Archive for the 'SME' Category

Korea Exchange success story with SMEs

This article summarizes a talk by Honghee Shin, Executive Director of Korea Exchange, at the World Exchanges Congress in March 2016, which highlighted the KRX experience and lessons to be learned.
Building an exchange environment for small and medium-size enterprises and hi-tech companies to raise capital on a securities exchange requires strategic coordination and support by many different government agencies. The Korean Exchange (KRX) has grown to be the world’s third biggest stock exchange for listing and trading SMEs by creating a virtuous cycle in each stage of growth generates cash-flows which in turn fuel other stages.

The original Korea Stock Exchange was set up in 1956 and KRX evolved in 2005 to offer comprehensive front-to-end services. It has KSD (depository) as a 70% owned-subsidiary and also owns 76% of >koscom, a technology subsidiary. It offers a full range of products, trading and market data, as well as the central counterparty (CCP) and it is a self-regulatory organization performing its own market surveillance.

In 2015, KRX had 1,961 listed companies, 8th highest in the world, and traded $1,929 billion of securities, achieving the 10th highest level globally, according to World Federation of Exchanges. The main board is called KOSPI market and it has a futures and options market that was rated 12th in the world.

koreaSMEs160719_diagramvirtuouscycle

It has two boards for SMEs:
• KOSDAQ was launched in 1996, and provides funds for well-established SMEs and “technology-savvy” area including information technology (IT), bio technology (BT) and cultural technology (CT).
• KONEX was launched in 2013 exclusively for SMEs and start-up companies to support their early-stage financing and development through the capital market.

The ratio of market capitalization compared to GDP is higher at KOSDAQ in Korea than any other major SME markets in Asia. In global terms it ranks third among world SME markets for market capitalization and daily trading volume and 4th with 1,061 listed companies. Technology has been the main driver of the market – IT, BT and CT companies made up 68% of the market in 2015, up from 63% in 2005. In particular, biotech has grown its share 4 times and forms 17% of the total market.

KONEX had 24 companies in the third quarter of 2013, but increased that 5 times to 128 listed companies by the end of 2015. Market capitalization is up 8x, and daily average trading value is up 4x over the period. It offers a fast-track “ladder system” which 14 companies have scaled to transfer from KONEX to KOSDAQ.

Much of the success of the exchange can be attributed to the coordinated efforts of Government, the exchange and other stakeholders.

koreaSMEs160719_diagramstakeholders

Key supports from Government include:
1. Tax incentives
– Corporate tax exemption for investing in newly-listed shares(within 2 years)
2. De-regulation for M&A
– Between KONEX and unlisted stocks
– Relieving corporate governance structure
– Waiver of obligation on appointment of external director and full-time auditor
3. Eased accounting standard application
– Exemption of K-IFRS accounting standard.

Concessions offered by KRX are:
1. Relaxation of Listing Requirements
– Lightened listing requirements for corporations with 20% of total investment from angel investors and venture capital
2. Modified disclosure obligation
– Reduction of timely-disclosure
– Exemption of quarter and semi-annual reports
– Mitigation of obligation to submit registration of securities
3. Minimum deposit requirement for investors adjusted from $300,000 to $100,000.

The exchange brings together companies from diversified industries, with a convergence of the high-tech companies that are the driving force of the economy. There is a solid investor base, including active retail investors with ample liquidity, and the exchange offers them a new way to find investment opportunities. The KRX itself offers relaxed listing requirements and less disclosure and maintenance costs. Government offers supportive policies towards gradual de-regulation as well as tax incentives and benefits.

The 2 Korean boards, KOSDAQ and KONEX play a critical role in a virtuous circle of growth and investment. Typically venture capital (VC), angel investors and government (through policies as well as funds) invests into start-up companies. These grow to list on KONEX, where professional investors tend to invest in what re now start-up SME companies, and VC investors can take some funds out to re-invest into fresh start-ups. As the company grows further, it can more to KOSDAQ where often non-professional investors may be interested in what have evolved into established SMEs, and the VCs can take more funds to reinvest into the earlier growth stages. The virtuous circle means that each stage adds momentum to the other stages, fuelling further growth – for the diagram see above.

