Boston, MA (PressExposure) September 03, 2011 -- Impact investing advocacy group, Alternative Asset Analysis (AAA), has welcomed moves by anti-poverty campaigner, Bob Geldof, to establish a fund for investment in Africa.
The investment vehicle, which has already managed to gather £120 million in private equity funding, is said to have become attractive thanks to the struggling European economy and volatile equity markets.
The '8 Miles' project is intended to invest in projects in Africa that will help the local communities to grow and become more self-sufficient, while providing developed countries with the added bonus of the 'brains and muscle-power' of the developing world.
This is according to Geldof, who said the fund has become popular as more investors look to put their money into emerging economies. AAA's analysis partner, Anthony Johnson, said, "It's not surprising that more and more wealthy individuals and fund managers are turning to impact investment funds, like Mr Geldof's.
"It makes sense, in the current economic climate, to invest cash in emerging economies and focus on reducing the risks in a portfolio through diversification. Of course, from an ethical point of view, investing in projects in Africa is a solid decision."
Bob Geldof claims that the West will become increasingly reliant on the developing world for labour, skills and talent as its own workforce ages. He also claims that the race for raw materials will bring more prosperity to Africa. "Currently 80 per cent of exports from Africa are unprocessed raw materials. There's your opportunity: they need manufacturing," stated Geldof.
He added that Africa is vital to the process of globalization, and this was echoed by the fact that six of the world's top ten fastest growing economies in 2010 are within the continent.
AAA is a major advocate of impact investing and ethical investment projects that ensure they are both socially and ecologically responsible. It supports investment in emerging economies through forestry investment via firms like Greenwood Management, which allow people to make direct investments into sustainable plantations that help protect native forests in Brazil.