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While the pandemic necessitated a shift to online meetings and virtual engagement, there are just some business fundamentals that need to be done in person, especially in emerging markets where it’s important to see what’s happening on the ground.
This is the view of Bryan Turner, a partner at Spear Capital. The private equity investment holds stakes in various companies in Southern Africa.
“With smaller economies, it’s not always possible to just do dashboard due diligence,” says Turner. “To be on the ground is almost a necessity.”
Spear works with fast-growing companies in Zimbabwe, Malawi, South Africa and Zambia.
“As we are not always the majority owners, a good working relationship where all partners are aligned is critical. As useful as financials and other virtual forms of due diligence can be, you get as much a sense of whether a company’s worth investing in by visiting its premises and meeting with its management team face to face,” says Turner.
In Zimbabwe, Turner adds by way of example, it’s not as easy to compile a digital overview.
“To really gain an insight into what a company does or to gauge the needs of a community, it’s imperative that our team is able to spend quality time meeting with various people. Being in town creates opportunities to bump into key players from a cross section of sectors; crucial for fostering relationships.”
Zoom alone ain’t good enough
Another advantage of being on the ground is that it’s possible to visit a company’s premises to gain an accurate overview of the scale of the business and its daily operations. “You are less likely to gain that kind of understanding from a Zoom call. You have to be there physically,” he adds.
But, this is not to say online meetings and virtual collaborations are not important, says Greg Gatherer, account manager at Liferay Africa. “The opposite is true. There is, after all, a reason that remote work is constantly shown to improve productivity. It’s also true that some people collaborate better in virtual environments, where they feel less restricted in sharing their ideas.”
He adds: “There is no way I would be able to connect with people in multiple countries around the continent on a daily basis if I was relying on in-person meetings.”
But Turner and Gatherer agree that the way forward is preferably a hybrid of the two; with virtual meetings to establish and maintain connections and in-person meetings to be approached with purpose.
“On a trip to Kenya at the tail-end of 2021, I was reminded that in-person meetings still have a place and may even be helpful in accelerating digital transformation,” says Gatherer.
Turner concurs, saying: “I can meet with colleagues and investors in Norway and portfolio companies across the SADC region through the course of the day. But it’s also true that you miss out on things when you don’t meet in person whenever possible.
“We believe in this people-focused approach to investment being absolutely key, and being based on the ground in markets often considered unstable or volatile is Spear Capital’s differentiator.”
Spear works with companies that have been built by people with a vested interest in its ongoing success.
“Being in a position to acquire a stake in these companies requires personal engagement and connection,” he concludes, “in addition to the research and preparation we can do online.”