How do stock exchanges stay relevant to their societies? SMEs and exchanges

“How do we become relevant to society again?” This is the challenge posed to world’s securities exchanges this morning by Ashish Chauhan, CEO of BSE India securities exchange. He told the World Exchanges Congress in London this morning (Tue) that stock exchanges that concentrate only on trading for the sake of trading are in a zero-sum game.
They should look to add value in areas where there will be gains. He sees the gains will be huge for proactive securities exchanges: “In next 20 years we will create more wealth than in last 10,000 years – will the exchange industry participate in that”.
Chauhan points out that India has 1 in 6 of world’s population but only 2% of its land mass, there are more people than Europe and USA combined and 50% of population are under 25 years old. The challenge is to create jobs and to provide the skills for employment. Exchanges should ask if that will be done by private equity and other channels, or will the exchanges be able to play a major part?
BSE India’s response is to set up BSE SME Platform. Its website “offers an entrepreneur and investor friendly environment, which enables the listing of SMEs from the unorganized sector scattered throughout India, into a regulated and organized sector.”
Chauhan says that going forward technology will change the world and India with its young population skilled in technology will be driving that change. How does each exchange solve the problems of the society it is operating in?

Europe’s integrated capital solutions to big issues

Earlier Cees Vermaas, in his first engagement as CEO of CME Europe, spoke of his vision of Europe in 2030. A centralized market and Europe-wide clearing and settlement will allow relentless pursuit of efficiency and falling costs. London will remain the financial centre, but smart networks will allow other specialist centres to grow all over Europe. This will include more exchange centres to provide funding for SMEs and for infrastructure. Exchange-linked investment into all forms of energy and will support transitions into new and efficient forms of green energy. European bond markets are only 30% of USA volumes at present but in coming years that will change fast with less fragmented bankruptcy regulatory frameworks

Stock exchange experts urge focus on small and medium enterprises

An international panel of securities exchange experts, meeting in New York this month, has
set up a task force comprising a broad, cross-disciplinary group of global experts focused on improving the vibrancy of securities exchanges for small and medium-size enterprises (SME), including the possibility of establishing a specialized SME exchange.

The International Stock Exchange Executives Emeriti, Inc. ( ISEEE) brings together senior executives and former executives from securities exchanges. Participants at the 4-day New York meeting, including special guests, were from Argentina, Australia, Austria, Canada, Egypt, Germany, Israel, Kazakhstan, Luxembourg, Malaysia, Namibia, Russia, Turkey, Slovenia, Sweden, Switzerland, Ukraine, United Kingdom, United Arab Emirates, United States, and Zambia.

Donald Calvin, ISEEE chairman, said: “Increasing access to capital markets designed specifically for small and medium-size companies can help continue to revitalize jobs and economic growth worldwide”. He noted the group has “concern that public policy in many areas of the world is driven by data and individuals with a large-capitalization focus. These views may sometimes be incompatible with the maintenance of a vibrant small-capitalization ecosystem that can support capital formation, innovation, economic growth and job growth.”

Meeting participants also discussed financial transaction taxes on securities and agreed the taxes would be unlikely to contribute positively or to achieve the desired objectives, but could have negative effects on markets and economies where they are launched, Mr. Calvin said. The delegates heard that many European countries are reconsidering earlier enthusiasm for the taxes.

For additional information about the ISEEE, its members and copies of papers presented at the meetings, see www.capitalmarketexperts.org. The body held its first meeting in Orlando, Florida in March 2008 and created a collegial educational forum of former and current exchange officials to identify, discuss and assess the issues germane to the global community of exchanges. In December 2008 the ISEEE was incorporated as a New York not-for-profit educational corporation.

Among the purposes of the ISEEE are to facilitate contact with experts in the fields of finance, regulation and technology as well as to leverage the expertise of former senior exchange executives from major exchanges across the world. It also aims to provide educational opportunities by sharing information on developments in market structure and regulation, on listing, trading, disclosure, clearing and settlement, access to the markets, and enforcement, as well as investor protection, among other issues. In addition, it facilitates opportunities for members and guests to establish and maintain business and social relationships.

