Tthe African Private Equity and Venture Capital Association’s (AVCA) 15th Annual conference has ended after four days of high profile keynote speakers, interviews, panel discussions, roundtables, research, and professional development programmes in Morocco.
The global gathering convened over 600 delegates, including over 150 Limited Partners (LPs) – collectively managing in excess of $US1.5tn in assets.
The second day of the conference – well known as “AVCA’s LP Day”, examined a wide range of key topics driving the industry in 2018 and beyond, including Moroccan investment finance, regional expansion, impact investing, exit strategies, environmental, social and governance (ESG), Africa’s burgeoning venture capital ecosystem, and the evolving role of development finance institutions on the continent.
LPs see great opportunities and seek to maintain or increase their allocation to PE in Africa.
They see the continent as more attractive for PE investments than other emerging markets over the next ten years.
As the appetite for yields among LPs continues to rise, “Africa has emerging consumer markets and that is a reason to invest in Africa”.
There are various forces driving investments beyond the African consumer story, “you have to understand demographics and politics” and “try to think about what will be trending in ten years. That’s why we’re in Africa.” Antony Barker, former Director of Pensions and Chief Investment Officer, Santander UK stated.
Highlighting the rising activity of family offices across the region, Christophe Karvelis, Co-Founder and Chief Executive Officer, Capzanine noted that “family offices are more risk takers than institutional investors and they are increasingly seeking higher returns across the continent”. Dan Kranzler, Senior Partner, Capria Ventures believes that “opportunities for venture capital in Africa are clear. There are opportunities for technology, opportunities for growth, opportunities for disruptive invasion”.
Infrastructure was a central focus of the conference, Ronald Mincy, Chief Executive Officer and Managing Partner, LionWorks Capital observed that infrastructure growth in Africa outperforms other emerging markets. Stressing the energy shortfall in the continent and the vast opportunities for investment, Wale Shonibare, Director, Energy Financial Solutions, African Development Bank, noted during a closed-door roundtable on the Facility for Energy Inclusion (FEI) programme that Africans “need to be able to trade energy across countries and prioritise on building connections and power pools”.
He added that “the problem is that most African utilities are essentially bankrupt, so the private sector has a hard time selling power to them”.
During the panel session where ESG and impact investing were discussed, Mamadou Biteye, Managing Director, The Rockefeller Foundation asserted that “responsible investing is key to building a sustainable future for Africa and creating long-term job opportunities”.
AVCA’s recently released report An Untold Story: The Evolution of Responsible Investing in Africa defines responsible investing and explores how fund managers in Africa typically invest for development outcomes that encompass financial returns and economic impact.
Closing the event, Anuoluwapo Balogun, Partner, Olaniwun Ajayi, summarised that: “the consensus from the last two days is that Africa is open for business and that the industry has successfully navigated the challenging political and economic environments in key African markets in 2017.”
The conference was preceded by the 4th Annual GP-LP Summit and played host to professional development programmes on legal agreements in African private equity and two masterclasses for institutional investors.
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