Homestrings is a platform that offers qualified investors a range of tools to facilitate investment that makes a difference.

ReConnect Africa spoke to Eric-Vincent Guichard, founder and CEO of Homestrings, about the organisation and their plans to connect Africans in the diaspora with secure and profitable routes for investment in Africa.

Born in the USA, where he now resides, Guichard grew up in Guinea and his experience of remitting money 'back home', and the limitations of the available investment options that could really make an impact and be profitable, led him to found Homestrings.com as a web-based platform to facilitate investments by Diasporan Africans in their home country.

A graduate of the University of Dakar in Senegal and Duquesne University in Pittsburgh, Guichard earned an MBA from Harvard Business School, later working at the World Bank as a Portfolio Manager and a technical adviser to sovereign and multilateral institutions worldwide. He is also currently Chairman and Chief Executive Officer of GRAVITAS Capital Advisors, Inc. an asset management firm he founded in 1996 and which advises global and sovereign institutional assets.

ReConnect Africa (RCA): What was the inspiration behind setting up Homestrings?

Eric-Vincent Guichard:   Homestrings.com was born from frustration. I'd read the papers every day and see how well Africa was doing and feel that the options to participate in ways available to institutions were not available to me as a member of the African Diaspora. My investment experience and that of others was very haphazard. I thought that providing some order and transparency to this space might be helpful and potentially make a good business proposition.

The World Bank estimates that there are 23 million Africans living abroad with annual savings of about $35 billion, this in addition to the $40 billion they officially transfer annually in remittances. The numbers are compelling.

RCA: How does it work and who can invest through Homestrings?

Eric-Vincent Guichard:   It’s pretty simple. Homestrings seeks and vets what it thinks are credible investment opportunities across a broad spectrum of opportunities ranging from private equity deals to Sovereign infrastructure bonds, to housing and commercial real estate, to lending, to SMEs. The opportunities are organized in an online catalog structured to reflect your stated preferences (country, region, industry, deal size, promoters, etc.).

So, as a prospective investor, you simply register, qualify and enter your preferences - the catalog calibrates to your profile and you can analyze, undertake due diligence of all opportunities via their Fact Sheets, and then make a decision to invest. Our Administrator and Custodians take it from there. All reports are available monthly in your account, and your basket of investments is audited independently on an annual basis by Deloitte.

Currently, under existing regulations that distinguish between qualified and non-qualified investors, only qualified investors can access the Homestrings catalog of investments. We are working on rolling out similar opportunities for all investor types.

RCA: What, in your experience, are the barriers to investment in Africa for Africans in the diaspora?

Eric-Vincent Guichard:   I think the lack of uniform structures and transparency are key issues. African markets are still young and new rules and regulations are being implemented, but regional disparities still exist. What we want to do with Homestrings is bring a sense of structure and control from the individual investor's perspective. We want to empower the African Diaspora to identify, analyze and invest in opportunities that meet their financial and social interests and that are transformative of the societies that they hail from.

A friend of mine put it succinctly - Homestrings gives the Diaspora the ability to point to an oil rig, a shopping mall or a 5-Star hotel back home and say; “I helped finance that, I own a piece of that..."

RCA: What kind of governance structures does Homestrings have as reassurance for investors?

Eric-Vincent Guichard:   Well, Homestrings Capital Management is a US Securities and Exchange Commission regulated investment advisor. We are applying for FSA oversight as well. In addition, we use Deloitte as auditors for all investments on Homestrings. There is an independent Board of Directors that approves all investment vehicles in the catalog and we use HSBC as our custodian.

This is a professionally managed platform with robust sets of procedures and checks and balances. Each investor has several means of recourse - regulatory, audit and legal.

I've spent over 20 years managing money for institutions like the World Bank, and advising central banks and pension funds around the world. My objectives with Homestrings are to bring that level of diligence and professionalism to the Diaspora.

RCA: Investing through Homestrings and its anticipated returns assumes the continued growth and success of Africa’s economies. What is your take on the likely development of the key African economies over the next decade?

Eric-Vincent Guichard:   Interestingly, the IMF recently announced that 6 of the top 10 growing economies over the next decade will be African. That's not a statement that was made lightly. The Economist, just a few weeks ago, announced in a cover story that Africa has a bright future. McKinsey, the consulting firm, has also identified Africa as a key investment destination. Clearly, there is consensus on Africa. We concur. Homestrings is positioned to help the Diaspora take advantage of that projected growth.

RCA: How does a first-time investor get on board with the process of investing and understand the risks and rewards?

Eric-Vincent Guichard:   The on-boarding process is pretty simple - and made so on purpose. One simply goes to Homestrings.com, press "Investor" and fills out the registration, preferences and qualification forms. An account is created and the growing catalogue of investments can be perused. Each investment has a detailed prospectus which outlines investment objectives, performance targets, risk factors to consider and minimum investments. One has to attest to having read these disclosure documents before being allowed to invest. This is to make sure that each investor confirms that they understand the risks and rewards inherent in the opportunity they are about to invest in.

RCA: What other products do you envisage bringing onto Homestrings to generate both short and longer-term returns?

Eric-Vincent Guichard:   We have created 5 silos of investments: private equity, Diaspora bonds, co-investments/projects, housing and SMEs. We are actively identifying opportunities in each. Within each of these silos we are introducing short term and long term investments. For instance, private equity is typically a long-term investment. However, co-investment opportunities may be made available that present pre-exit opportunities. Moreover, Sovereign Diaspora Bonds can be sold into the secondary market via Homestrings and the sponsoring central bank. In addition, we are forging partnerships to introduce liquidity for some of the long-term investments such as private equity interests in funds.

We are really excited about the Housing module we are launching. We will soon offer the ability to invest in housing projects back home; lend to credible home purchasers and buy units for investment or personal use - all on Homestrings. So stay tuned!

Here are some Homestrings related videos your readers can watch and that we have posted on Youtube.com:

1. Introducing Homestrings

http://youtube.com/watch?v=V1sFY9Lon8s

2. Kenya

http://www.youtube.com/watch?v=25gA-L_g0WM

3. Angola

http://youtu.be/UgxgVBTqT2w

4. Invest in Housing:

http://youtu.be/605vAxQYnew

5. Seek Housing investors

http://youtu.be/1JgcqZ2HwWE