Agf digital magazine october 2015

AFRICA GLOBAL FUNDS O C T O B E R 2 015 / V O L . 1 / I S S U E 9 www.africaglobalfunds.com | T africaglobfunds

Q&A:

ACTIS AGF’s Managing Editor Anna Lyudvig speaks with David Cooke, Director at Actis, about the firm’s investment strategy in Africa, opportunities and challenges

A

ctis, an emerging markets investor, focuses on investments in Africa, Asia and Latin America. The firm has a strong track record of backing high-quality businesses in Africa with over

$3bn invested in 23 countries across the continent to date.

Read on pp. 14-15

ANALYSIS:

MARKET:

South Africa formally encourages investors to integrate

The country is rising to become the natural

ESG issues into their investment decisions. Have SA hedge

gateway for investing in Africa, says Shaffick

funds been taking this seriously?

Hamuth

ESG: HEDGE FUNDS

D

evelopments in South Africa, such as changes to Regulation 28 of the South African Pension Fund Act and the launch of the Code for Responsible Investing in South Africa (CRISA)

MAURITIUS

W

ith unprecedented potential of growth, a rising middle-class and rapid urbanisation, today Africa offers to the global investor com-

a few years ago, have put a growing emphasis on ESG (Environmental,

munity unmatched investment opportunities in various

Social and Governance) factors.

sectors; this is where Mauritius comes into the picture.

Read on pp. 12-13

Read on p. 16-17

Magazine outline: News

Traditional and alternative asset classes, fundraising and fund launches, industry news and investors allocations, as well as people moves (pages 4-11).

Analysis

Market insights, executive interviews, round-table discussions and in-depth research.

Opinion & Commentary Industry experts express their take on the markets and events happening in Africa.

The AGF magazine is praised for "finding the news behind the news." Extensive participation from the industry allows us to ensure that we are always addressing the issues that really matter.

Data

Our database of private equity funds performance, public funds performance, economic statistics, and market performance (S&P exclusive data).

At your fingertips:

www.africaglobalfunds.com

EDITORIAL

AFRICA GLOBAL FUNDS

OCTOBER 2015

Dear Reader, In this month’s issue of Africa Global Funds we continue to look at ESG (environmental, social and

Web: www.africaglobalfunds.com Twitter: AfricaGlobFunds LinkedIn: Africa Global Funds

Editorial: Anna Lyudvig +1 (718) 787 6105 a.lyudvig@africaglobalfunds.com

Commercial: Roman Onosovski +1 (561) 866 0737 r.onosovski@africaglobalfunds.com

Support/Technical: support@africaglobalfunds.com

Contributors: Mike Brown Shaffick Hamuth Kasief Isaacs Mark van Wyk Thomas Venon

governance) principals. South Africa formally encourages investors to integrate into their investment decisions sustainability issues. We explore whether South African hedge funds have been taking ESG issues seriously and learn about the benefits of sustainable investing.

Meanwhile, South Africa has a deep pipeline of available infrastructure assets, say Mark van Wyk and Kasief Isaacs of Mergence Investment Managers, adding that there is a case to be made for infrastructure investing right now.

In addition, Mike Brown, Managing Director of etfSA.co.za, analyses the passive investment landscape in South Africa, saying that there has been some measurable swing to passive investment products in recent years.

As the African continent continues to attract global interest, Mauritius is rising to become the natural gateway for investing in Africa. In this month’s market feature, Shaffick Hamuth, Economist and former Senior Investment Advisor of the Board of Investment, Mauritius, outlines opportunities for private equity as well as for capital markets investors.

Finally, this month we speak with two private equity firms – a pan-emerging markets private equity investor Actis and long-term responsible investor Amethis Finance. We find out why Amethis stands out from the African private equity crowd and learn about Actis’s experience of investing in Africa.

Best regards, Anna Lyudvig Managing Editor

Published by Africa Global Funds LLC © 2015 All Rights Reserved No parts of this publicataion may be reproduced without written permission www.africaglobalfunds.com | 3

NEWS

OCTOBER 2015

GROFIN LAUNCHES SGB FUND FOR AFRICA

G

roFin, an SME development financier, has launched the GroFin Small and Growing Businesses (SGB) Fund that aims to catalyze sustainable job creation through

supporting small and growing businesses in Africa.

Guido Boysen, CIO at GroFin, said: “In most African countries the small and growing businesses (SGB) sector is a major contributor to inclusive economic growth and job creation. However, entrepreneurs in Africa are grossly under-served, with 50-90% of SGBs

businesses.

“The Fund’s tiered capital structure enables a range of social and commercial investors to join the Fund post its launch,” he said.

The Fund focuses on SGBs that are grossly under-served by other funds or financiers.

“Based on the viability of an entrepre-

failing within the first five years.”

neur’s business and growth plans, and not

“As a result, many African countries are missing out on a major

the availability of collateral, entrepreneurs

engine for sustainable job creation that can help tackle poverty

will be able to access loans ranging from

and improve livelihoods. Start-ups and small businesses often

$100k to $1.5m for a period between two and

struggle to access the capital they need to expand. Their limited

six years,” added Boysen.

track record, fluctuating cash flows, low levels of collateral and capacity limitations makes it difficult to meet the lending criteria of most banks,” he told Africa Global Funds.

Guido Boysen CIO, GroFin

The aim is to make 80 – 100 investments per year at an average deal size of $350k.

The GroFin SGB Fund’s key focus is investing in high-impact sec-

“The GroFin SGB Fund seeks to address these market barriers by providing African entrepreneurs with an integrated solution of patient growth finance, tailored business support, and access to markets,” he added.

tors such as healthcare, education, agro-processing and energy in addition to other sectors that support inclusive growth.

