Dequity Capital raises $1.3b for diverse equity funding

Entrepreneur Kadeen Mairs, head of microfinance firm Dolla Financial Services, is spearheading a new private equity outfit called Dequity Capital Management Limited, DCML, that has so far raised some US$8 million, or around $1.3 billion, and has its eyes set on casting a wider net to snag an investment pool of US$1 billion, or more than $157 billion, from Jamaicans overseas.

The funds are to be deployed into a diverse range of Jamaican businesses.

Dequity Capital Management’s wholly owned fundraising and cash deployment arm is Dequity Capital Fund Managers, for which Companies Office of Jamaica records list Mairs as sole director and Kira Azan as company secretary.

Mairs told the Financial Gleaner that several appointments to the companies’ boards will be announced soon. Other directors and shareholders of offshore-registered Dequity Capital Management include Montego Bay businessman and medical practitioner Dr Germaine Spencer and United States-based health industry executive, engineer and author Garold ‘Gary’ Hamilton.

CEO Adrian Smith is also a minority shareholder in the business.

Smith told the Financial Gleaner in an interview that fundraising was initially slow for the start-up DCML that was registered in 2019, just ahead of the COVID-19 pandemic, when key investors suddenly froze activities as initial pandemic lockdowns and uncertainty ruled the day.

“Initially, people were interested. Investment was booming in Jamaica. The stock market was flourishing and people were willing to take on certain risks. Then COVID happened. We had key investors who were interested in what Dequity was trying to do, which is to become a pure private equity company, not just a real estate investment trust, or REIT, but being very diversified in its portfolio. Now, investors are coming back to the market,” Smith said.

Increased investor appetite

In his view, the pandemic has increased investor appetite, with many having now realised how easily, suddenly and completely money flow could stop. He said Dequity is intent on offering investors a slice of a range of sectors, including returns from real estate, healthcare, gaming, education and agriculture.

For Smith, the diversified nature of Dequity’s holdings gives comfort to investors, whose risks are spread over several industries, with each sector providing a hedge should one area be negatively impacted for whatever reason.

Dequity is looking to raise US$2.5 million, or just under $400 million, this year, primarily to close out a deal to acquire Savanna-la-Mar, Westmoreland-based private hospital Royale Medical Centre and seed several real estate deals through its REIT. The private equity firm is buying 40 per cent of the Royale Medical, a 25-year-old small hospital, clinic, imaging centre and pharmacy operated by gynaecologist and obstetrician Dr Evan Nepaul, and plans to expand into Montego Bay and Kingston, the footprint of the specialist health facility that specialises in maternity care and delivery.

Dequity owns 100 per cent of cambio operations of Mairs’ M24 Investments and 25 per cent of Dolla Financial. which is 75 per cent owned by First Rock Capital Holdings, a listed private equity firm and real estate investor that bought a majority stake in the microlender from Stocks & Securities Limited. Mairs had initially sold controlling interest in his then two-year-old microfinance business to Stocks & Securities in 2016.

Dequity has also teamed up with the well-known businessman Charles Johnston-led Johnston Development Group, in which the private equity company owns a 20 per cent ownership stake. It has also invested about $50 million in education and creative sector business iCreate Limited and taken a seat on the board of the listed junior market company, of which it now owns 25 per cent. Among its most recent acquisitions is the February 1 purchase of a 30 per cent stake in Montego Bay-based printing and marketing business Elite Conceptz and Solutions Limited, principally owned by Kareem Jennings.

The private equity firm is now said to be in the process of conducting due diligence on its latest targeted acquisition, a 3,000-acre livestock farm, with plans to expand the agriculture venture into abattoir operations, meat packaging and distribution.

Mairco, a technology and computer hardware company that Dequity fully owns along with related parties, has been added to the investment holdings, giving the private equity firm a foothold in the gaming industry that the business serves.

The Dequity search lenses are said to be focused on well-managed firms with a track record of profitability, but looking for expansion.

“There is no limitation, but it depends on who the principal shareholders are and the management teams of the companies. In the private equity business, relationships are important. We are not seeking to buy out companies; we are taking an associate stake. So, we have to have confidence in the team that is there to help bring that company to the next level,” Smith said of the Dequity approach to choosing investment targets.

The private equity firm is also said to be receiving approaches from several companies wooing its investing interest.

huntley.medley@gleanerjm.com