George Rzepecki – Investing in Africa

**Patrick O'Shaughnessy** (0:04)
Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_2** (0:24)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (0:47)
My guest this week is George Rzepecki, the founder and managing partner of Raba, an Africa focused investment firm. George is making investments across Africa in early stage companies.
Africa represents a fascinating opportunity, a huge and diverse population, and enormous room for per capita GDP growth. In our conversation, we cover all aspects of investing in the continent, including unique potential rewards and the largest unique risks. Please enjoy our conversation.

**George Rzepecki** (1:17)
I'd say Africa for me and this emerging markets generally really kicked off in 2006
I was working at Golden Saks, and I raised my hand as one of the analysts there to pursue an opportunity to work in our Bangalore India office.
And I was really amazed by just the magnitude of difference of what was happening in that city, in that part of the world, whether it was new roads and infrastructure, the busyness of the place. It really captured a lot of my attention and was just really cool. And I thought, wow, such a different experience than what I was used to coming up in the US.
And then sort of had the opportunity to come to East Africa and spend some time in 2013, really focused mainly on some work around education.
And you'd imagine 2013, 14, you're in Nairobi, Kenya, and you're probably one of a few venture capitalists or anyone who's interested in technology companies, meeting with entrepreneurs. So in my own curiosity, I would go off and attend tech meetups and meet entrepreneurs. And one thing really struck me then, which was the quality of people I was meeting in these tech get togethers or these one-on-one meetings, it was folks were leading really, really established careers at exceptional companies like Google or Uber or other companies.
And they were coming and setting up shop in Nairobi. At that point, I thought some intriguing ideas. And I knew nothing about the local dynamics of the market, but the thesis that, hey, these people are really smart. And then they were able to attract other smart people to come build companies with them or build that company with them. And it needed a little bit of capital to kind of get started. So this gentle application of early stage capital back in 2013 and 2014, first was just the sheer personal interest. And it really evolved into saying, wow, this is exceptionally exciting. You have this incredibly young continent, average age is 19 years old. You have rapid urbanization. Over 50% of people now live in cities across the continent. You have more and more technology becoming pervasive. Everyone has a handset, cost-curved phone. And I remember buying a used techno phone, which was made by this Chinese manufacturer called Transium. A $20 phone I bought secondhand did virtually most of what I was able to do in my iPhone. And so you're just seeing young people engage with products and services, very different experience than what their parents were doing. So I thought there was a real opportunity to build a layer of products and services for these markets. And specifically, what we kind of define as foundational areas, what that means for us is A, solving really hard problems in areas like how does food get delivered? And how does food make its way from rural parts of the country to urban centers? Because food is prohibitively expensive in many cities across Africa. Take, for example, a banana in Kenya that's being grown just a few miles away from the city center, but it's basically the same price as a banana is in central London that travels thousands of miles to get there. So what creates that dynamic? And so that curiosity led to exploring and meeting entrepreneurs who took on these problems head first, and then that kind of expanded to say, hey, there's an opportunity to build a world class, long-term oriented investment firm focused on these markets. One thing I'll say is Africa is home to 54 different countries, different markets, but there are some structural things that are very much similar, very much the same across our markets that we focus on. So that's the background of how it came together.