Moscow - Stephen Jennings, the billionaire founder of Moscow brokerage Renaissance Capital, plans to double his investment in Africa to at least $1 billion (R7 billion) this year as a record Russian stock rally stalls.
"If Russia was a once-in-a-lifetime opportunity, sub-Saharan Africa is a second once-in-a-lifetime opportunity," Jennings said last week in an interview at his Moscow office.
Jennings started Renaissance in 1995 with former bankers from Credit Suisse Group, including Boris Jordan, and the bank has since helped Russian companies raise more than $15 billion.
The native New Zealander is looking to Africa as Russia's benchmark stock index heads for the first fall in eight years and as competition increases from Goldman Sachs Group and Lehman Brothers.
Africa's longest expansion in more than three decades is fuelling demand for capital from overseas.
The International Monetary Fund last month raised its economic growth forecast for southern Africa to 6.8 percent this year from 5.7 percent last year, boosted by oil-exporting Angola and Nigeria.
Renaissance plans to open a Dubai office to help channel oil money from the Persian Gulf into Africa.
Jennings, who already has offices in Nairobi, Kenya and Lagos, Nigeria, wants to challenge China, the biggest foreign investor in the continent.
China's President Hu Jintao vowed to boost investment and imports during a 12-day, eight-nation tour in February.
"Africa is going through an enormous renaissance and, unlike Russia in the 1990s, it's not a matter of imagining that it might happen; it is happening," Jennings said. "With the exception of the Chinese, we will be one of the largest financial investors in the region. We have the ability and capacity to make quite big investments and bring in co-investors."
A boom in Russian initial public offerings and mergers, growing markets in Kazakhstan and Ukraine, and an asset management business that has surged a thousandfold since 2003 to $4 billion is helping Jennings expand beyond equities trading.
Russia had its eighth consecutive year of growth last year when the economy reached $1 trillion for the first time since the collapse of communism.
Renaissance plans to have more than 100 people on the ground in both Kiev, Ukraine, and Almaty, Kazakhstan, by the end of the year. The brokerage, which historically has focused on stocks, is also boosting its debt department in Moscow as Russia's bond market surges.
Profit at Renaissance Capital, which includes the brokerage and investment bank units, rose 59 percent last year to $301 million as the Russian Trading System's RTS index jumped 71 percent.
The bank's return on equity was 64 percent. Renaissance Capital is part of Renaissance Group, which also owns a private equity firm, a consumer lending bank and asset management arm.
Jennings owns a controlling stake in Renaissance, according to documents for a 2005 bond sale.
He declined to comment on the size of his stake, which Forbes magazine said in November was worth more than $1 billion.
Renaissance Partners, the private equity arm, already has $500 million of assets in Africa, including a 25 percent stake in Ecobank Transnational, the Togo-based lender that has operations in 17 west and central African countries.
It was targeting more banks and retailers on the continent, Jennings said, declining to elaborate.
Renaissance, which announced nine new hires for Africa last month, including bankers from Credit Suisse and Citigroup, aims to have 100 people working on its business there by the end of the year.
"A lot of people are looking at Africa and it's not going to be easy to grab market share," said Steve Cook, an emerging market credit analyst focusing on the former Soviet Union at Commerzbank in London.
"They haven't been here in any material way. It doesn't work like in the former Soviet Union. Only time will tell."
The company last month helped organise the $300 million stock sale of United Bank for Africa, Nigeria's largest lender by assets.
Renaissance expects to underwrite its first African corporate debt as early as July, and aims to sell those securities to investors in the Middle East.
"Middle Eastern investors will play a major, major role as financial investors in recapitalising the sub-Saharan region," Jennings said.