Archive for the 'Venture Capital' Category

African Venture Capital Association (AVCA) to provide PE data

** Save the date: AVCA’s 9th conference will be in Accra, Ghana, from 22-24 April, with extra days for GP and LP training (announced today 2 Nov). More details will be available soon **

The African Venture Capital Association (www.avca-africa.org) and Cambridge Associates (www.cambridgeassociates.com), a global provider of independent research and investment advice, have agreed to work together to provide extensive, independent aggregate African private equity and venture capital benchmark data and statistics to AVCA members and other industry participants.
The 2 organizations will issue quarterly performance data which will include African PE and VC industry returns, compared to other market indices. Returns data will be aggregated to protect the confidentiality of individual funds and their underlying portfolio investments. Vintage year returns and aggregate portfolio returns by industry will be reported where the sample size is sufficiently robust to allow disclosure without compromising confidentiality. Cambridge Associates has been advising institutional and private clients on alternative assets since the 1970s and derives its PE and VC benchmarks from financial information in its proprietary database of institutional-quality PE and VC funds, one of the largest such data repositories in the world.
Michelle Kathryn Essomé, AVCA CEO (see below), commented in a press release: “AVCA is absolutely committed to promoting the dissemination of robust, reliable data on private equity and venture capital in Africa. We are thrilled to collaborate with Cambridge Associates, as they have demonstrated the necessary technical expertise, knowledge of the continent, and global track record to meet this objective. I am confident that this will help promote additional transparency and independent benchmarking to the benefit of all industry stakeholders.”
Cambridge Associates will provide the data to AVCA as a service to its members and the global PE and VC industry overall. Cambridge Associates works closely to grow its coverage of the emerging markets PE and VC industries with the international development institutions that are major limited partners in these markets, and also partners with the Emerging Markets Private Equity Association (EMPEA).

More awareness
Ralph Jaeger, senior research consultant and co-head of international private equity and venture capital research at Cambridge Associates said: “We are delighted at the opportunity to work with AVCA to broaden and deepen the industry’s awareness of private equity and venture capital in Africa. Cambridge Associates continuously seeks to expand our manager research coverage to create benchmarks that can serve as valuable tools for the industry. Assessing the attractiveness of private equity and venture capital in Africa will allow investors to better identify local and regional investment opportunities.”

AVCA and Cambridge Associates
AVCA is a non-profit association whose aim is to promote, develop and stimulate private equity and venture capital in Africa through research, advocacy, training, networking and the dissemination of industry best practices. It was established in 2002 and today represents African private equity and venture capital firms, institutional investors, foundations, international development institutions and global professional service firms, amongst others. AVCA.
Cambridge Associates was founded in 1973 and gives investment consulting, independent research and benchmarks, performance-reporting and outsourced portfolio solutions, across all asset classes, to over 900 institutional investors and private clients worldwide. It has more than 200 professionals dedicated to consulting, research, and performance reporting on alternative assets and compiles performance results for more than 4,400 private partnerships and more than 60,000 portfolio company investments to publish its proprietary private investments benchmarks.

AVCA’s new CEO
The African Venture Capital Association (AVCA) announced the appointment of Michelle Kathryn Essomé as its CEO in September, in a press release. She has nearly 20 years of investment-banking experience and has held a range of marketing and origination roles in equities, fixed income, corporate finance and investment management with Merrill Lynch, Goldman Sachs, JPMorgan, Lehman Brothers and Nomura. Michelle holds an MBA in Finance from Columbia Business School, where she was a Robert F. Toigo fellow, and a BBA in Finance from Howard University. She has worked in the US, UK and France and is fluent in French. She commented: “This is an incredibly important time in the development of the African private equity industry and AVCA has a crucial role to play in supporting GPs and promoting the asset class. I am absolutely delighted to be able to harness the support of the African GP community, our DFI partners and peer associations to build a strong, member-centric association.”
“As CEO, my commitment is to ensure AVCA provides consistent, high value services to our members and acts as a catalyst for the development of private equity in Africa.”
AVCA, which is co-chaired by Tshepidi Moremong, also welcomes 2 new prominent members to its board. Runa Alam has joined the board as a co-Chair. She is a co-founding partner and CEO of Development Partners International LLP. Simon Walker has been appointed a Special Advisor to the board. Simon was CEO of the British Private Equity & Venture Capital Association (BVCA) from 2007 to 2011 and was recently appointed as the Director General of the Institute of Directors. For more details of their backgrounds, see the press release.