The ISEEE currently has member-participants. Many have been or are officials of stock and derivative exchanges from North and South America, Europe, Africa, Asia-Pacific and the Middle East, while others are experts in related activities.

Jacana merges with InReturn Capital, launches $75m private equity fund for SMEs

Entrepreneurs running small and medium-enterprises (SMEs) in West and East Africa stand to benefit from a new $75 million private equity fund. The announcement follows the news on 29 Jan that two long-term partners are merging.
InReturn Capital (www.inreturncapital.com) is a private-equity company based in Nairobi (Kenya) that invests in SMEs across East Africa, and it plans to close a legal merger in the first quarter of 2013 with London (UK)-based Jacana Partners (www.jacanapartners.com), a private equity specialist in SME investments, which has been building capacity in private equity managers in Africa.
The new partnership will offer a significant boost for East African entrepreneurs seeking value-add expertise and growth capital. InReturn was investing in transaction size of $0.5m-$1.3m and the partnership with Jacana will mean increased access to private equity investment, dedicated investment teams on-the-ground coupled with international private equity expertise and larger deal sizes of between $1m-$5m.
InReturn has rebranded as Jacana Partners. The two firms have been working together for 3 years. Jacana’s West African operations (previously Fidelity Capital Partners) rebranded in August 2012. This creates a leading pan-African SME private equity firm with pan-African coverage which will manage the new $75m SME fund expected to close later this year.
Jacana currently operates in 6 markets (Ghana, Kenya, Liberia, Sierra Leone, Tanzania and Uganda) and intends to move into 2 new countries with the new fund, possibly Ethiopia, Nigeria and/or Francophone West Africa. It is the only pan-African private equity company with a permanent commitment to the SME sector.
Jacana has invested over $20m to date in 20 portfolio companies employing over 1,300 people. In East Africa, 5 investments have been made to date in a stone quarry, an eye care centre, a supplier of tarpaulins to the relief sector, a serviced office provider and a logistics company and several other transactions are contemplated in the next few months.
Professor Njuguna Ndung’u, Governor of the Central Bank of Kenya commented in a Jacana press release: “East Africa is undergoing a period of rapid economic growth largely fuelled by the expansion of our small-to-medium sized enterprises – key generators of job creation and GDP growth. The merger being rolled out today brings scale to the financing of SMEs which will boost their contribution to East Africa’s economic growth. It is my expectation that we shall see more similar initiatives to scale up financing to SMEs that lie at the heart of development blueprints for governments in the region.’’

Passionate about Africa’s entrepreneurs

Getting closer: Ezra Musoke (left) and Anthony Gichini (right) of InReturn Capital flank Simon Merchant CEO of Jacana Partners.


Anthony Gichini, Partner at InReturn Capital said: “The merger of InReturn Capital with Jacana Partners represents a big step forward in private equity investment for SMEs in East Africa. Jacana’s unique model combines international private equity experts with highly-experienced local teams, meaning our entrepreneurs benefit from strategic advice from international business experts as well as dedicated African investment managers on-the-ground who can add-value and provide hands-on management support. This combination is our winning formula which helps us build strong businesses and deliver superior returns.”
Simon Merchant, CEO of Jacana says: “Jacana Partners is a pan-African private equity firm that invests in entrepreneurs, builds successful SMEs and delivers sustainable financial and social returns. We do this because we are passionate about entrepreneurs as the key drivers of job creation and long-term economic development in Africa. Jacana is uniquely structured to overcome the challenges of private equity investing in SMEs in Sub-Saharan Africa. Combining internationally experienced private equity veterans with highly skilled teams on-the-ground, Jacana has the experience, knowledge and resources to structure great deals, grow sustainable businesses and deliver superior returns.
“By merging our African and European operations, we are consolidating our business into a single fund manager, operating under the Jacana brand. As well as investing the remaining capital from our existing funds, the new Jacana will deploy a new $75m SME fund that we are currently in the processing of raising from international investors.
“The new fund will allow us to significantly increase the scale and geographic reach of our operations and will be invested in SMEs in up to 8 countries in East and West Africa. We firmly believe that a unified Jacana operating under the unique Jacana identity is the optimal platform upon which we can fulfill our mission of building the best SME private equity team in Africa, creating sustainable jobs and supporting long-term economic growth.”

