Miami investor eyes Cuba deals starting with Havana Triathlon

Miami investor eyes Cuba deals starting with Havana Triathlon

The Cuban economy isn't technically open for American investment yet,
but one Miami-based private equity veteran is already building a
position there.
BY JONATHAN LEVIN
Bloomberg

The Cuban economy isn't technically open for American investment yet,
but one Miami-based private equity veteran is already building a
position there.

Joe DaGrosa, 51, is trying to raise about $25 million through his
holding company, General American Capital Partners, to target niches
including sporting events and advertising in Cuba.

In addition to his own seed capital, he's looking for investors from
family offices, DaGrosa said Monday in an interview in Miami. General
American Capital also may go public eventually on the London AIM
exchange for small-cap companies, he said.

One of DaGrosa's holdings, MultiRace LLC, bought 49 percent of a Spanish
company with exclusivity rights for the La Habana Triathlon in Havana.
DaGrosa said he can own the stake because revenue is earned outside of
the island: foreigners pay to run, but Cubans register for free.

Normalizing Relations

President Barack Obama has been moving to normalize diplomatic relations
with the island nation that soured more than five decades ago during the
Cold War, which effectively ended most forms of American investment. In
March, Obama visited Cuba with his family, the first trip by a U.S.
president in 88 years, since 1928.

In December 2014, Obama announced that the U.S. would move toward
normalizing relations with the former Soviet ally. Last May, the State
Department took Cuba off the list of state sponsors of terror. In
August, the U.S. reopened an embassy in Havana for the first time since
the Eisenhower administration in 1961 cut diplomatic ties with Fidel
Castro's new regime.

And a new agreement means airlines this year could start flying
scheduled service between Cuba and any city in the U.S. for the first
time in more than a half century. Until the new pact, only charter
flights between the two countries were permitted.

DaGrosa projected the changes would eventually help spawn a middle class
and make for an attractive return on investment.

"Improved relations will create a win-win for international investors
and the Cuban people," DaGrosa said.

Private Equity

DaGrosa, a co-founder of private equity firm 1848 Capital Partners, said
he is also attracted to the billboard business, although he's still in
the "exploratory" phase of that potential investment.

The firm, started in 2003, is winding down its investments but still
owns a charter service that operates under Eastern Air Lines. That
business runs 90 flights a month to Cuba. He bought the brand several
years ago after the original Eastern Air Lines went bankrupt in the 1990s.

Liquidity could present a challenge when it comes to Cuba investing,
DaGrosa said. That's one of the reasons he said he was opting for the
holding company structure and the possible IPO, he said.

Source: Miami investor eyes Cuba deals starting with Havana Triathlon |
In Cuba Today - http://www.incubatoday.com/news/article86905317.html