Working with BVCA
In August, AVCA entered into a memorandum of understanding (MoU) with BVCA to boost the implementation of its re-launched strategy across Africa, according to a report on www.privateequityafrica.com. AVCA is to get technical support from the BVCA including expertise in training African private equity fund managers and other professionals. AVCA will also be able to increase training to pension funds and other institutional investors and to encourage local institutional participation, an initiative supported by the Commonwealth Secretariat.

Private equity in Africa
According to AVCA: “Private equity in Africa has a very important role to play in building better, more sustainable companies, creating jobs and delivering genuine economic growth. The continent’s burgeoning middle-class combined with a growing consumer base and greater political stability is making Africa an attractive investment destination.
“Average economic growth in the region reached 5.8% between 2000 and 2008, more than the global average of 4%, driving interest from global private equity houses. In the first half of this year, US$1.1bn was raised by Sub-Saharan African funds.”

SANAD Fund to target SMEs in North Africa and Middle East

Tiny, small and medium businesses in Egypt and Tunisia, later Algeria and Morocco, are set to benefit from a new €30 million ($43.2 mn) SANAD Fund for MSME (www.sanad.lu). This was set up in August 2011 by German development bank KfW Entwicklungsbank with funding from the German Ministry for Economic Cooperation and Development and the European Commission and will offer debt and equity financing to partner institutions in the Middle East and North Africa (MENA) region that serve micro, small and medium enterprises (MSMEs). Other target countries include Middle Eastern countries such as Lebanon and Jordan.
The fund is expected to attract further investments from public and private bodies. The partners who will help invest the money will be banks, microfinance institutions, financial service providers, leasing and factoring companies, guarantee funds or venture capital funds. The fund will also offer them technical help to build their skills and reach.
Development finance alternative asset manager Finance in Motion GmbH (www.finance-in-motion.com) and Oppenheim Asset Management Services S.à r.l. (www.oppenheim.lu) will manage the new fund which will be structured as a Luxembourg-based Specialized Investment Fund, SICAV-SIF, involving different share classes.
By facilitating access to finance in the region, SANAD – literally “support” in Arabic – aims to strengthen the MSME sector and local financial markets in the MENA region in line with the principles of responsible finance.

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.