The Fund is a high-impact African investment opportunity that creates both positive impact and a financial return from an un-

The Fund was created by GroFin in partnership with Shell Foundation, the German development bank KfW, the Norwegian Investment Fund for Developing Countries, Norfund, and the Dutch government through the Dutch Good Growth Fund (DGGF).

The Fund, which has initial commitments of $100m, will target SGBs in Ghana, Nigeria, Uganda, Zambia, Kenya, South Africa, Rwanda, Tanzania, and Egypt.

der-served SME market segment.

Over 10 years the growing SGB portfolio will sustain 47,000 employees as part of its impact.

Boysen said that the Fund has Business Support Facilities where business owners can obtain advice from GroFin’s local and international SGB experts.

“Through pre-investment business support, GroFin’s team of

Over the next two years, with grant funding from the German gov-

locally-based investment managers will help entrepreneurs

ernment through KfW, GroFin plans to expand the Fund’s support

develop viable business plans, identify and mitigate potential risk

to SGBs to three more African countries.

and execute effective growth strategies. For those who qualify for

“A number of countries are currently under review, and subject to proper due diligence. No decisions have been made yet,” said Boysen. one of the largest funds specifically targeting small and growing

MERIDIAM INFRASTRUCTURE AFRICA FUND GETS €30M FROM EIB

duration of the investment,” he said.

Established in South Africa in 2004, GroFin has grown from the

The Fund is expected to grow to $150m in two years, making it

INVESTORS

investment, the business support services continue for the entire

RAPS group of companies that have invested in small and growing businesses since 1999.

sential for economic activity and improving

ture, is expected to make 8-10 investments,

lives.”

predominantly in greenfield projects, but

“The Meridiam Infrastructure Africa Fund will help projects being implemented for the first time by sharing experience from

may also invest in selected secondary projects at the operational stage.

The fund will finance infrastructure pro-

similar schemes elsewhere, both in Africa

jects in the sectors of energy and power,

The European Investment Bank (EIB), Eu-

and Europe. The European Investment Bank

transportation, environmental infrastruc-

rope’s long-term financing institution, has

is committed to supporting infrastructure

ture, social infrastructure and telecommuni-

announced a €30m ($33.51m) investment in

investment that unlocks business oppor-

cations infrastructure in African countries.

the Meridiam Infrastructure Africa Fund, a

tunities, reduces costs and contributes

pan-African fund targeting essential infra-

to achieving the Millennium Development

significant minority or majority stakes of the

structure projects.

Goals and this new initiative firmly supports

junior/equity capital in each project with

these goals,” he said.

strong corporate governance rights to be

Pim van Ballekom, European Investment Bank Vice Presiden, said: “Investment

The fund, which is managed by Meridiam, a

across Africa to improve energy, education,

global investor and asset manager special-

water and transport infrastructure is es-

izing in public and community infrastruc-

4 | www.africaglobalfunds.com

The fund will generally seek to acquire

able to monitor and manage project risks.

The Meridiam Infrastructure Africa Fund is currently finalizing investment in three pro-

NEWS

OCTOBER 2015

jects, a solar photovoltaic project in Sene-

availability of its service to customers at

even better equipped to advise inbound

gal, a university campus in Côte d’Ivoire and

all times in this rapidly evolving market,”

investors and intra-Africa investors."

airports renovation in Madagascar.

he said.

Thierry Déau, Meridiam’s Founder and CEO,

Chims Africa is the largest agent operator

Frontier Advisory is a research, strategy and advisory firm that assists clients to

said this fund is an ideal opportunity to

within the MTN mobile money network, the

improve their competitiveness in frontier

unleash much needed investment in African

Ugandan market leader in Mobile Money,

and emerging markets.

infrastructure.

with a strong position in rural areas with

“We believe we can contribute to support efforts across the continent to build capac-

over 130 outlets across the country.

Norman Batuma, Chims CEO, said that the

Following the acquisition, the company becomes known as Frontier Advisory Deloitte.

Frontier Advisory's CEO Martyn Davies

ity in infrastructure delivery to accompany

company had recorded rapid growth since

and foster African growth. In this way we

inception and was now looking to expand

will collectively harness the enormous po-

its financial services business by increasing

forward to being a part of Deloitte’s growth

tential created by Africa's young population,

its national foot print and introducing new

in Africa and connecting our continent to

burgeoning middle classes and increasingly

services.

the global economy. It is noteworthy that

urbanized population,” he said.

Founded in 2005, Meridiam is an inde-

moves across together with 12 of his staff.

“I am delighted to join Deloitte and look

Chims currently has over 190 Employees.

Deloitte has itself been operating in Africa

Through its services and outlets, Chims

for over 100 years and so I believe the team

pendent investment firm specialized in the

has indirectly created job opportunities

will be an extremely powerful voice and

development, financing, and management

for many more and plans are underway for

force in the frontier and emerging markets

of long-term public infrastructure projects.

further rural expansion.

advisory space,” said Davies.

With offices in Paris, New York, Toronto

Chims continues to grow its customer base

Bam welcomed Davies to the team and

and Istanbul, Meridiam currently manages

daily and currently stands at over 7 million

said this move would “further enhance our

€3.2bn ($3.5bn) of assets.

users.

offering and ability to deliver innovative

Meridiam is one of the first investors

Ascent’s direct investment in expansion of

and asset managers to receive ISO 9001

agent network, will directly strengthen the

certification for its responsible investment

customer reach in rural areas.

process and is a founding member of the

“We continue to explore avenues through

ideas and add meaningful insights to our client’s plans to grow in Africa."

