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Jeff Towson's  Instablog

Jeff Towson
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I am a private equity investor,Peking University professor, and author. My academic research is on Chinese consumers and competitive dynamics. My investments are in US-Asia healthcare and consumer product deals. I live in New York and Beijing. My info and publications can be found at... More
My company:
Towson Capital
My blog:
Jeff's Blog
My book:
One Hour China Book
  • How Prince Alwaleed Won Big In Africa

    An interview with Kofi Bucknor, Managing Partner of Kingdom Africa Management and advisor to Prince AlwaleedKofi Bucknor, Kingdom Africa Management

    In 2003, Prince Waleed made a surprising announcement. While the rest of the world was looking at tech stocks, housing booms and Asian growth opportunities, Waleed announced he was going to Africa. And he was going big.

    It was a shocking idea. Almost no major investors were in Africa at that time. Africa was "stagnant". Africa had political problems. Africa was the "lost continent". The investor sentiment at that time could not have been more negative.

    But Waleed is the world's first global value investor. And he has, like most master value investors, a finely- tuned radar for when market sentiment is wrong or overly pessimistic. And Africa looked like a continent-sized mispriced value play.

    In 2003, Waleed had already been doing deals in Africa for almost 8 years. He had been on the ground and met with leading companies and government officials in virtually every country. He knew what the economic fundamentals actually were.

    And the truth was that only a few African countries actually had political or other problems. The other countries had attractive growing economies. But the West was painting the entire continent with a general anti-Africa bias.

    In short, Africa had good assets and they were seriously mispriced. It was a continent-wide investment opportunity almost perfectly suited for Waleed's style of emerging market value investing.

    So in coordination with Zephyr Management, Waleed launched one of the first pan-Africa private equity firms. It was a growth equity vehicle targeting the entire continent. And he built into this vehicle unique strengths. Through a Western partnership, it had deep PE expertise from day one. Through his network, it had access to international capital (Africa was capital poor at that time). And because of its founder, it had a unique reputation (who you are matters when doing deals in Africa).

    It was the classic Waleed value- added approach - target a large and mispriced opportunity with a vehicle that has tremendous advantages. Fast-forward to today and Kingdom Africa Management is one of the leading private equity firms on the continent.

    Investors have since woken up to the Africa opportunity. Private equity and hedge fund managers now routinely travel to the continent and report back about the quality assets they find there. Last year, the Carlyle Group and even far away Brazilian BTG Pactual announced new Africa- focused funds ($500M and $1B respectively).

    But Waleed got there first. And in retrospect, the Africa opportunity is arguably one of the greatest stories in value investing. How often is an entire continent mispriced?

    This month we spoke to Kofi Buckner, Managing Partner of Kingdom Africa Management, about his experiences over the past 9 years. We asked him about a few of his deals, where he sees Africa today and where he thinks the next opportunities will be.

    The interview is available for download here (for free of course).

    Feb 02 1:38 AM | Link | Comment!
  • Interview With Carlos Zalles Of LW Investment Management On BPZ Energy And Other Latin America Value Plays

    Western investors and Latin American are the "odd couple" of value investing.

    In terms of geography, culture and even language they are quite close - especially when compared to other developed to developing economy situations. And you have a long history of personal relationships between the regions which is critical for cross- border deals.

    And yet, Western capital and Latin American opportunities remain conspicuous far apart.

    It's a problem but its also an opportunity. This is the type of situation where trusted investors can add tremendous value.

    In this vein, we spoke with Carlos Zalles of LW Investment Management. Mr. Carlos Zalles has been operating between the West and Latin America for over thirty years, with a strong focus on natural resources. We spoke with him about what opportunities he sees in Latin America today - and what his predictions are for the next 3-4 years. (continued)

    The rest of the article is available for here. Please sign up for Buffett in Beijing Report at

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jan 05 8:48 PM | Link | Comment!
  • The Unknown Chinese Billionaire Who Just Bought A123

    Lu Guanqiu of WanxiangChinese Wanxiang just won the auction for A123's assets for $260M. A couple of factoids that should catch your attention:

    - Wanxiang was founded by Lu Guanqiu, who is the richest person in Zhejiang at $2.6B. He is virtually unknown in the West today. But this is a situation that is becoming common. A Chinese billionaire the West is basically unaware of snapping up US assets. Recall Wanda's recent purchase of AMC Theatres.

    - Wanxiang offered $450M for A123 earlier this year.

    - Wanxiang is still virtually unknown in the West. At this time there is not even a wikipedia entry for them.

    Bloomberg article is here.

    Jan 05 8:18 PM | Link | Comment!
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