$250 million TMT and real estate fund raising capital in East Africa

Kenyan venture capital company East Africa Capital Partners Ltd (www.eacp.co.ke) is to begin raising its second fund next year, with a target size of USD250 million, after its success in fully investing $100 million of the first African Technology, Media and Telecommunications (ATMT) fund. The new fund is to focus on information technology, media and real estate.
In an email to African Capital Markets News, EACP chief executive officer Richard Bell says: “We’ve bet on our view that growth in mass market “home entertainment” in the next 10 years in Africa will be what mobile phones were to the last”.
On technology, the plan is to build massive data centres, generate clean energy to power them, and stimulate the creation of an outsourcing cluster in East Africa. We believe that East Africa is set to become Africa’s ICT Hub.
On real estate, Bell says “Africa is the fastest-urbanizing society in the world.
Africa’s emerging consumer class needs massive amounts of housing”. He says Kenya, for example, needs 250,000 homes a year and is only building 30,000. “Amongst other things our real estate strategy aims to make a dent in that supply-side bottleneck.”
Much of EACP’s Fund 1 investments were channelled through Wananchi Group Ltd. (www.wananchi.com), an Internet and cable television company. EACP has a 51% stake through its ATMT I Fund.
Last month (August 2010) Wananchi and Cisco announced a multi-year contract to roll out “triple play” (broadband, multichannel cable television and voice telephony) to 9 countries in East Africa: Kenya, Uganda, Tanzania, Rwanda, Burundi, Malawi, Ethiopia, Sudan and Zambia. According to the press release: “The contract will enable Wananchi to deploy Cisco’s integrated end-to-end network technology solutions, encompassing Cisco’s Borderless Networks, collaboration and data centre virtualization solutions, as their customer base expands and technology advances.”
According to a report on Bloomberg, Bell says: “We have invested in 10 new TV channels,” he said. The sports channel has started operating while the others will go live over the next month. “In Africa, what you have is satellite TV for the elite. What we are introducing is pay TV for the mass market.” The venture Zuku TV (www.zuku.co.ke) was introduced in October 2008.
The penetration of pay TV in developed economies is estimated at 70-80% compared with 20% in emerging markets, he said and expects this to grow fast over the next 5 to 10 years, if the market gets “the right product at the right price,” he said.
Private Investors, Export Development Canada and the US Government’s Overseas Private Investment Corp. (www.opic.gov) have invested a total of $90 million in Wananchi to date, while Emerging Capital Partners LLC (www.ecpinvestments.com), a Washington-based company that owns 49% of Wananchi, has invested $25 million, according to the report.
Bell told African Capital Markets news that ATMT Fund 1 was basically a TMT infrastructure fund. “Even though we have used Wananchi as the conduit for all of our investments from this fund the investments themselves are quite broad and include:
(1) SimbaNet – corporate voice and data business services
(2) Wananchi Telekom – through which we have invested in the undersea fibre-optic cable TEAMS, and a number of terrestrial cables dark fibre leases to create a international and long distance carrier of carriers business.
(3) iSat – a specialist VSAT and satellite business
(4) Zuku Cable – a mass market retail cable TV business that is deploying triple play across all the major towns in East Africa.
(5) Zuku Satellite – a Direct-To-Home (DTH) Satellite TV business
(6) Wananchi Programming – a media and content business that is building initially 10 new TV channels including a sports channel, a general entertainment channel focusing on African content, a documentary channel and 6 new movie channels.