"We want to ensure businesses can thrive in these frontier markets and believe the

Long Term Infrastructure Investors Associa-

which we can add more value to our cus-

synergies between Deloitte and Frontier

tion.Group, said: “We are currently reviewing

tomers. We target increasing our Mobile

Advisory will further enhance our service

projects in Mauritius, Ghana, Mozambique,

Money Branches by 700 outlets and at

offering. Our firm has realised impressive

Nigeria, Rwanda and Zambia, all of which

the same time be the leading provider of

growth and we attribute this, in part, to our

present tremendous opportunities for

Mobile Money and related financial services

own expansion on the continent,” he said.

our investors and the local communities

to deepen financial inclusion in Uganda,”

in which they are based. Our investment

Batuma added.

pipeline includes more than a dozen projects and we expect to commit funds to at least two of these projects prior to the end of 2015.”

DEALS

ASCENT MAKES SECOND DEAL WITH INVESTMENT IN UGANDA’S CHIMS Ascent Rift Valley Fund (ARVF), an SME

This is the second investment by ARVF this year.

In February 2015, the Fund invested $2.5m

ticularly excited about the prospects this partnership presents for making a meaningful impact on our client’s, governments

into Medpharm Holdings Africa, a medical

and communities on our continent,” he

diagnostic laboratory with operations in

added.

Ethiopia and expansion ambitions in the greater East Africa region.

ARVF targets scalable fast growing enterprises in Kenya, Uganda and Ethiopia.

The fund invests between $2m and $10m per investee company.

Frontier Advisory possesses extensive networks, market understanding and operational experience in all emerging regions that have enabled it to strategically position clients businesses in these economies.

“As Frontier Advisory Deloitte we will be able to develop increasingly strategic and

focused private equity fund investor, has invested in Chims Africa, a mobile money

“Deloitte is invested in the future of the African continent and as such, we are par-

ASSET SERVICING

bespoke solutions for clients, with the abili-

DELOITTE ACQUIRES FRONTIER ADVISORY

ty to harness Deloitte’s deep global network

the last few years become one of the lead-

Deloitte has acquired Frontier Advisory, as

and Industries Team, said strategic po-

ing nations in mobile money in the world.

the company seeks to expand its opera-

sitioning focusing on the growing trend

tions in the African continent and in other

of intra-emerging market capital flows,

emerging markets.

training to leading corporates, multina-

operator in Uganda.

Richard Mugera, Ascent Capital Uganda Country Director, said that Uganda has over

“We are very pleased to team up with Chims to help cement the company's leading position in the Ugandan market.

This investment will allow Chims to ensure

Lwazi Bam, Deloitte Africa CEO, said: "With the acquisition of Frontier Advisory, we are

providing a new edge,” said Davies.

Kevin Black, Head of Deloitte’s Clients

tionals and government organisations and events would be some of the main areas

www.africaglobalfunds.com | 5

NEWS

that would be driven following the buy-out of Frontier.

OCTOBER 2015

The fund, which is headquartered in Nai-

company owned by Norfund, the Norwegian

robi, held its first close of $100m in March

investment fund for developing countries

2014 and since that time has been investing

and CDC Group, the UK government’s devel-

interest, particularly from more mature

capital in grid-connected development

opment finance institution.

lower growth economies like the UK and

stage renewable energy projects, including

continental Europe, not to mention the new

small hydro, wind, geothermal, solar and

stake (30%) in Globeleq Africa for a final

world that is the BRICS around opportuni-

biomass projects.

cash consideration of $227m.

“There is an extensive amount of global

ties in Africa and how we can partner with them on this journey,” said Black.

FUNDRAISING

Alastair Vere Nicoll, Berkeley Energy’s

Norfund acquired a significant minority

CDC, which already held a majority indirect

Partner and Co-Founder, said: “We are very

investment in Globeleq Africa via the Actis

pleased to have reached our target fund

Infrastructure 2 fund, transferred its in-

raising and look forward to continuing our

terest into the new company owned jointly

work focusing on the technical delivery of

with Norfund.

BERKLEY HITS FINAL CLOSE FOR AFRICAN ENERGY FUND

our projects with our project partners from The European Investment Bank (EIB) and

control of Globeleq, having obtained the

the Global Energy Efficiency and Renewable

necessary government and lender con-

The African Renewable Energy Fund (AREF),

Energy Fund (GEEREF), have contributed to

sents,” a spokesperson from CDC told Africa

a dedicated renewable energy fund focused

the final close among other investors.

Global Funds.

on sub-Saharan Africa, has successfully

concept to generating reality."

Pim van Ballekom, European Investment

“CDC and Norfund have now completed the process to secure direct ownership and

“Under CDC and Norfund ownership, Glo-

reached its final close at its hard cap, with

Bank Vice-President, said: “As one of the

beleq aims to add at least 5,000 megawatts

$200m of committed capital to support

world’s largest investors in renewable

of generating capacity to the grid in Africa

small- to medium-scale projects.

energy, the European Investment Bank is

over the next 10 years, which will enable the

The African Development Bank (AfDB) and

committed to ensuring that new projects

creation of over 1.5 million new formal and

its Sustainable Energy Fund for Africa (SEFA)

can be implemented around the world."

informal jobs across Africa,” he added.

are the fund’s lead sponsors, with equity in-

"This engagement is demonstrated

Globeleq Africa manages electricity-gen-

vestment of $25m and $25.5m respectively,

through our support for the Global Energy

erating assets across Cameroon, Tanzania,

alongside $4.5m from the Global Environ-

Efficiency and Renewable Energy Fund,

Cote d’Ivoire, Kenya and South Africa, span-

ment Facility (GEF).

