By Greg Roumeliotis and Simon Meads
BERLIN Feb 29 Sporting what he joked was
his "Gordon Gekko" shirt, Irish rock star Bob Geldof cut an
unlikely private equity figure on Wednesday as he exalted the
industry's virtues and urged top financiers in their annual
gathering to invest in Africa.
Speaking for an hour without notes at the SuperReturn
International conference in Berlin, Geldof made an impassioned
address peppered with expletives designed to tug on heartstrings
but also appeal to private equity's profit-making instincts.
"You must go and kick the tyres. You are the guys who go
where capital needs to go. Capital will only go where it is
sent," Geldof said, stretching out his arms as if to reach his
audience of private equity executives.
"Do we leave this vast continent, with all the resources we
will ever need, do we leave it to China? Eight miles from
Europe, do we just leave it to them?" he asked, referring to the
distance across the Strait of Gibraltar separating Spain and
Geldof first became famous as the frontman of Irish punk
rock group The Boomtown Rats, but his work on Africa has
overshadowed his early rock career, with his name forever tied
to the Band Aid single and Live Aid concerts that raised
millions of dollars for African aid.
He is now the chairman of an Africa-focused private equity
fund which said earlier this month it had raised $200 million
from investors, close to half its targeted size of $450 million.
Dubbed 8 Miles, the fund plans to invest in companies that
can develop into "African champions" in sectors such as
agribusiness, telecoms and consumer goods.
"We put together our little thing - a goldilocks thing, not
too small, not too big, just right. And we will make a lot of
money, a lot. For me I want to leave behind me firms, farms,
factories. Fuck the money, that's me," Geldof said
RATE OF RETURN
The fund is promising investors an internal rate of return
of over 25 percent after a year in which the S&P 500 U.S. stock
index was flat and investors are hungry for yields they cannot
find in listed equities and bonds.
"He is so right, Africa has great potential, and he was
really good in his presentation," said Wael O. Bayazid, a
managing director with private equity firm Carlyle Group LP,
which is raising a sub-Saharan African fund.
Private equity is often criticised for saddling companies
with debt only to sell assets, shed jobs and take out profits --
an image which has not helped the U.S. Presidential candidacy of
Mitt Romney, a former private equity executive.
"I have learned that private equity, contrary to the
Romney-esque debate in the United States at the moment, can be a
major vehicle for positive change in this world," Geldof said.
Geldoff referenced the big payday of some of private
equity's titans, including Henry Kravis and George Roberts, who
got $94 million each in 2011 from buyout firm KKR & Co LP
, in also making a wider case for philanthropy.
"You have got the four houses, the three jets, the 10 cars,
the 65th fucking Picasso. What's the point? So its stuff, and
right now it's the stuff that will get us out of that mess,"