At Abidjan in Côte d’Ivoire where over 600 private equity leaders were conveyed, representing over $15 billion in African funds under management, hopes have been raised that Private Equity(PE) investment could be on the rise again after its fall last year due to economic downturn faced by many Africa countries.
Despite Africa’s great potential for investment, the continent last year greatly lagged behind in private equity deals compare to other continents
According to AVCA’s 2016 report, only 928 private equity deals, with a value of $22.7 billion, were completed in the period from 2010 until the end of the first half of 2016, compared to European private equity activity of $349 billion deployed across 1,989 transactions in just 2016 3rd quota alone and Asia Deal value spiked to $125 billion in 2016 alone.
To address this huge gap, the body AVCA Convenes PE Players to discuss the key trends shaping the investment landscape in 2017. The event has already witnessed positives from the attendees, following Monday’s successful GP-LP Summit, during which the key topics of co-investments and valuation were discussed.
According to Hurley Doddy, Managing Director at Emerging Capital Partners the magnitude of the conference will bring about billions of dollars of investment through meetings and discussions.
Francophone countries who have over the years remain untapped despite their enormous potentials, are charting a new course
“Africa is a powerful region coming into its own and presenting numerous opportunities for investment Vice-President of Côte d’Ivoire, Daniel Kablan Duncan, averred in his opening keynote speech, at the summit.
Heralding the economic progress of the country, he said “Africa remains the investment hub in the world at present and will continue growing due to the structural and fiscal reforms taking place across the continent”.
He further stressed that Côte d’Ivoire is set to be in the top ten global growth countries.
Also speaking, the Budget Minister for Côte d’Ivoire Abdourahmane Cissé, discussing the tremendous growth that has taken place over the past few years in the continent describe Abidjan becoming a key hub for foreign investment.
Dr. Frannie Léautier, Senior Vice-President at the African Development Bank (AfDB), in a keynote interview with Runa Alam, CEO at Development Partners International, stressed that ”integration in Africa is being driven by people, finance, and infrastructure.” She added that even with the geopolitical shocks, “if you are well structured, investors can make a good return.”
Also discussion panel was organized for the two days event with panelist constituting of Akintoye Akindele, Co-Founder and Partner at Synergy Capital Managers and was join by other influential GPs to discuss the need to adapt and be resilient.
From an LP point of view, Richard Rincon, from the University of Texas Investment Management Company (UTIMCO), will join other local LPs, including Simon Nyakundi, Chief Executive Officer at Kenya Railway Staff Retirement Scheme, to discuss investment strategies for all seasons. Meanwhile, Jerry Parkes, Chief Executive Officer at Injaro Investments, will provide insight into ESG practices in African private equity, and how Africa leads the way in sustainable investing.
Papa Madiaw Ndiaye, Founding Partner and Chief Executive Officer at AFIG Funds, and Vice Chair of the AVCA Board, noted: “It is extremely exciting to look around the room and see so many of the critical players in the African private equity and investment landscape gathered under the same roof. We have already heard from several key GPs and LPs, as well as our Ivorian hosts. AVCA is immensely proud to facilitate these important discussions and play a key role in championing private investment in Africa.”
Michelle Kathryn Essomé, Chief Executive Officer at AVCA, added: “The conference marks another important milestone as Africa’s PE potential comes to fruition. AVCA continues to succeed in connecting the most important stakeholders from across the continent and beyond.
While Africa has a large number of private companies, many of which require growth capital funding, the continent is significantly underpenetrated in terms of bank credit.
The limited availability of capital from banks and public markets in most African countries means that private companies find it challenging to obtain the necessary capital to grow.
Small and Meduim Enterprise (SMEs) in Africa have grown over the last few years, and will keep growing although access to capital has become a near impossibility.
With this promised investment by investors SMEs drive could be the bigger beneficiaries and this should help to drive the growth of PE investments in Africa.
With the promise investment growth PE investors can act as key enablers, bridging the funding gap that is crucial for a growing private sector and broad-based economic growth across the continent.