GEEREF. Our combined backing for the

ning gas, heavy fuel oil (HFO) wind and solar

African Renewable Energy Fund will provide

technologies.

SEFA has additionally committed a $10m Project Support Facility (PSF) to be

both financial support and share technical

deployed at an early stage to structure

experience essential for smaller renewable

Globeleq, Actis has invested over $350m in

bankable deals.

schemes being implemented for the first

Globeleq Africa.

The total AfDB-mobilized package of $65m has provided a solid foundation for attract-

time,” he said.

The final investor group also includes West

During the past seven years, through

As a result, Globeleq Africa has more than doubled its installed capacity to 1,234MW

ing capital from commercial and institu-

African Development Bank (BOAD), ECOW-

and the business is now the leading power

tional investors to the renewable energy

AS Bank for Investment and Development

generation platform on the continent.

segment in Africa.

(EBID), the Netherland Development Finance

Alex Rugamba, Director of AfDB’s Energy,

Key milestones during Actis’s invest-

Company (FMO), Calvert Investments, the

ment in Globeleq Africa have included the

Environment and Climate Change Depart-

UK’s Development Finance Institution CDC

completion, on time and below budget, of

ment, said: “AfDB is pleased to see that

Group, the Belgian Investment Company

the Azito power plant conversion in Cote

AREF is now fully capitalised to deliver

for Developing Countries (BIO), OeEB - the

d’Ivoire from open to combined cycle tech-

on its pan-African mandate. We are also

Development Bank of Austria, Wallace

nology.

equally excited that SEFA and Global Envi-

Global Fund, Sonen Capital, Berkeley Ener-

ronment Facility participation have been

gy, African Biofuel and Renewable Energy

installed capacity by almost 50% (to 432MW)

catalytic in mobilizing significant amounts

Company (ABREC) and a number of other

eliminating the need for additional gas, this

of commercial capital into AREF over a short

private investors.

has significantly contributed to the stability

time-frame; this is key for accelerating deployment of modern, clean and affordable energy in the continent.”

of Côte d’Ivoire’s power sector.

EXITS

focused on developing and investing in

ACTIS EXITS GLOBELEQ AFRICA TO CDC AND NORFUND

renewable energy projects in emerging

Actis has exited its investment in a power

markets.

generation platform Globeleq Africa to a

AREF is the first dedicated sub-Saharan African renewable energy fund and is managed by Berkeley Energy, a fund manager

6 | www.africaglobalfunds.com

The conversion increased the plant’s

Globeleq Africa also successfully backed the construction of three renewable energy generation assets with a combined capacity of 238MW under the first round of the ambitious South African Renewable Energy Procurement Program.

The next growth milestone will be the expansion of the Kribi generation plant in

NEWS

OCTOBER 2015

Cameroon, currently in advanced develop-

raises ever for a telecommunications oper-

dex-Emerging Markets (GBI-EM) by the end

ment and expected to reach financial close

ator in Africa and brings the total funding

of October 2015, after restrictions on FX

later in the year.

committed to Smile since its founding in

transactions prompted investor concerns

2007 to approximately $600m.

over a liquidity shortage.

Torbjorn Caesar, Actis Senior Partner, said: “We are proud of what we have achieved

The new round of funding will be used

The country has a 1.5% weighting in the

over the past decade in terms of creating a

to expand Smile's existing 4G LTE mobile

GBI-EM index, which is tracked by $183.8bn

much needed energy infrastructure in Afri-

broadband networks and services, such

of funds globally, according to the bank.

ca. We are confident that CDC and Norfund,

that by the end of 2015, Smile will offer clear

working as direct investors with Globeleq

voice services and have national coverage

holding company in the US, added Nigeria

Africa’s management team, can successfully

comparable to the largest 3G network in

to its index in 2012 and on January 16, 2015

continue that work.”

each of its current countries of operation.

placed the country on a negative index

Goldman Sachs acted as exclusive advisor to Actis.

Smile will also launch its broadband network in Democratic Republic of Congo early in 2016.

INVESTORS

Under the terms, the funding will be used

PIC, AFREXIMBANK AND OTHERS INVEST $365M IN TELECOM GROUP SMILE

to accelerate national network roll-out,

JPMorgan, the largest financial services

watch.

Salami said that index inclusion back in 2012 was generally viewed as confirmation of Nigeria’s emergence as an acceptable destination for international financial flows.

including equipment and services provided

He added that the move was not unex-

by Alcatel Lucent and Ericsson, a full MPLS

pected, however the timing is earlier than

(Multiprotocol Label Switching) network, a

anticipated since the previous expectation

The Public Investment Corporation (PIC) and

London Point of Presence and expanded

would be completed around December.

African Export-Import Bank with participa-

international backhaul services, and to

tion from other investors, have provided

fund operational expenditure and working

on the domestic economy is likely to be

$365m of debt and equity financing to Smile

capital.

minimal, since a lot of foreigners had al-

Telecoms Holdings (Smile), a pan-African telecommunications group.

The funding is comprised of $50m of equi-

Smile's objective is to become the broadband provider of choice for super-fast data and clear voice in each of its markets and to

“The immediate impact of Index exclusion

ready exited the local fixed income market,” he said.