Egypt’s Nilex exchange for SMEs adds 23rd listing

The Egyptian Exchange (EGX –www.egx.com.eg) has approved the listing of the 23rd company on Nilex (the Nile Exchange – www.nilex.com.eg), the EGX market for growing medium and small companies. A meeting of the listing committee on 17 January approved to list the shares of Al Fanar Contracting Construction Trade Import And Export Co, which has 8 million shares, at a par value of EGP1.00 (USD0.15) each, according to the Nilex news feed. The shares were due to be added to the database with effect from 20 January but were not to be traded until the company and its Nominated Advisor comply with listings requirements.
Listing standards set by the Egyptian Financial Supervisory Authority (www.efsa.gov.eg) require a disclosure report and an approved study on the fair value of the company’s shares. The company has 6 months to meet other conditions set by EFSA (Board of Directors decree no 81 of 17 Oct 2011) or its listing “should be considered as if it never took place”.
For instance, also on 17 Jan the Listing Committee decided that the listing of the shares of National Investment and Reconstruction (Nirco) shall be terminated and it should be considered never to have been listed and it was removed from the EGX database effective 20 Jan 2013.
The previous Nilex listing was International Company for Medical Industries (ICMI), approved on 30 Dec and listed on the database from 31 Dec, with a share capital of EGP4m ($604,000) at par value. Trading would wait for the requirements to be complied with. The Egyptian Modern Education Systems (MOED) was approved on 12 Dec and added to the database on 16 Dec.
Companies wishing to list on the Nilex must work with a Nominated Advisor and new rules and requirements have been issued. There are 35 approved nominated advisors listed here. According to the Nominated Advisor requirements, the Nominated Advisor acts as coordinator between issuer and the exchange, advises and helps the company on all responsibilities during the application process and after listing, helps the company fulfill ongoing disclosure obligations, informs the regulators of non-compliance, helps the company with its initial public offering, and must provide research coverage. These obligations last for 2 years from date of listing.
Nilex started trading on 3 Jun 2010 and the trading sessions were set from 11am-noon with an automatic close period from 11:50-noon. The initial listings were: El Badr Plastic; Masria Card; TN Holdings for Investment; Kato Agriculture Development Co.; Utopia Real Estate Investment and Tourism; Ameco Medical Industries; International Company for Fertilizers and Chemicals; Al Oroba Trading Mining and Supplying; Al Moasher for Programming and Information Dissemination and El-Barbary Investment Group (B.I.G) with trading suspended in the last 2 until they submitted the disclosure reports. All started trading at par value.
According to the latest market report (posted 21 Jan here but updating daily on this link), the most active company yesterday was Marseille Almasreia Alkhalegeya For Holding Investment with 34 trades totaling EGP141,061 ($21,300) in value, followed by Utopia with 24 trades totaling EGP111,398.

