Capital Alliance Private Equity (CAPE) case discussed at ABC Conference

“Rod, would you mind starting us off?” When Professor Walter Kuemmerle asked how many HBS students were present in class at the case discussion held during the Africa Business Club Conference, I don’t think all eight would have eagerly raised their hands if they imagined the possibility of a cold call. Thankfully, Rod Norman (NC) skillfully defused the cold call in spite of little preparation, an art that could not have been pulled off by many guests attending the conference.

Approximately ninety participants from places far away as Ghana, Ivory Coast, Nigeria, London, and many states in the U.S. came prepared as the cases were mailed to them a couple of weeks in advance. Many of them potential applicants who were skeptical that Finance could be taught using the case method.
The CAPE case centered on a dilemma faced by CEO Okey Enelamah, MBA ’94, and Chairman Dick Kramer, MBA ’58, in deciding how to evaluate the private equity firm’s first investment. The stakes are high as this is the first firm of its kind in Nigeria //, and the success of the investment in GS Telecom could set a precedence for Private Equity firms in a West African country besieged by high inflation and political instability at the time. CAPE is also counting on the investment for credibility to raise future funds.

In roughly sixty minutes, Professor Kuemmerle led a spirited discussion about the opportunity, context, people, and valuation, the four keys critical to evaluating the investment. In my opinion replica watches, the most insightful comment made during the discussion was by Inalegwu Okwa, a guest who was the only one to value the investment at $11 million from a series of four choices starting at $2 million. When asked by Professor Kuemmerle to discuss the numbers he ran in coming up with the valuation, calmly responded “to be honest, I was eating my lunch when we voted for our estimates of the pre-money valuation, and $11 million just sounded good to me.”

The discussion ended with additional insight from Thomas Barry, MBA ’69, a Director of CAPE, who was here as a sponsor and active participant on several fronts. While this was the first time ABC had featured the case discussion in its conference, it received such rave reviews that we intend to make it a tradition.