Estimates suggest that foreign holdings of

ty, raised from the PIC on behalf of Govern-

provide over 300 million potential custom-

Nigerian bills and bonds had declined from

ment Employees Pension Fund, and a $315m

ers in its four countries of operation with

about $8bn to around $2bn.

multi-tranche, multi-jurisdictional debt fa-

a fast, reliable and high quality platform

cility led by African Export-Import Bank with

to accelerate development and wealth

yields have been rising and currently 180-d

participation from the Development Bank

creation.

yield stands at ca.15.5% (vs 13% in Jan 15). If

“Given the selling pressure, domestic

of Southern Africa, Diamond Bank, Ecobank

Irene Charnley, CEO of Smile, said: "Now

Nigeria, the PIC, the Industrial Development

that we are fully funded to deliver national

domestic banks and pension funds have the

Corporation of South Africa and Standard

coverage of unrivaled super-fast internet

capacity to absorb the offer and net impact

Chartered Bank.

access and clear voice services, our priority

on yields should not be more than an addi-

is to ensure that our customers experience

tional 0.5% to 1%,” Salami said.

Founded in 2007 and incorporated in

the remaining $2bn were to be withdrawn,

Mauritius, Smile owns and operates mobile

and benefit from the power of high speed

wireless 4G LTE broadband networks in

mobile broadband compared to the nar-

flagged, those foreign investors still left

the 800MHz band in Nigeria, Tanzania and

row-band services available to date, includ-

in Nigeria are unlikely to have suddenly

Uganda.

ing how to effectively manage the superior

become more pessimistic about the outlook

experience in terms of data consumption."

for the markets or the economy. Nigeria’s

Smile's shareholders now comprise Al Nahla Group, a Saudi Arabia-based com-

“Given that this event was reasonably well

fundamental problems are well known

pany, which is the majority shareholder;

MARKETS AND INDUSTRY NEWS

–slowing growth, falling oil price, falling

Renven Investment Holdings, a pan-Afri-

Government revenues, rising C/A deficit,

investors, including the Obijackson Group,

NIGERIA EXPELLED FROM JPMORGAN’S BOND INDEX

are the majority; Verene, representing Smile

The expulsion of Nigeria from JPMorgan’s

not aware of yesterday,” he added.

senior management and social entrepre-

Government Bond Index is an embarrass-

neurs from South Africa; Telecom Invest-

ment to the economic reputation of the

ation of CBN’s policy of administrative con-

ments, a Saudi Arabian-based investment

Nigerian Government, according to Ayo Sa-

trols to limit demand for foreign exchange.

company; Capitalworks, an active alterna-

lami, CIO of Africa Liquid Strategies at Duet

can investment vehicle, in which Nigerian

tive management company, specializing in investment in the African mid-market; the PIC; and Smile employees.

The funding is one of the largest capital

Asset Management.

JPMorgan Chase and Co has announced

pressure on the FX rate etc. Nothing has changed today, that most investors were In terms of policy, Salami expects continu-

“Inexplicably the CBN has chosen to sacrifice economic growth on the altar of currency stability. The 2Q15 numbers showed

that the largest African economy will be

a deceleration in real GDP growth to 2.35%

removed from its Government Bond In-

from 6.54% a year ago,” he said.

www.africaglobalfunds.com | 7

NEWS

OCTOBER 2015

MICROFINANCE INVESTMENTS: AFRICA RECORDS HIGHEST GROWTH SINCE 2010

W

hile volume remains relatively low in Africa with almost

“We are also seeing that many microfinance institutions (MFIs)

11% of the microfinance portfolio of all microfinance

have grown and are evolving to Tier-2 and Tier-1 size, which is also

investment vehicles (MIVs), investment in Africa has

opening up more investment opportunities. Additionally, up until

grown by 211% over the past five years, according to the latest

now we haven’t noticed any major defaults of institutions in this

survey by Symbiotics.

market as we have in the other regions. This tends to reassure

The 9th Annual Microfinance Investment Vehicles survey revealed that Africa is the fastest growing continent followed by Asia (+92% since 2010).

new investors of the quality of the African MFIs despite their often lower returns compared to some other markets,” he said.

In terms of MIV country allocation, Kenya and Nigeria are the

Africa has also recorded the fastest growth measured on an annual basis (21%).

countries in which MIVs invested the most last year, whereas Zimbabwe is in the top-10 list of preferred investment destinations

The Survey, which aims to provide comprehensive market trends and peer group analysis on microfinance off-shore investments, is based on December 2014 financial and social performance indicators reported by a large number of MIVs.

for equity funds.

The survey reveals that the African region will slow down next year.

“If you look at the global picture in terms of forecasted growth,

Symbiotics has identified 110 MIVs in the world, with 84 of them

MIVs are expected to grow at 6% next year – the lowest forecast-

being included in the latest survey, representing 96% of the total

ed growth in several years.African growth will certainly be lower

market share, which is estimated at $10.4bn AUM.

than in 2014, but we still expect it to be higher than in other

Marina Parashkevova Holmegaard, Market Research Analyst at Symbiotics, said that there are seven regional MIVs that are fo-

regions," said Lehner.

Moreover, markets are evolving very fast with important growth

cused exclusively on Africa, and many other global focused funds

and regulation changes, according to Lehner, who said that as

that have Africa allocations.

a consequence the monitoring of the market and of each MFIs

In 2014 there were two new funds launched, both with a specific country focus – one on Rwanda and another one on the Demo-

remains important.

“Issues such as overindebtedness and regulation of risk man-

cratic Republic Congo: the Microfinance Challenge Fund Rwanda,

agement as well as opportunities like mobile banking, housing

managed by the Frankfurt School of Finance & Management,

and energy loans are modifying the market very quickly and need

and the FPM SA (Fonds pour l’inclusion financière en République

to be monitored closely," he said.

Démocratique Congo), managed by Incofin.

