Hlumelo Biko sets up cannabis investment fund
South African investor Hlumelo Biko is to launch the Africa’s first medical-cannabis-focused private equity investment fund. The son of black consciousness struggle icon Steve Biko told Radio 702 on 1 November 2020 that he was establishing the AfriCan Growth Fund 1, which would finance emerging South African cannabis entrepreneurs.
Biko, a well-known venture capitalist and philanthropist, is the son of Dr Ramphele Mamphele, former politician and director of the World Bank.
Biko himself worked at the World Bank in Washington DC until 1998 when he returned to South Africa to set up the Circle Group, a financial services company and major provider of services to the mining industry.
Avoid the Low End
Biko, who’s been in the venture capital business for 20 years, said he hoped to take the fledgling South African cannabis industry to the next stage by opening up the way for systematic investment in the industry.
“There are of plenty of opportunities and returns to go around. The major focus for us is to make sure that we don’t have a situation where we are at the low end of the market from a national and continental point of view”.
“The focus should be on what the country could make out of this massive opportunity. It doesn’t come around many times around that you can shape an industry, that you can get your country aligned to do all the way from manufacturing, processing, extraction and into the retail side of things” said Biko.
Building a diversified local cannabis portfolio
The fund will be backed by OSO, a Cape Town-based alternative investment fund.
AfriCan managing partner Mark Diuga says discussions are being held with Afriplex and Releaf Pharmaceuticals as well as other major players in the South African cannabis industry.
“We have a mandate not only to do well but to do good’ he said. “We want to be active locally and internationally by building a diversified portfolio that highlights South African home-grown product”