Jacana makes first investment, into Kenya’s InReturn Capital

A UK-based investment and advisory firm concentrating on African venture capital managers has announced its first investment. Jacana Venture Partnership (www.jacana.org) on 29 June announced that it will invest in InReturn Capital (www.inreturncapital.com), a Kenya-based firm investing in East African small and medium enterprises.
Jacana’s aim is that by promoting a thriving venture capital industry in Africa it will enable small- and medium-sized enterprises (SMEs) to grow and help millions out of poverty through economic development and job creation. Jacana’s unique offering of capital and expertise will enable InReturn to reach its goals more rapidly. Access to finance is a major obstacle to the growth of African businesses.
According to Jacana’s mission statement, SMEs are a crucial driver of economic development in Sub-Saharan Africa. Every $1 invested in an SME generates an additional $10 in the local community and $1 of SME finance creates 3 times more jobs than an equivalent investment in microfinance.
International investors are increasingly interested in Africa but find it hard to choose SME fund managers in the target country since they often lack track records. Jacana mitigates this risk for investors by selecting high-quality teams and providing intensive support to local fund managers through a network of expert mentors – highly experienced private equity and venture capital professionals who can provide hands-on support to local teams. Stephen Dawson, Jacana’s Chairman, has over 30 years’ experience in UK private equity and is already actively involved with InReturn’s deal team in Nairobi.
Jacana selected InReturn as its first local partner because of its strong team and deal pipeline, after an extensive market review. InReturn’s East Africa Fund (target size $20 million) invests in SMEs in East Africa. The capital invested in InReturn’s business will support the expansion of the team into Tanzania and Uganda.
InReturn contributes to the profitability, sustainability and growth of the companies that it invests in through the active participation of its local investment team of 5 Kenyan and European professionals. InReturn East Africa Fund maintains a network of investors in Western Europe and has extensive financial and management experience.
Anthony Gichini, Managing Partner for InReturn Capital in Nairobi, said “Jacana’s investment of capital and expertise will help us to accelerate our business, and deliver returns to our investors as well as development impact in East Africa. Tanzania and Uganda are important markets for InReturn and we see significant opportunities to expand our team into these countries as we build our business together with Jacana”.
Jacana’s expertise, provided through its network of private equity expert mentors, will help InReturn to execute high-quality transactions and raise additional capital from international investors, using Jacana’s extensive contacts in the industry. Together, Jacana and InReturn aim to deliver attractive financial returns to investors in the fund, grow the private equity industry in Africa and thereby support the sustainable development of SMEs, leading to significant job creation in Africa.
Simon Merchant, CEO and co-founder of Jacana, commented in a press release: “This is the first step in growing our network of African partners, supported by international private equity experts. We are delighted to be working in close partnership with InReturn and look forward to supporting this excellent team in making successful SME investments in East Africa.”
Jacana aims to select the capital managers with highest potential growth for inclusion in the partnership network and then to work closely with them to create an attractive investment opportunity for international investors. Jacana is talking to several candidates for its next investment.

Agri-Vie fund close to $100 million target, finding projects

Agricultural private equity fund Agri-Vie (www.agrivie.com) will reach its target of raising $100 million for investment in agricultural projects by February or March, according to an interview with Reuters newsagency on 14 January. It says there is plenty of potential and plans a second fund of up to $300 million.
Earlier in January the fund, launched in March 2008, made 2 investments totalling $10 mln in 2 agricultural projects in Ethiopia and across the region, and it is close to finalizing a $4 mln investment in Tanzania.
Izak Strauss, executive director and chief investment officer, told Reuters they are also considering a second fund: “There is definitely an opportunity to do a second fund substantially larger than the first fund… probably (in the region of) $200 to $300 million.” This could launch in 2013 or 2014.
Agri-Vie, based in Cape Town, focuses on equity investments in a wide range of agribusiness in Sub-Saharan Africa, including processing and distribution. It is backed by the Development Bank of Southern Africa (www.dbsa.org) and private entities including W.K. Kellogg Foundation (www.wkkf.org).
Agriculture in Africa appears set for transformation from unproductive and undeveloped subsistence farming to more commercial farming as investors from Europe, Asia and the Middle East get large tracts of land and launch projects, often to tackle food insecurity in their own countries.
In the interview, Mr Strauss said Agri-Vie plans to invest up to $25 million into five new projects during 2010, including a new $4 million eco-tourism project in Tanzania.
Agri-Vie forecasts fast economic growth in East Africa, which it calls an “investment hotspot”.
He said Agri-Vie this month invested $6.7 million in New Forests Company (www.newforestscompany.com), a UK-based sustainable and socially responsible forestry company with established, rapidly growing plantations and prospects of diversified products for local and regional export markets. It has operations in Uganda as well as Tanzania, Rwanda and Mozambique. East Africa has been a net importer of sawn timber and electrical poles and NFC aims to replace these imports with locally-produced goods. NFC’s overall aim is to “deliver both attractive returns to investors and significant social and environmental benefits”, according to its website.
The company also invested $3.5 million in africaJUICE (www.africajuice.com), run by European and African entrepreneurs and establishing fruit production and processing operations to capture share in European and the Middle Eastern juice markets. The first farm is in Upper Awash in the Oromia region. africaJUICE claims the combination of ideal growing conditions in the area and Ethiopia’s closeness to target markets should help displace European companies’ reliance on importing fruit products from South America.
The company website says: “We plan to establish at least three production locations across Africa by 2014 and become a premier supplier of Fair Trade juice to the European market.”
Strauss said: “Its first operation is in Ethiopia, growing yellow passion fruit, mango and papaya… The first exports will happen from mid-this year.” africaJUICE is making a capital investment of some €12 million to rehabilitate and expand an existing state-owned fruit farm (“Tibila Farm”) to create a high-technology modern tropical fruit plantation and build a new processing facility, operating under Fair Trade principles.
According to africaJUICE’s website: “Our plan is to plant approximately 600 hectares of yellow passion fruit and 600 hectares of other tropical fruits such as mango and papaya over a period of four years. At the same time we will support the development of over 1,200 hectares of outgrowers (contract farmers) to supplement the supply and extend community participation. Our new fruit processing facility will produce pure juices, concentrates and purees which will be transported to market via established export routes.”
David O’Halloran, Director of africaJUICE, told African Capital Markets News: “Having started operations on the ground early in 2009, we are pleased with the progress so far on the new fruit plantings, infrastructure, operating approach and the processing plant and looking forward to juice production from mid-2010 onwards. We have also made substantial progress following our sustainable development philosophy with a number of initiatives underway or already executed and are excited that this new approach to development and investment is progressing well. We are also progressing well on the second and third projects and expect to be considering funding options for those in the coming 12-24 months”.