Incorporated in 2004 in Geneva, Symbiotics is an investment

Holmegaard said that the majority of the regional funds invest

company specialized in emerging, sustainable and inclusive

in debt instruments and there are also a number of hybrid and

finance which offers market research, investment advisory and

equity funds.

asset management services.

Vincent Lehner, Head of Financial Institutions at Symbiotics,

Symbiotics is managing Regmifa, the largest regional debt

added that there are also many MIVs that are trying to diversify

microfinance investment fund for Sub-Saharan Africa, dedicated

their strategies by turning to Africa because of its potential and

to fostering economic development through the support of micro,

due to the slower growth of the market in other regions.

small and mid-sized enterprises.

“Growth has been falling for the last four quarters and the manufacturing sector

domestic economy,” he added.

Nigeria will not be eligible for re-entry for

is now in recession with negative growth

at least 12 months from the date of exclu-

over the last two consecutive quarters. The

sion, according to JPMorgan.

CBN’s policy choice is not sustainable in the longer run. The only hope for success with the CBN’s current policy is a recovery in the oil price,” he said.

"Should the oil price fail to recover, the CBN will ultimately have no choice but to

DEALS

AXA ACQUIRES 18.6% STAKE IN UTILITY COMPANY ERANOVE

sion and distribution, from the Bouygues Group.

Laurent Clamagirand, CIO of AXA, said: “The combined factors of a severe shortage of power generation capacity in Africa and high rates of GDP and population growth give Eranove a significant opportunity to build a leading energy platform across the continent.”

“Eranove is already a successful and well

abandon the current rigidity of its FX regime

AXA Group through AXA’s Real Estate divi-

established business, with strong man-

and allow the NGN to find a more competi-

sion, has taken a 18.6% stake in the Eranove

agement and a large customer base. Our

tive rate. Regrettably, by this time avoidable

Group, a West African utility company with

long-term investment and commitment to

damage would have been inflicted on the

operations in power generation, transmis-

Africa will support the growth of Eranove

8 | www.africaglobalfunds.com

NEWS

OCTOBER 2015

as well as positively impact the countries it serves”,” he added.

Emerging Capital Partners (ECP), which

MOVERS & SHAKERS

holds a 55.9% stake in Eranove via its ECP

Phatisa promotes Bradley to Joint Man-

short-term insurance, fiduciary and distribution

Africa Fund II, has welcomed AXA as new

aging Partner

businesses in addition to her current portfolio

shareholder.

Phatisa, a private equity fund manager that

which includes wealth advisory, stockbroking and

invests throughout sub-Saharan Africa, has pro-

asset management. Nqweni joined Barclays in her

Chairman of the Board of Eranove, said:

moted Stuart Bradley from Senior Partner to Joint

current role in 2010.

“Having a top-flight investor like AXA Real

Managing Partner. Bradley joins Duncan Owen as

Estate on board is great news for Eranove

part of the firm’s senior leadership team. Bradley

deVere Group names Hobbs as its Chair-

and a great pleasure for ECP.”

has been an integral part of the Phatisa team,

man

Vincent Le Guennou, Co-CEO of ECP and

Formerly known as Finagestion, the

since its inception in 2005. During his career, he

deVere Group, one of the world's largest inde-

Eranove Group was created when Bouygues

has raised in excess of $850m for African funds,

pendent financial advisory organizations, has

combined the African assets of its subsidi-

supported private equity, and worked closely with

named Peter Hobbs as its Chairman. Hobbs joined

ary SAUR into a single company.

the firm’s staff, investors and stakeholders alike.

deVere Group's Board of Directors in June 2013 in

ECP first bought into Eranove’s capital in

a non-executive role. He was previously a former

2008 and acquired a majority holding a year

Cattaneo to lead EAIF's growth drive

director of Generali International and Generali

later.

The Emerging Africa Infrastructure Fund (EAIF),

Pan Europe and ultimately responsible for the

part of the Private Infrastructure Development

Generali Group's strategic innovation programs

of installed electricity generating capacity

Group, has appointed Emilio Cattaneo as its first

and developments in more than 60 countries

in the Ivory Coast, supplying 1,136 MW via

Executive Director. In his role at EAIF, Cattaneo

worldwide.

two of its subsidiaries, Compagnie Ivoiri-

will focus on implementing the Fund’s growth

enne d’électricité (CIE) and Compagnie Ivo-

strategy, securing deeper penetration of the

Giralt to lead BNY Mellon’s Global Tax

irienne de production d’électricité (CIPREL).

sectors EAIF lends to, providing strategic advice

Services

to the board and strengthening and widening re-

BNY Mellon has appointed Mariano Giralt as head

thermic power station and also manages

lations with donor governments, banks, advisers

of Global Tax Services, responsible for the growth

the transport and distribution network.

and key audiences in Africa and Europe.

and development of this business. Previously he

Eranove currently accounts for almost 70%

CIE operates six hydroelectric and a

CIPREL operates one of the country’s most

was head of Tax Services for Europe, the Middle

important thermal power stations, where

Buchanan joins Maitland from Catalyst

East and Africa. Giralt will continue to report to

the company is currently completing its

Maitland, a global third-party fund administrator,

Dan Kramer, head of Global Fund Accounting and

expansion through one of the largest infra-

has appointed Charles Buchanan as Senior Busi-

Issuer Services Client Service Delivery at BNY

structure investments in recent years in the

ness Development Manager for Africa. Buchanan,

Mellon.

Ivory Coast (EUR 343.6 million).

who joined the Business Development and Client

Phase one (111 MW gas turbine) opened

Management team on July 27, is based in Cape

GIIN hires Balloch as COO

in January 2014, while phase two (111 MW

Town, reporting to Andre le Roux, Maitland’s Head

The Global Impact Investing Network (GIIN), a

steam turbine) should start operation at

of Business Development and Client Management

nonprofit organization dedicated to increasing

the end of 2015.

