Nimrod Gerber
Interview with Nimrod Gerber
MANAGING PARTNER, VITAL CAPITAL
Lives in: Cyprus
Nimrod Gerber is the managing partner at Vital Capital, an investment firm with a strong focus on sub-Saharan Africa. The firm invests in sectors including food, healthcare, infrastructure, and water. Jaco Maritz spoke to Gerber about where he sees the most promising investment opportunities across the continent.
Topics discussed include:
- Gerber’s journey to becoming a private equity investor in Africa
- Harvesting agribusiness returns
- Tapping into Africa’s water industry
- Unlocking the affordable housing market
- Stitching together healthcare opportunities
- Deals that got away
- Mistakes made and lessons learned
- Top African countries for investment
Watch the full interview:
Harvesting agribusiness returns
Food and agribusiness are among Vital Capital’s key investment themes. The firm’s sweet spot is investing in businesses that collaborate with small-scale farmers, rather than being primary growers themselves. This involves supplying inputs to smallholders, processing their produce, and connecting them to markets.
One of Vital’s successful agricultural investments was in Aldeia Nova, an Angola-based company. Aldeia Nova operated as an agro-industrial centre, selling farming inputs such as seedlings, fertilisers, day-old chicks, and poultry feed to surrounding smallholder farmers. The company also provided training in modern agricultural practices. Importantly, Aldeia Nova bought the farmers’ output, processed it where necessary, and sold the finished products in the capital, Luanda.
Gerber notes that, at one point, Aldeia Nova was the largest egg producer in Angola and was also involved in milk and vegetable production. He adds that many of the farmers increased their incomes by as much as ten times.
Vital has since exited its investment in Aldeia Nova. “We have made a good return. It was a successful investment,” says Gerber, noting that this model can be replicated in other African countries. Some of Vital’s other food-related investments, including Kenyan macadamia producer Privamnuts [Read more: Kenya: Making money exporting the world’s most expensive nut] and Ugandan dairy company Tomosi’s Farm, follow a similar approach of collaboration with small-scale farmers.
Tapping into Africa’s water industry
An estimated 411 million people in Africa still lack access to basic drinking water. Water is also one of Vital Capital’s primary investment themes.
The firm focuses on backing companies that provide potable water, wastewater treatment, and water for irrigation to corporate clients, utilities, or government entities. For example, Vital has previously invested in a business that provided wastewater treatment plants to private sector clients in Uganda, Ghana, and Angola, where the company was paid for building and operating the facilities.
Vital Capital Environment, the firm’s water infrastructure platform, plans to provide potable water infrastructure to French-speaking African countries, covering everything from water capture to piping and distribution to communities.
Gerber explains that Vital Capital avoids direct involvement in the provision of piped water to end consumers. “Do we as private sector want to be the ones that cut your water when you didn’t pay? I think that’s not our place. So we’re happy providing water to the utility company or the centralised entity, but we’re trying to avoid being the one doing the collection and basically, you know, cutting your water because you didn’t pay your bill.”
Unlocking Africa’s affordable housing market
Vital Capital has also been involved in affordable housing developments in countries such as Angola and Ghana. Gerber says middle-class housing is a tricky sector, in large part due to the underdeveloped mortgage sector in many African countries.
He explains that to achieve success in large-scale affordable housing development, it is crucial to have intermediaries – either large corporates or government entities – that guarantee buyers and payment for a substantial portion of the development. “If you want to build large scale and quick, you have to know who you are selling to … You have to have an [intermediary] between you and the final clients, someone that will … create a clear inflow of eligible buyers.”
Stitching together healthcare opportunities
So far, Vital Capital has completed just one healthcare deal in Africa – the Luanda Medical Center in Angola, a facility designed to provide high-quality healthcare and diagnostic services.
Gerber explains that, in terms of healthcare, the firm is currently eyeing Kenya, where he sees opportunities to consolidate the country’s highly fragmented healthcare sector. “Always when I visit Kenya, I see all the different healthcare providers there, from large hospitals to clinics to startups to nurse-led clinics in the community, to pharmacies as primary treatment centres like Goodlife [Read more: Building a retail chain in East Africa: The story of Goodlife Pharmacy] … So there are so many opportunities, and it’s very, very, very fragmented.”