Zimbabwe Stock Exchange set to pay off its suspended CEO

According to news reports, the Board of the Zimbabwe Stock Exchange is close to negotiating an exit package with CEO Emmanuel Munyukwi, who was suspended in May. Board chairperson Eve Gadzikwa was reported by The Independent’s businessdigest that the board was in the process of concluding negotiations and an announcement is due in the coming week. ZSE operations executive Martin Matanda is acting chief executive.
Munyukwi has been CEO since 2001 but has been a key manager of the ZSE before that and was a valued colleague when this correspondent was running the Namibian Stock Exchange before 2000. The businessdigest suggests that although Munyukwi had been suspended on charges of alleged incompetence, currently the Board was negotiating an exit package with him and a figure of US$1 million was mentioned. Tony Barfoot, the previous CEO of the ZSE, was reportedly removed as consultant in April 2012, according to a report in Newsday.
There is no news on who will be the new head of the ZSE. It is possible that a potential candidate will be sought among Zimbabweans with experience of working in an automated and advanced securities exchange.
The Securities and Exchange Commission of Zimbabwe is reportedly working with the ZSE, introducing a central securities depository and electronic trading, with plans to automate the ZSE by March 2013, according to the news reports. One report says that SECZ has contracted a private company to develop a framework for establishing an electronic securities trading platform. State-owned ZB Financial Holdings has 13% of the CSD, National Social Security Authority 13% and Infrastructure Development Bank of Zimbabwe 10%, according to a shareholding agreement. The Expression of Interest tender for the CSD was published in 2010.
SECZ is also working with the ZSE on demutualization, although the ZSE is a private company more structural transformation may be possible. The tender for the advisory work on “ZSE Privatization” had a closing date of either March or September 2012, but the bidder was supposed to find their own funding for the work.
The Securities Act was amended in August 2012 to make SECZ more effective, extend its powers and give more protection to investors. This requires all securities exchanges in Zimbabwe to be companies, not mutual associations or other corporate bodies. There is a single Investor Protection Fund and the SECZ takes over regulation of asset managers and managers of collective investment schemes from the Reserve Bank of Zimbabwe. The CEO of the SECZ is Tafadzwa Chinamo.
Listings Executive Lina Mushanguri also told businessdigest that the ZSE is drafting a framework to set up a board for small and medium enterprises as part of the ZSE, which she said they would call it the “SMEs Stock Exchange”. This will have adjusted rules and regulations. The newspaper reports that income for the ZSE “last year” was $1.6m and expenses were $1.0 million, giving a surplus of $612,947. The ZSE website has been inoperative for many months and the ZSE annual report is not available online.
By 2 November the ZSE market capitalization had climbed back to $4 billion, after being below this for more than a year. It reached a high of nearly $4.3 billion in May-June 2011. Foreign investors contributed 80% of turnover in October, according to a report in the Standard newspaper.

Abraaj Capital acquired Aureos Capital

Abraaj Capital, a leading private equity manager investing into Africa, Middle East, Asia and Turkey, recently announced the acquisition of Aureos Capital, a global private equity fund management group investing in small and medium-sized enterprises across Asia, Africa and Latin America.
The combined entity will have approximately US$ 7.5 billion in assets under management, presence in over 30 countries and 153 investments managed by a seasoned team of over 150 investment professionals with unmatched local expertise.
Aureos has operations in over 20 countries, US$ 1.3bn in funds under management and over 250 deals completed in the SME segment in the last 20 years. Its reputation is growing SMEs through combining local insight, extensive proprietary networks and presence. Abraaj’s $650 million SME platform is Riyada Enterprise Development (“RED”).
The transaction will create the world’s largest SME focused private equity group targeting SME investment opportunities across the high growth markets of Asia, Africa, Middle East and Latin America. Aureos and RED will benefit from synergies and operate under the single brand “Aureos”, but all Aureos and RED funds will continue according to their existing fund mandates and investment guidelines. The expanded Aureos platform will retain its inherent structure and team within the Abraaj Group.
Mustafa Abdel-Wadood, CEO of Abraaj Capital Limited said: “This is a very exciting opportunity for Abraaj Capital and enables us to further extend our leadership position in emerging markets. Aureos is a globally respected private equity firm with a dedicated team of investment professionals who have extensive experience and knowledge of the markets they invest in, with a geographical footprint totally complementary to Abraaj with no overlap. Both Abraaj Capital and Aureos are ‘home grown’ emerging markets private equity firms with a similar philosophy and shared values. This acquisition is an important step in our expansion into Latin America, South East Asia and Sub-Saharan Africa and a new chapter in the Abraaj Capital story”.
The proposed transaction has been strongly supported by Aureos’ core investors, including CDC the UK’s Development Finance Institution. Rod Evison, Managing Director, commented: “Aureos has been able to build its investment business on a track record of careful and market-orientated investment in SMEs, so today’s announcement is good news for entrepreneurs in emerging markets. It will mean increased access to capital and local expertise for businesses to help them grow and reach their potential”.
The acquisition, which is subject to necessary approvals from the relevant authorities and one group of fund investors, is expected to be completed in the first quarter of 2012.
Abraaj Capital group was formed in 2002 and is headquartered in Dubai. It has raised over $7bn and distributed around $3bn to investors. It employs over 170 and has a presence in Riyadh, Istanbul, Cairo, Singapore, Mumbai, London, Karachi, Beirut, Ramallah, Amman, Casablanca, Algiers and Tunis. The group has helped accelerate and facilitate the growth of over 50 companies in 15 countries in the region, in attractive and fundamental sectors such as healthcare, education, energy, aviation and logistics. It manages 8 funds: 4 private equity Funds, Riyada Enterprise Development (a Fund dedicated to small and medium enterprises in the Middle East), Kantara (a Fund dedicated to small and midcap enterprises in North Africa), ASAS (an income-generating, real estate Fund) and a 2004 vintage real estate Fund. The Abraaj Capital group currently has over $6bn of assets under management. In 2011, Abraaj Capital was ranked the largest private equity firm in emerging markets worldwide by Private Equity International. In addition, Abraaj Capital has won many regional and international awards, including the ‘Middle Eastern Private Equity Firm of the Year’ for six consecutive years, awarded by Private Equity International.
Aureos was established in 2001 and has increased its funds under management to $1.3bn and extended its geographical footprint to over 50 emerging markets covering Asia, Africa and Latin America, by establishing 17 regional private equity funds. It has 25 offices worldwide, over 90 investment professionals. Investors in Aureos funds include institutional investors, bilateral and multilateral development finance institutions, pension funds, sovereign wealth funds, fund of funds, family offices and foundations and high net worth individuals.