$400 million fund for small and medium-size businesses

Aureos Capital (www.aureos.com) at the start of November launched its $400m sub-Saharan private equity fund focusing on small- to mid-market companies. Aureos Africa Fund was launched after feasibility and due diligence studies funded by the Commonwealth Secretariat (www.thecommonwealth.org). It will provide long-term capital and support for promising and successful businesses across the continent.

Aureos has already raised $322.8 mln, a quarter of which came from financial institutions, including European pension funds. It is expected to close fundraising at the end of 2009.

The fund is the largest private equity vehicle targeting smaller African businesses. Aureos targets returns over 20% but charges management fees of 2.25% per year (an industry standard is 2%) to cover the many investment professionals deployed to identify suitable opportunities in Africa.

It has spent $106 mln on nine businesses in financial services, technology/media/telecommunications, fast-moving consumer goods, building products, real estate development and agriculture. The companies operate in more than 15 different countries, reflecting the regional character of most of the portfolio companies.

Sev Vettivetpillai, chief executive of Aureos Advisers, said: “It’s 18 months since we started the fund and we raised a very significant $300m plus for Africa in a very challenging market when most investors were pulling out of financial markets. But Africa is the next frontier market that is going to benefit from emerging market flows.”

Commonwealth Deputy Secretary-General Ransford Smith hailed the fund’s launch. He warned that investment in Africa was “critical” if recent development gains were not to be lost amid the current worldwide recession.

The Aureos Africa Fund makes initial investments of up to $10 mln each in small- to mid-size companies which have a strong potential to expand to pan-African businesses within 2 to 3 years via “buy and build” strategies and through carefully executed organic growth.

Private equity $25 mln for East African media and telecoms

Emerging Capital Partners (ECP) announced on 22 September it has committed $25 million to Wananchi Group Holdings (www.wananchi.com/), a leading East African media and telecommunications company specializing in pay television and high-speed Internet services in Kenya and Tanzania.  ECP is an international private equity firm focused on investing across Africa and this is its 10th investment in African telecoms. It still has stakes in Zain Gabon, MTN Cote d’Ivoire and Cellcom (GSM operator in Liberia and Guinea).

The equity investment will help upgrade and expand Wananchi’s existing network infrastructure to provide East Africa’s first triple-play service, consisting of digital pay television, high-speed Internet and Voice-Over-IP services.

