Miami Investor Eyes Cuba Deals Starting With Havana Triathlon

  • Investor DaGrosa raising funds for Cuba sports, advertising
  • His holding company already has investment in 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.

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.

Before it's here, it's on the Bloomberg Terminal.