Casablanca Stock Exchange grants to encourage SMEs

Morocco’s Casablanca Stock Exchange (www.casablanca-bourse.com) is offering grants to small and medium enterprises to encourage them to raise capital. It is offering up to 500,000 MAD (approximately $63,740 at current exchange rate for Moroccan Dirhams) from 1 July 2011 to 31 December 2012. According to an announcement on the bourse’s website, the offer is because of important role played by SMEs in the development of the Moroccan economy.
The grant is given under certain conditions and the SME must be listed on the stock exchange’s Growth or Development boards and have equity of less than 50 million MAD. It also needs to issue at least 20% of its capital and to use the IPO to raise capital. Normally the cost of an IPO is 2.2%-5% of the capital raised and the stock exchange says this can be a barrier to raising more capital.

First listing for 2011
STROC Industrie S.A. (www.stroc.com) on 30 June became the first new listing on the Casablanca Stock Exchange in 2011. The company had planned to offer 288,515 extra shares at MAD357.00 each, raising a total of MAD 102,999,855 ($13 mn), with the offer dates from 20-22 June. However the offer attracted 7,229 bids for a total of 2,515,369 shares, 8.7 times oversubscribed, and was closed on 21 June.
STROC joins the “Engineering and Industrial Equipment” sector. Société de Travaux de Réalisations d’Ouvrages et de Construction Industrielle was founded in 1989. Al Istimrar Holdings has 57.7% of the shares and Nabil Ziatt a further 14.6% while the free float on the stock exchange is 23.1%. The company said it chose to raise capital for its development through the capital market as part of its strategy to be open and transparent to its customers and the financial community. It will use the capital to expand its plant and equipment and build a new headquarters.

IFC invests $10 mn in East Africa’s Catalyst I private equity fund

The International Finance Corporation (www.ifc.org), a member of the World Bank Group, on 8 March announced it was investing $10 million in equity in Catalyst Fund I LLC. The fund aims to stimulate employment and accelerate economic growth across East Africa by improving access to equity financing for emerging and mid-size companies.
Catalyst Principal Partners (www.catalystprincipal.com), a private equity firm based in Kenya, has raised $70 million for the fund. Other investors include the African Development Bank, the Commonwealth Development Corporation, Germany’s development finance company DEG and PROPARCO of France.
The fund will invest in growth companies with dynamic management to drive growth, regional expansion, consolidation, and performance improvement. Investments in target companies will range from $5 mn to $15 mn. It will be managed by Catalyst Principal Partners LLC, and aims to invest in Kenya, Uganda, Tanzania, and other East African countries. It will provide financial and management advice to up to 14 mid-size companies across different sectors.
Paul Kavuma, Chief Executive Officer of Catalyst, said: “We anticipate additional substantial commitments in the coming months to achieve our target fund size. We are particularly encouraged by the interest expressed from regional pension funds and insurance companies, noting that we have already received significant capital from reputable local institutions and private investors.”
Jean Philippe Prosper, IFC Director for Eastern and Southern Africa, said: “IFC is supporting this fund to help East Africa’s entrepreneurs gain better access to finance and promote the high growth and dynamic companies that encourage sustainable development and create jobs and new opportunities.”
IFC is the largest global development institution focused on the private sector in developing countries. Investments climbed to a record $18 billion in fiscal 2010.