ECP’s CEO Tom Gibian says, according to the website (www.ecpinvestments.com) “ECP has been active in the African telecom sector for nearly a decade. Following on the tremendous growth in African mobile penetration over the last 10 years, we view broadband and related services as the next “game changer” in African telecom.  Wananchi’s product offering, network infrastructure and strong management are ideally suited to address the significant unmet demand for media and broadband services in East Africa.” So called “triple play” has been a major driver for growth of telecom companies in developed and emerging markets for the past decade.

Wananchi presently serves the retail and corporate markets in Kenya and Tanzania through its consumer and corporate divisions.  The consumer division operates under the Zuku brand and provides cable television and broadband Internet services to residential customers in Kenya using a combination of hybrid-fiber-coaxial and WiMax technologies. The corporate division operates under the SimbaNET brand and is a leading provider of Internet and virtual private network services to corporations, local governments and non-governmental organizations in Kenya and Tanzania using a combination of metro-fiber, WiMax and VSAT technologies.

Cost and infrastructure used to limit East Africa’s pay television and Internet services and penetration rates of cable television and broadband Internet throughout Kenya and Tanzania are less than 1% each. South Africa’s penetration rates for pay television and broadband Internet are approximately 15% and 4% and Mexico’s 24% and 20%. East Africa’s demand is growing, spurred by strong GDP growth, the emerging middle class, and new undersea fibre cables that make services more accessible and affordable.

Regional venture capital fund manager East Africa Capital Partners (www.eacp.co.ke) formed Wananchi Group in 2007 through acquiring several smaller companies.  EACP chairman, Mark Schneider, is a leading cable entrepreneur and co-founder of United Global Communications which was acquired by Liberty Media in 2004 and grew to become one of the largest cable companies in the world with operations in over 20 countries in Europe, Latin America and Asia.

Bryce Fort, ECP managing director, says the firm “is looking forward to working with EACP and Wananchi, two of East Africa’s world-class institutions.”

Top African venture capital meeting (AVCA) coming to Cairo

Private equity and venture capital opportunities in Africa, billed “the world’s fastest-growing continent”, are on the agenda of the African Venture Capital Association (AVCA) 8th Annual Conference (http://www.avcaegypt2009.com). The top industry meeting will be held in Cairo Marriott Hotel on 15th-17th November, 2009 with the theme “Africa: The Growth Continent for Private Equity. Investment Opportunities 2010 and Beyond”.

 AVCA (http://www.avcanet.com) is a non-profit organization founded to develop private equity and venture capital in Africa. Its Chairman, Rotimi Oyekanmi, says the theme highlights “the significant investment opportunities that abound across Africa. Africa, we believe, is the final frontier where you can still achieve above-average returns.”

 Topics addressed by world experts include:

  • After the Global Financial Crisis – Opportunities for PE and the Economies across Africa
  • Comparisons with other Emerging Markets – Does Africa have the Edge?
  • Where are the Opportunities: Which sectors will continue to provide significant returns? What new trends are developing? Do single country investments still make sense vs regional and pan-African investments.
  • Investing and Accessing Capital in the MENA Region
  • The Fortune at the Bottom of the Pyramid:  Will Microfinance change the Banking Landscape?
  • Is Africa ready for Specialized Funds?
  • Finding the Exit:  Delivering Returns in Emerging Markets (case studies from across the continent).

 Industries such as financial services, agribusiness and infrastructure and power will be looked at in detail, highlighting the investment opportunities and potential for private equity investors.

 According to Ahmed Heikal, founder and chairman of conference co-host Citadel Capital (http://www.citadelcapital.com/): “There has never been a more interesting time for confident investors to venture into our continent.. There are good reasons for the IMF to project Africa will grow faster than any other continent in the coming year.” He says recent IMF statistics show Africa growing at 4.1% in 2010, compared to 0.6% for advanced economies and projected a world average of 2.5% growth.

 According to Heikal: “From unique transportation and logistics plays to agrifoods and microfinance, Africa is home to outstanding investment opportunities that build wealth for both investors and the communities in which we do business.

