Thursday June 9, 2011 Lisbon, Portugal...Fundraising peaks in 2005 & 2007 due to: • In South...
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“Growth through Private Equity Investments in Africa” Thursday June 9, 2011 Lisbon, Portugal African PE: Opportunities and Challenges
Transcript of Thursday June 9, 2011 Lisbon, Portugal...Fundraising peaks in 2005 & 2007 due to: • In South...
“Growth through Private Equity Investments in Africa”
Thursday June 9, 2011 Lisbon, Portugal
African PE: Opportunities and Challenges
About AVCA
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not-for-profit membership association formally established in 2002
promote growth of PE and VC industry in Africa through:
Research
networking
training and capacity building
promotion of best investment practices and professional standards
advocacy
Membership
3
Full membership – Africa focused VC and PE firms
Associate membership – professional services firms, academic institutions, investors in funds
Board
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BOARD MEMBER COUNTRY AFFILIATION
TSHEPIDI MOREMONG Botswana 8 Miles
MATTHEW TRONIAK USA Lixus Caspian Management
STEVE ANTWI-ASIMENG Ghana Fidelity Capital Partners
TOKUNBOH ISHMAEL Nigeria Alitheia Group
HAKIM KHELIFA Tunisia AfricInvest/TunInvest
OKECHUKWU ENELAMAH Nigeria African Capital Alliance
ANTHONY SIWAWA Botswana Venture Partners Botswana
GLORIA MAMBA South Africa Development Bank of Southern Africa
MARK PAPER South Africa Business Partners International
DAVID ROESKE USA Soundpost Partners
The African PE Landscape
PE Asset Class in Africa: 2004 – 2008
• Total funds raised in 2004-2008 amounted to $12.5bn. They have grown from $919m in 2004 (9 funds) to a peak of $3,957m in 2007 (27 funds)
• 52.8% of funds were raised by Pan-African funds, followed by Southern African (23.6%) and North African funds (18.2%)
• Largest fund type generalist private equity funds principally providing expansion capital, except for an established buy-out niche in South Africa
Region Number of funds
Total funds raised
(US$ m)
Pan Africa 24 6,627
Southern Africa 22 2,963
North Africa 28 2,285
West & Central Africa 12 496
East Africa 6 177
Total 92 12,548
Source: CDC
Funds raised in Africa: 2004 – 2008 F
un
ds
ra
ise
d
Vintage Year
North Africa
East Africa
West & Central Africa
Southern Africa
Pan Africa
$2.8bn
$1.6bn
$3.9bn
$3.2bn
$0.9bn
Fundraising peaks in 2005 & 2007 due to:
• In South Africa, both Ethos & Brait raised funds in 2005: Ethos V ($750m) and Brait IV ($800m)
• Pan African fund raising activity was boosted in 2007 by funds such as Pamodzi Resources
($1.3bn), the Pan-Africa Infrastructure Development Fund ($625m) and Actis Africa 3
($414m)
Source: CDC
African PE Landscape – Post 2009
16 Africa focused funds closed or reached their first close in 20101
126 funds currently in the market looking to raise funds1
Specialised / sector specific funds being raised
Increasing interest from large global fund managers and fund of
fund managers
First Africa fund-of-funds raised: South Suez
Increasing international institutional interest in African private equity
8 1Prequin database
African PE Landscape – Recent fund closes
Fund Fund Type/ Sector AUM USSm
Close
Helios Investment Partners Pan-Africa 875 2011
Emerging Capital Partners Pan-Africa 613 2010
Kingdom Zephyr Pan-Africa 492 2010
Aureos Capital Pan-Africa 381 2010
Phatisa Africa Agriculture Fund Pan Africa - Agriculture 135 2010
Vital Capital Pan-Africa - Agriculture 250 2011
African Capital Alliance Regional –West Africa 500 2011
Aureos Healthcare Fund Pan-Africa 100 2011
Agrivie Fund Pan-Africa - Agriculture 110 2010
Africa Infrastructure Fund Infrastructure 300 2010
Catalyst Principal Partners Regional – East Africa 75 2011
Adlevo Technology 52 2010 9
The African PE Opportunity
African Growth: A compelling story for PE
11 Source: McKinsey Global Institute: Lions on the Move
CAGR GDP Growth Rate 2000-2008
A diversified growth story
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CAGR, % 7.1
6.8
5.5
7.8
4.6
24.0
3.9
7.5
5.9
8.7
Sector share of change in real GDP 2000-2007
13
Source: IMF World Economic Outlook April 2010
% GDP
Africa – A sustainable growth story
Key Statistics
US$1.6 trillion – GDP
US$860bn - Consumer spend
60% - Share of world’s uncultivated arable land
52 – number of cities with 1 million+ people
100+: number of companies with turnover of US$1bn
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US$2.6 trillion – GDP
US$1.4 trillion – Consumer spend
1.1 billion – number of working age Africans (2040)
50% - proportion of Africans living in cities by 2030
128 million – number of African with discretionary income
AFRICA 2008 AFRICA 2020 and beyond
Source: McKinsey Global Institute: Lions on the Move
Africa too risky Markets too small and illiquid Limited investment and exit opportunities
Too few fund managers with strong track records
Lack of knowledge of the asset class among local institutional
investors
Limited investment from local institutional investors
The Challenges: Perceived and Real
AVCA’s Role
Inadequate resourcing Financial
Human Resources
High turnover of management
3 locations within an 8 year time frame Geographically dispersed Board
AVCA Challenges
Short to medium term objectives
Require Executive Chairman/ Adviser
Hire high caliber Managing Director with requisite support
Restructure and enhance Board
Develop and member-centric business plan
Adequately capitalize the organization
Re-engage with our stakeholders
Key Milestones
Working with Adviser to turnaround organisation
On-going process for the recruitment of a CEO
Board restructuring underway
Working with AfDB to adequately resource and support AVCA
