rob Hersov has the kind of interpersonal skills which have enabled him to build permanent links with top-flight African entrepreneurs including the Ugandan Ashish Thakkar, founder of the Mara Group, a pan-African conglomerate with earnings of approximately 1 billion dollars according to Forbes magazine, or the Nigerian Tonye Cole, co-founder of the Sahara Group, one of the biggest energy companies in Africa.
However, two of these ventures merit particular attention because they demonstrate that the life of an entrepreneur is not always one of unmixed success.
In 1988, he founded the start-up Sportal, a portal or “network of sites” designed to entertain and inform sports enthusiasts by supplying the content of the websites of some of the big clubs. Rob very quickly acquired the exclusive rights of the sporting federations and famous football teams such as AC Milan, FC Barcelona, Bayern Munich and Juventus. He was able to attract many investors such as Bernard Arnault (chairman of LVMH), the magnate Paul Allen (co-founder of Microsoft), and the ex-prime minister of Italy, Silvio Berlusconi. With a portfolio of valuable contacts, he managed to raise 100 million dollars in funds. His company achieved meteoric growth, taking the top spot in sporting e-business (outside of the United States) worth more than 270 million pounds (1) and was named the top British e-business enterprise by the Financial Times.
Rob has an incredible capacity to recover and move forward. His greatest strength lies in his skill in simplifying problems and rapidly finding solutions to resolve them.
However, his downward spiral matched the speed of his earlier success. In a little less than a year, through lack of financing needed for its continued development, Sportal was on the verge of bankruptcy and Rob was forced to give up his Chief Executive post. “It was my greatest failure”, he admits. “My idea was launched too soon and was too advanced for the technological developments of the time.” Proof, according to him, that “success is more often the outcome of luck than genius.” But, he continues, “failure can be the best way of learning as long as you identify the reasons for it and do not repeat the same mistakes.” In 2001, he launched into the business of private jets and founded Marquis Jet Europe when he obtained the exclusive rights for the sale of “jet cards” (2) with NetJets, a leading company in the sector. With only a modest investment, his business made significant advances and three years later, it was sold to the second richest individual in the world, Warren Buffett, then to NetJets which paid almost 20 million dollars for it.
Rob Hersov was appointed vice president for Europe, unquestionably a significant recovery after the Sportal episode. According to Gianpaolo Pera, a close associate, “Rob has an incredible capacity to recover and move forward. His greatest strength lies in his skill in simplifying problems and rapidly finding solutions to resolve them.” Barbro Ciakudia, Head of Investment Missions at Invest Africa, says: “working for Rob, I became more enterprising and less cautious, which in my case meant increased risk-taking in my decisions, something that is very important in our sector. Rob always says: “it is better to apologise than to be constantly waiting for permission.” He teaches us that if we have an opportunity, we have to grab it.”
He likes to spend his leisure time on the golf course with friends; golf is an all-consuming passion for him and he participates in professional competitions such as the Alfred Dunhill Championship.
As a regular guest at major conferences on African affairs, he reveals his mastery of the art of public speaking; this instrument of power enables him to be an inspiration to others. “He is an unparalleled speaker. He can capture the attention of his audience within seconds, like a magnet, and he can make them laugh. However, people can get carried away by his outspokenness”, says Annette Barrett, one of his closest associates who has been working for him for 23 years.
A Return to Africa
In 2013, he decided to set up Invest Africa. One of the reasons motivating the South African entrepreneur’s decision to create this platform is his desire to correct the often erroneous impression of the continent received by investors, who regard Africa as a risky market. As he says, “I am frustrated by this idea of the Africa of Ebola because there is an Africa in the likeness of M-Pesa, for example, in which you have innovations in many areas. That gave me the idea of launching Invest Africa, in an effort to transmit that image of the continent, to encourage international investors to take it into consideration and to put aside judgments based on inaccurate information.” A credo easily detected in his many interventions in the various fora where he is invited as a speaker.
If he can transmit this positive image of the continent it is because he observes that Africa is experiencing economic change unprecedented in its history and offers opportunities that might be the envy of many other parts of the world.
Furthermore, contrary to the belief of many economists, Rob thinks “the risk is very low in comparison to the return on investment offered by the burgeoning African markets”. The rise of the middle classes, the many innovations and improvement in the business climate and good governance are all factors which will result in a “tsunami of investments”, a flood of financing to come from countries including the United States or the United Arab Emirates, or places where his organisation has set up its offices.
The ambition of his organisation is to play a significant role in the socio-economic growth of the continent by assembling a broad range of capital in key projects, such as infrastructures or new technologies, to mention just a couple. As Rob stresses, “we want to connect dynamic opportunities with dynamic capital”. He provides his members, a hand-picked group, with information about emerging business opportunities in Africa. In very select business meetings, he puts business leaders in contact with each other. A glance at social networks reveals personalities such as Ashish Thakkar (founder of the Mara group, a pan-African conglomerate with earnings of more than 1 billion dollars, according to Forbes magazine), or Sunil Vaswani (founder of the Stallion Group based in Dubai which generates earnings of more than 3.7 billion in Africa alone).
Although he sold his company “Marquis Jet Europe” some years ago, the aviation industry continue to call on his expertise. For example, the second largest private jet company in the world, Vista Jet, appointed him chairman of the advisory board in 2010.
“Rob always says: “it is better to apologise than to be constantly waiting for permission.” He teaches us that if we have an opportunity, we have to grab it.”
Alongside Invest Africa, he co-founded African Capital Investments (ACI), a bank specialising in independent international investments (of the type sometimes known as “boutique investment banks”) which offers strategic and financial advice, and in fact facilitates mergers and acquisitions of partners on the continent. Currently, ACI has a network of 350 members and, although it is still a young organisation, counts some notable successes amongst its achievements. For example, in the second half of 2016, this financial institution completed a number of investments such as the 61-million dollar cash acquisition of the Finance Bank of Zambia (Zambia’s sixth-largest bank) by Atlas Mara Limited. Gianpaolo Pera, Chief Executive Officer of African Capital Investments, believes that “Rob’s career has led him to work in a broad range of sectors (aviation, technology, media, the luxury sector etc.). Consequently, he has the capacity to understand and identify the opportunities and challenges presented by a business and also be able to offer considered advice on the way in which such a business could increase and ensure its expansion.” That is why his view and perception of Africa cannot be a matter of indifference.