 Speakers include fund managers and industry leaders. The conference brings Africa together with markets including the Middle East, Europe and the USA and attendees are likely to include international investors, key African government officials and Africa-focused PE funds, Limited Partners and General Partners. Delegates from 19 African countries and 9 non-African countries attended the 2008 AVCA’s conference in Botswana.

 The conference is hosted by:

AVCA: A not-for-profit organization founded to promote the development of private equity and venture capital as an alternative asset class in Africa. The Association has 120 full and associate members from 18 African countries and 9 countries worldwide. Its members have some US$ 5 billion of institutional funds under management. AVCA is committed to promoting high ethical standards of business conduct and professional competence in the industry (http://www.avcanet.com).

FMO: The Netherlands Development Finance Company (FMO) is the international development bank of the Netherlands. FMO invests risk capital in companies and financial institutions in developing countries with the mission to create flourishing enterprises which can serve as engines of sustainable growth in their countries. The investment portfolio is €4.2 billion, making FMO one of the largest bilateral private sector development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not yet prepared to take. (http://www.fmo.nl).

Citadel Capital: a leading private equity firm in the Middle East and North Africa, focusing on building regional platform investments in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. It has 19 OSFs, controlling companies with investments worth more than US$ 8.3 billion in 14 industries, including mining, cement, transportation, food and energy in 12 countries from Algeria to Ethiopia (http://www.citadelcapital.com/).

IFC’s notable transactions in year to June 2009

The International Finance Corporation (IFC), part of the World Bank group, committed investments in the following African countries last year: Angola, Benin, Burkina Faso, Burundi, Cameroon, Chad, Cote d’Ivoire, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Sao Tome and Principe, South Africa, Tanzania, Togo, Uganda, and Zambia.

• IFC invested $18 million to help Green Resources plant 8,000 hectares of new forest in Tanzania. Green Resources will generate carbon credits from its operations, which it will sell directly to buyers from developed countries.
• IFC created a new private equity fund for Africa’s health sector, with the African Development Bank, the Bill & Melinda Gates Foundation, and the German development finance institution DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH. The fund reached a first closing of $57 mln (target $100-120 mln) to invest in small- and medium-sized companies, such as health clinics and diagnostic centers, to help low-income Africans gain access to affordable, high-quality health services.
• IFC provided a financing package of over $200 million to Ecobank Transnational Inc., a pan-African bank with a network of over 500 branches in 27 countries. The financing will support the bank’s expansion, promote lending to micro and smaller, and facilitate trade flows to the region
• IFC provided a $30 million guarantee facility to Stanbic Bank Ghana to help it increase financing to companies that purchase cocoa from small farmers in Ghana.
• IFC will provide a loan of $100 million to Kosmos Energy, one of the key partners developing Ghana’s offshore oil and gas Jubilee field, located in deep water some 60 kilometers off the coast of Ghana. The project will help diversify Ghana’s economy, meet domestic power demand, and generate revenue to support the country’s economic growth and development. IFC’s loan is part of a $750 million debt package for U.S.-based Kosmos that IFC helped mobilize, primarily from commercial banks. IFC also signed a $115 million loan agreement with British Tullow Oil, another key Jubilee partner, bringing IFC’s support for the project to $215 million. Kosmos and Tullow are independent oil and gas exploration and production companies.
• In Uganda, IFC signed its first risk sharing facility involving small and medium enterprises in the telecommunications sector. This project enables distributors of Zain products and services access to medium term financing through Stanbic Bank Uganda. IFC expects to see more projects of this nature in other parts of Africa.
• IFC provided $100 million in financing as part of a $400 million package to support Standard Bank’s trade-related lending in Africa. The transaction was part of IFC’s Global Trade Liquidity Program, which is expected to support up to $50 billion in trade in emerging markets and have a significant impact in Africa, where supporting continued access to finance is one of IFC’s priorities.