Woodford's Zimbabwe investment raises $50m

Zimbabwean investment company Masawara, which is backed by Neil Woodford in the £18.6bn Invesco Perpetual income funds, has raised $50m towards its capital target since IPO last year.

Woodford invested $25m in AIM-listed Masawara, taking a 29.5% stake in the business, as reported in Investment Week last year.

Zimbabwean newspaper The Herald reports this was followed up with $23m capital raising from a placement of its shares, a significant proportion of the $80m of capital it had initially aimed to raise.

Masawara will use the capital to acquire assets in Zimbabwe identified by chief executive Shingai Mutasa in the agriculture, mining, real estate and telecommunications industries.

The company has so far acquired a 100% shareholding in Zuva Petroleum One, formerly BP Zimbabwe Marketing Services, and Zuva Petroleum Two, formerly Shell Zimbabwe, among others.

Woodford's investment in Zimbabwe created a storm in the asset management industry as the income star is known for backing large-cap, defensive, value stocks in the pharmaceutical and tobacco sectors.

In December 2010, Woodford spoke to Investment Week about the holding: "I am surprised the market has devoted so many column inches to a tiny investment in a Zimbabwean business, rather than devoting some column inches to, for example, my 10% position in AstraZeneca. One is frankly tiny, and one is very significant.

"It is a bet on a post-Mugabe Zimbabwe. It is a bet on the fact that ultimately somebody who is 86 will eventually fall over. Mugabe is still there, the politics are unclear, there are risks about what will happen post-Mugabe certainly. But the fact is Zimbabwe is a potentially attractive place to invest. It is blessed with fantastic natural resources, both agricultural and in other mineral resources.

"Even now, after 30 or more years of mismanagement and corruption, it still has an educational system which is the envy of pretty much the rest of Africa. Literacy in Zimbabwe is higher than in any other country in Africa."