Jacana partners with Ghana’s Fidelity Capital Partners private equity manager

Jacana (www.jacana.org), a UK-based group that supports emerging SME private equity firms in Africa, has launched its second investment, a strategic partnership with Ghanaian fund manager Fidelity Capital Partners Limited (www.fidelitycapitalpartners.com).
Jacana’s investment, announced on 13 December, will enable Fidelity Capital Partners to expand the senior team. Jacana will also provide hands‐on management support to the investment team and the portfolio companies ahead of the planned launch of Fidelity’s third fund in 2012.
Fidelity Capital Partners was founded in 1999 and is one of West Africa’s leading SME private equity firms. It manages two SME funds – Fidelity Equity Funds I and II – with a total of $32 million under management.
Stephen Antwi‐Asimeng, Senior Partner of Fidelity Capital Partners, commented in a press release: “We approached Jacana as a strategic partner because we believe that the combination of our local market experience and deal flow with their international expertise in private equity will be a powerful one which will enable us to scale new heights.”
Fidelity manages the funds on behalf of a number of investors, including Ghana’s Social Security and National Insurance Trust (www.ssnit.com) and Venture Capital Trust Fund (www.venturecapitalghana.com.gh), Netherlands-based Oikocredit (www.oikocredit.org) and social venture capital fund Sovec (www.sovec.nl), and leading development finance institutions (DFIs), such as FMO (Netherlands) SIFEM (Switzerland) and Finnfund (Finland).
Claude Barras, Managing Director of SIFEM and Ben Zwinkels, Senior Investment Officer of FMO, both Board Directors of Fidelity Capital, commented: “We believe that the combination of Jacana and Fidelity Capital will enhance returns for all investors and help us to achieve our development goals in Africa. We are excited about working together with Jacana and supporting both partners in their future growth.”
Jacana was founded by European private equity experts and its mission is to contribute to long‐term poverty alleviation by attracting public and private investment to SMEs in Africa and by partnering with and developing local private equity fund managers. Jacana adds capital and expertise and enables its partners to grow their teams, build their track records and raise larger funds. It is Jacana’s second partnership, following its investment in InReturn Capital, an East African SME investment firm, announced in June 2010 (as reported on this blog.
The partnership with Fidelity Capital enables Jacana to extend its footprint in Sub-Saharan Africa and further develop its track record in building successful SME private equity firms.
Jacana was founded in 2008 by a group with substantial experience in the private equity and venture capital industry in Europe. Its co‐founders include Stephen Dawson (a pioneer in the UK VC industry 30 years ago and a co‐founder of Impetus Trust, a venture philanthropy charity), Lord Joel Joffe (a philanthropist with a background in human rights law, a successful entrepreneur and former Chairman of Oxfam), Connie Helyar (a successful entrepreneur in fund administration for private equity) and Simon Merchant (a successful entrepreneur and VC investor). Jacana’s vision is the creation of a sustainable, responsible and robust SME growth capital industry in Sub‐Saharan Africa that supports local SMEs, fuels economic growth, creates employment and thereby makes a major contribution to the reduction of poverty in Africa.
Fidelity Capital Partners Limited was established in February 1997 and started business in November 1999 as a venture capital and private equity fund manager and corporate finance advisor. Fidelity Capital’s shareholders include its management, local and international private investors, and development finance institutions. It is also the local investment partner of Africinvest Capital Partners Limited (www.tuninvest.com), a Pan‐African private equity fund management company.