Johannesburg—If you are on the internet, go to the Google.com or
Excite search engine, and type in
Africa.com corporate. You
will be served Africa.com's corporate information page. Open it.
You will learn that Africa.com's mission is to
dominant electronic gateway to and from Africa, that its
headquarters are in Durham, North Carolina, and that it has a large,
You will also learn that
the lead investor in Africa.com is the New
Africa Opportunity Fund, a $120m private investment equity fund whose
investors include Citigroup, Sun America, Northwestern Mutual Life
Assurance and the Overseas Private Investment Corporation. The fund is
advised by New Africa Advisers, the first US asset management firm to
focus on pan-African investment.
Next, navigate to Africa.com itself. Go to the bottom of the page and
try clicking on
corporate info. The link has been killed, which
you can confirm, if you have the necessary software, by examining the
underlying HTML code.
Then go back to the page you obtained from Google. Near the top right
hand corner you will see the words:
2000-08-31. Between that day, when Google cached the page, and
now, something bad happened at Africa.com. Today, no one, not even a
machine, answers the phone at Durham headquarters.
The New Africa Opportunity Fund was launched in June 1997 with $80m in loan capital guaranteed by the Overseas Private Investment Corporation, a US government agency, to stimulate investment in southern Africa. The corporation selected New Africa Advisers to manage the fund, which was to be fully capitalised at $120m, with Citigroup and others subscribing the balance through equity stakes.
New Africa Advisers is a subsidiary of Durham-based Sloan Financial
Group, billed as the largest African-American-owned investment firm in
America, whose principal, Maceo Sloan, heads the Rev Jesse
Jackson's Wall Street
empowerment project and gives
generously to the Democratic Party.
New Africa Advisers' CEO was Justin Beckett. Formerly described as
alter ego, he also oversaw Sloan's Calvert New
Africa high-risk, low-return mutual fund of southern Africa stocks. A
$10000 investment in the fund three years ago is worth 4600 today.
On Friday, Fred Spar, a spokesman for the Sloan group, said Beckett
had been asked to resign because
his performance has not been
acceptable based on an audit Sloan initiated.
The same day, a corporation spokesman, Larry Spinelli, said Sloan had
voluntarily requested that a new manager be found for the New
Africa Opportunity Fund.
The corporation had then
worked with the fund's equity
partners to pick a replacement
with regional expertise Thomas
Barry of New York-based Zephyr Management. He is highly regarded in
the venture capital industry, and co-manages several African private
equity funds, including the $150m SA Capital Growth Fund, whose
investors include the IBM pension fund and the Rockefeller family.
Neither the corporation nor Sloan would disclose what led to Beckett's dismissal. Beckett himself did not respond to a message left on the answering machine at his North Carolina home. Yet from public records and other sources, it appears he was using the fund to build an African electronic media empire which he and his associates would control when, in the normal course of events, the fund was liquidated and proceeds distributed among the equity partners and management after 10 to 12 years.
The fund invested heavily in launching TV Africa, a fledgling African television network, based in Johannesburg, currently brokering mostly US programming to affiliate stations around the continent. The company's CE, Lemmy Adebule, promised, but failed, to reply to emailed questions.
These included a request for confirmation that members of Beckett's immediate family had held positions at TV Africa.
The fund acquired Africa.com from Johannesburg-based information
technology services company Atio Corporation in March. Atio's CE
Chris van der Sande said his company had invested
incubating the site but
did not want to continue the
exposure. We ended up selling it to the fund. In hindsight, with the
dotcom bubble bursting, I am glad we did. It is a great name for a
portal, but unless you develop it to produce ad revenues, it's a
Very prophetic, but here is the really strange thing: at the time of the sale, the fund owned, and still owns, 41,5% of Atio. Yet Beckett is understood to have paid Atio about 3m for little more than the name Africa.com and then spent twice that developing the site, hiring a huge staff and setting up a head office, not in Africa, where the fund was supposed to be investing, but North Carolina.
Another interesting irony: Allafrica.com, a superior Africa portal with real content and revenue streams not just from advertising but as an information service, had earlier approached the fund for capital, but shied away when Beckett demanded too much control more evidence he used the fund to push his own agenda.
It is perhaps little wonder that Citigroup and the other equity partners began to question Beckett's judgment and motives. What is remarkable, however, is that, at least according to spokesman Spinelli, the corporation, which is obliged to make good with taxpayers' money any loss the debt partners might incur for any reason including mismanagement sat by passively until Beckett's own boss sought his removal.
Remarkable, that is, until you understand why Sloan and Beckett were handed the fund in the first place. Politics, not track record. And why do Sloan and the corporation give Sloan the credit for firing Beckett?
Because the corporation, to please its political masters, has guaranteed another $220m in loans so that Sloan can launch the $350m New Africa Infrastructure Fund. He has until November 30 to find equity partners.