For invited investors

The founding round, in detail

This page is for people who have been invited to subscribe. Please don’t forward the link or the password. Figures here are proposals and illustrations, not promises.

The round

Ten places, four already taken

The founding cohort closes when the tenth subscription clears. There is no waiting list and no second founding round.

$20,000

Minimum subscription, payable in dollars or in naira at the CBN rate on the day

Founding shareholders in total

$200k

Starting pool once all ten have subscribed

3 years

Minimum hold for the founding cohort

12345678910

Places 1 to 4 are committed. Places 5 to 10 are open.

Terms

How the subscription works

The shareholders’ agreement is the binding document. This table is a summary of it.

Entity	Private limited company	Incorporated under the Companies and Allied Matters Act 2020.
Minimum subscription	$20,000 or the naira equivalent	Paid in full on signing, at the prevailing CBN rate. There are no instalments.
Founding share price	Par value plus a small premium	Founders buy before any portfolio growth is priced in. Later rounds will be priced at net asset value per share.
Fees	No management fee in phases 1 and 2	Running costs come from an operating reserve inside the pool, about 5% of capital.
Dividends	At the board’s discretion, from Year 3	Paid only from realised gains. The default is to reinvest, and from Year 3 shareholders vote each year on which to do.
Minimum hold	Three years	A transfer inside the first three years needs unanimous board approval. After that, the standard process applies.
Exiting	Board-approved transfer on 90 days’ notice	Shares are not listed. Existing shareholders get first refusal at an independently assessed price, then the board can approve a new buyer.
Reporting	Quarterly accounts and an annual audit	Valuations, transactions, cash position and profit and loss every quarter. Audited financial statements once a year from an external auditor.

Proposed allocation

Years one and two

The investment policy caps real estate at 40% and any single private business at 5% of net asset value when we invest. The committee has to vote to go past either limit.

40%30%25%

40%Equities: dividend-paying companies on the NGX, with some dollar-listed shares
30%Real estate: residential and commercial property in Abuja and Lagos
25%Fixed income: FGN bonds, treasury bills and money market funds
5%Operating reserve, held in cash to cover running costs

Illustrations

What a $20,000 stake could become

Three portfolio returns, compounded yearly on one $20,000 stake in dollar terms. This is arithmetic, not a forecast. Real returns will be uneven and some years may be negative.

Conservative

12%a year

Property and fixed income do their job. Equities go nowhere.

End of year 1	$22,400
End of year 3	$28,100
End of year 5	$35,200
End of year 7	$44,200
End of year 10	$62,100

Base case

18%a year

Property rises at a normal pace, NGX blue chips perform and one private investment works out.

End of year 1	$23,600
End of year 3	$32,900
End of year 5	$45,800
End of year 7	$63,700
End of year 10	$104,700

Upside

25%a year

A strong property cycle and two private investments that exit well.

End of year 1	$25,000
End of year 3	$39,100
End of year 5	$61,000
End of year 7	$95,400
End of year 10	$186,300

All three use the same bar scale, so they can be compared by eye. Figures are rounded to the nearest $100, before any dividends are paid out and before tax.

Risks

What could go wrong

Read this part twice. Each risk carries the board’s own rating and what has been put in place to manage it.

Naira and FX

High

A weaker naira can wipe out dollar returns even when naira returns look good.

Part of the equity book will be held in dollar-listed shares, and results are reported in dollar terms where possible. This reduces the risk. It does not remove it.

Illiquidity

Medium

You can’t sell your shares on an exchange, and you can’t exit on demand.

Exits run through the shareholders’ agreement: notice to the board, first refusal for existing shareholders, then a board-approved buyer.

Execution

Medium

Good governance on paper does not guarantee good returns.

The committee works to a written mandate with concentration limits, the advisory board reviews strategy, and the annual audit puts an outsider on the numbers.

Founding team

Medium

In the early years the company leans on a small number of people.

If a director leaves, the company carries on. Quorum rules keep the board working, and that director’s shares can pass to an approved buyer.

Concentration

Low

Too much money in one asset class or one deal.

Real estate is capped at 40% of the portfolio and any single private business at 5% when we invest. Going past either needs a committee vote.

Regulatory

Low

Rules for investment vehicles in Nigeria can change.

Capstron is a private company, not a public fund or scheme. The company secretary tracks regulatory changes, and counsel is preparing the company’s SEC filing.

Advisory board

Who the board turns to

Advisers don’t vote and don’t handle money. They review strategy and are a phone call away when the board needs a second opinion.

Adviser · Economics

Group chief economist at one of Nigeria’s largest industrial groups.

Adviser · Pensions

The pioneer director-general of Nigeria’s pension regulator.

Adviser · Investment

An investment specialist and former director at the Central Bank of Nigeria.

Adviser · Banking

Executive director for business development at a Nigerian non-interest bank.

The long view

In time, the board wants Capstron to hold a major stake in a Nigerian non-interest bank.

This is a direction, not a commitment. Any move like it would need a shareholder vote and regulatory approval.

Next steps

From invitation to shareholder

Ask whatever you need to at any stage. Nothing is binding until the shareholders’ agreement is signed.

Now
Commitment letter
Signing reserves your place. It is not binding at this stage.
Within 30 days
Shareholders’ agreement
Circulated once all ten places are committed, then signed by everyone.
Within 45 days
Subscription
Your $20,000 goes into the company’s escrow account and stays there until the minimum is reached.
Within 60 days
SEC filing
Counsel submits the company’s filing to the Securities and Exchange Commission.
Then
First deployment
The investment committee approves the Year 1 plan: a property deposit, the first equities and a fixed-income buffer.

Questions first

Talk to us before you sign

Speak to any director, or write to contact@capstroncap.com and someone will reply.

Email us

The founding round, in detail

Ten places, four already taken

How the subscription works

Years one and two

What a $20,000 stake could become

What could go wrong

Who the board turns to

From invitation to shareholder

Commitment letter

Shareholders’ agreement

Subscription

SEC filing

First deployment

Talk to us before you sign