Prince, who credits the Navy SEALs with bringing out his entrepreneurial spirit, said there were two main risks that perhaps every businessman in Africa must face.
The first one is the political risk in some countries, and the second is the very bad transportation and infrastructure, which means a high cost of doing business there.
“If you can’t get to market cheaply enough, that’s not interesting,” Prince said.
Many foreign investors came to Africa purely for its natural resources, he said, but they forgot that transporting those resources was as important as exploring and producing them.
This is interesting news. As I mentioned before in prior posts, Africa will be a top focus for PMSC’s just because of all the business and resource extraction potential there. A company like Frontier Resource Group can easily be the company that can link the investors with those PMSC’s that could protect and insure those investments in Africa. Or at the least, FRG can help to identify those investments with the highest chance of success based on the risk assessments done by FRG.
The mention of Chinese investors partnering with FRG is key as well. I mentioned in prior posts about an increase in business for South African PMSC’s or consultants from the Chinese, and it would make sense that Prince would want to step in and serve this particular group of investors. -Matt
Website for Frontier Resource Group here.
Into Africa: Ex-navy SEAL sets trail for investors
November 19, 2012
By George Chen
Erik Prince of Blackwater fame has set up a company that will be the ‘search radar’ to help firms manage the risks of investing there
The man who built up Blackwater – the giant private security force that guarded US diplomats in some of the world’s most dangerous places, including Afghanistan and Iraq – sees Africa as his future.
After Erik Prince sold his firm to investors about two years ago, the former officer in the Navy SEALs – the special US military force that killed Osama bin Laden last year – set up a new company called Frontier Resource Group (FRG) early this year.
FRG is an Africa-dedicated investment firm partnered with major Chinese enterprises, including at least one state-owned resource giant that is keen to pour money into the resource-rich continent.
“Africa is so far the most unexplored part of the world, and I think China has seen a lot of promise in Africa,” Prince said during a brief trip to Hong Kong last week to meet potential Chinese investors and partners. “But the problem is if you go alone, you bear the country risk on your own. You have to get support and maintenance there,” Prince, FRG’s managing partner, told the South China Morning Post in an exclusive interview.