– Africa, based in Johannesburg.

the scale and effectiveness of impact investing,

Eranove is also represented in the water

has appointed Susan Balloch as its new Chief

sector through Société de distribution

Nqweni joins Barclays Africa as CEO of

Operating Officer. With more than a decade of

d’eau de la Côte d’Ivoire (SODECI) and Séné-

WIMI

private equity experience, Balloch joins the GIIN

galaise des Eaux (SDE), which are by way

Barclays Africa Group has appointed Nomkhita

from an angel investment group Golden Seeds,

of delegation of public service, the leading

Nqweni as Chief Executive of Wealth, Investment

where she was a Managing Director. While at

African players in producing and distribut-

Management and Insurance (WIMI), effective

Golden Seeds, she helped review and evaluate

ing drinking water and sanitation.

immediately. Nqweni, who heads wealth and

investment opportunities and was a member of

investment management at the bank, with R268bn

the group that recommends companies to present

in AUM, will be responsible for the Absa Life,

to investors.

Eranove has also focused on expanding across Africa in recent years, winning a technical support contract from Régideso in the Democratic Republic of Congo in 2012 and in June 2015, signing a contract to design, build and operate the hydroelectric power station at Kenié with the government of Mali, through their subsidiary Kenié Energie Renouvable.

Although investment in Eranove is the first move into Africa by AXA Real Estate, Pierre

Like what you're reading?

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NEWS

Vaquier, CEO, said that AXA's real estate and infrastructure division is already a diverse

OCTOBER 2015

ment in Nakuru Town’s housing sector.

“We are very optimistic that this co-invest-

erdeen’s direct equity and fixed income teams.

investor, which now has operations in 24

ment with Tamarind Properties will have a

countries and investments across direct

significant impact on Nakuru reducing the

Capital, said: “Aberdeen is an investment

property and infrastructure.

housing shortage, and creating over 200

house we have immense respect for, and

jobs during the construction period and

with which we share a similar investment

close to 100 jobs after completion,” he said.

philosophy and appreciation of the benefits

“Our investment in Eranove is another milestone in terms of widening the global expansion of our real asset investments as we take a holistic approach to assets and

MARKETS AND INDUSTRY NEWS

industries to deliver long-term growth on

ABERDEEN ACQUIRES ADVANCE EMERGING CAPITAL

behalf of our clients,” he said.

Andrew Lister, Co-CIO of Advance Emerging

of the closed end fund structure. Sitting within Aberdeen’s rapidly growing Alternatives business will, we believe, enable us to share ideas and best practice to the benefit of our existing investors.”

DEALS

Aberdeen Asset Management has said it will

PAHF INVESTS IN KENYAN RESIDENTIAL DEVELOPMENT

acquire 100% ownership of Advance Emerg-

funds will not be double-charged on any

ing Capital (AEC), a London-based special-

Aberdeen funds held in the portfolios.

ist investment manager with over $633m (£409m) across a range of investment funds.

In line with Aberdeen’s fee policy, the AEC

The AEC transaction is subject to regulatory approval from the UK Financial

The Pan African Housing Fund (PAHF), man-

The transaction is part of Aberdeen’s

aged by Phatisa, has entered into an agree-

strategy to strengthen its alternatives

the Boards of Directors of Advance Frontier

ment with Tamarind Properties to develop

capabilities to meet growing demand from

Markets Fund and Advance Developing

140 single-family homes in a residential

investors that are looking to diversify their

Markets Fund, to which AEC currently acts

development in Nakuru Town, Kenya.

portfolios.

as Investment Manager.

The development, known as Nakuru Mead-

Martin Gilbert, CEO of Aberdeen Asset

Conduct Authority and has the support of

It is intended to complete the transaction

ows, is on a 10-acre piece of land, overlook-

Management, said: “The acquisition of Ad-

ing Lions Hills, Sirikwa caves, and the busy

vance Emerging Capital brings to Aberdeen

Nairobi-Nakuru Highway near Nakuru’s Free

a dedicated and highly experienced fund

MARKETS AND INDUSTRY NEWS

Area trading centre.

management team, expands further our

EGYPT: INVESTORS HIT PAUSE ON CURRENCY RISKS

Nakuru Town is located north-west of Nai-

closed end fund business and adds to the

robi and is the fourth largest urban center

range of alternative investment capabilities

in Kenya.

we already offer.”

It faces rapid population growth, estimat-

“AEC investors will benefit from the

during the fourth quarter of 2015.

Recent weakness in the Egyptian market is

ed at two million residents, with a supply

management team being part of a larger,

leading investors to look again for opportu-

gap of 8,000 housing units each year.

independent asset manager and the ability

nities, but currency risks remain the major

to draw on the Group’s established distri-

obstacle, according to Simon Kitchen, Direc-

bution and operational expertise in regard

tor of MENA Strategy at EFG Hermes.

Nakuru Meadows will help meet this demand.

Joe Mungai, Tamarind Properties’ Managing Director, said that construction of the

to closed end funds,” he said.

AEC manages the Advance Frontier Markets

“Investors are looking for clarity on the FX policy. The Egyptian pound is overvalued

units will be done in two phases: “Phase

Fund and the Advance Frontier Opportuni-

right now. There is a lot of speculation when

one will comprise 104 units, and phase two

ties Fund, both of which invest into Africa

and how much it might devalue. And this is

36 units. The estimated completion time is

and have a 32.9% and 26.8% allocation

a big factor in investors’ calculations right

24 months.”

accordingly (as of July 31, 2015).

now,” he said.

PAHF is a private equity fund that provides

This step will provide the opportunity to

Kitchen stressed that there is not a lot of

risk capital to the fast-growing and lucra-

expand the offering globally, across a wider

communication from the Central Bank of

tive middle and affordable housing sector

range of additional strategies within the

Egypt on this issue, so it’s difficult to pin

in East and Central Africa.

fund of closed end funds sector, when com-

down when the currency might move.

The deal represents the Fund’s fourth and largest investment in Kenya, affirming its

bined with the broader Aberdeen Alternatives capability.

commitment to providing equity finance to

The AEC team includes four investment

experienced and reputable property devel-

professionals with over 50 years of com-

opers to enable the increase in the supply

bined investment experience.

of affordable middle class housing in East Africa, Zambia and Mozambique.

Okomboli Ong’ong’a, Phatisa’s Partner for Eastern Africa, PAHF, said that Nakuru Meadows will be a game-changing develop-

10 | www.africaglobalfunds.com

They will be based in Aberdeen’s London

“The FX market is not working smoothly, so in some cases investors have found it slow to repatriate profits from investments in the country,” he added.

Kitchen said that at the moment he sees value in industrials in Egypt, adding that the

office and will be part of the Group’s Alter-

problem for industrial companies for some

natives business which is led by Andrew

time has been the shortage of energy.

McCaffery.

The team will be independent of Ab-

“We see an improvement towards the end of this year, because it will be cooler and

NEWS

it means less demand for electricity and

OCTOBER 2015

in 44 different countries.

curities and corporate actions reference

that frees up gas for industrial use. But also

Continental Re offers a full suite of both

Egypt is going to be importing more energy

treaty and facultative non-life and life rein-

ics data, Worldwide Equity Analytics, to

in late 2015, so that increases the availabil-

surance products.

its securities data offering.

data specialist, has added equity analyt-

ity of energy for industrial companies and

C-Re began writing non-life insurance

Jonathan Bloch, CEO of EDI, said: “As

that can lead to recovery in earnings,” he

in 1987 and listed on the Nigerian Stock

regulatory and compliance needs grow

said.

Exchange (NSE) in 2007.

investment firms need more and more

He added that one could argue that there is value in real estate companies in Egypt.

“Real estate companies have traditionally been a very good hedge against devalua-

In February 2007, through its Africa Fund II

analytics in order to enable them to

and Central Africa Growth Sicar, ECP invest-

calculate and gauge risk and compliance

ed $25.8m for a 30% stake in C-Re.

with the myriad of new regulations.”

Under ECP’s ownership, Continental Re

“Exchange Data International now

tion and inflation, but they’ve often fallen

has grown to become a leading pan-African

provides analytics for both bonds and

short in terms of generating free cash flow. I

reinsurer.

equities covering over 50 data points,” he

would maybe prefer stocks in Egypt that are

During its holding period, ECP and its

told Africa Global Funds.

generating some yield where there is some

investment partners supported the recapi-

free-cash flow for shareholders,” he told

talization of the business, strengthened the

identify the sources of risk and returns

Africa Global Funds.

senior management team and facilitated its

in their portfolios and project their

regional expansion to support Continental

volatility.

Kitchen said that overall he sees a recovery in the Egyptian capital markets compared to 2-3 years, when it was very quiet and expects it to continue over the next year.

When asked about opportunities in other

Re’s growth ambitions.

Hurley Doddy, Co-CEO of ECP and outgoing

This new service enables clients to

It comprises a customisable set of more than 60 equity derived data fields such

Chairman of Continental Re, said: “ECP’s in-

as Average Daily Volume, Simple Moving

vestment in Continental Re highlights how

Averages, Alpha, Beta, and R-squared.

North African markets, Kitchen mentioned

we partner with high growth companies

Morocco, saying that although the country

with proven business models and transform

service contains key reference and pricing

has gone through a lot of positive develop-

them into regional champions.”

data providing clients with a comprehen-

ment, the Moroccan economy is still geared to that in Europe.

“Europe is still the major trade partner

“With ECP’s support, Continental Re has grown from a primarily Nigerian focused

In addition to the analytics data, the

sive overview of the global equity market.

Bloch said that the addition of the

business into a leading pan-African reinsur-

Worldwide Equity Analytics service was

and the major source of investment. But

er, increasing its presence on the conti-

the logical next step after the launch last

the European economy is not particularly

nent from two to six countries. We believe

year of their bond analytics dataset.

healthy right now,” he said.

that Continental Re will leverage Saham’s

“In terms of capital markets, Morocco has

“As a data provider it is important for us

industry expertise and relationships across

to ensure we supply clients with data that

capital controls, and that means that the

the continent to further achieve its goals

enables them to make informed decisions

equity markets are still quite expensive.

in Africa and create value for shareholder,”

and allows them to comply with their risk

They’ve been underperforming for some

said Doddy.

management criteria,” he said.

time,” he added.

EXITS

As the insurance arm of the Saham Group, Saham Finances is actively following its growth strategy in Africa and the Middle

The Worldwide Equity Analytics service is available as an end of day feed via FTP. The file can be customised as regards

ECP EXITS CONTINENTAL RE TO SAHAM FINANCES

East.

Emerging Capital Partners (ECP) along with

insurance companies through 650 branches

investment community make informed

its investment partners, have announced

throughout Africa and has a team of 3 000

decisions through the provision of fast,

the sale of a 53.6% share of the Nigerian

collaborators.

accurate timely and affordable data ref-

It is present in 26 countries through 49 subsidiaries, including 28 insurance and re-

data fields, exchanges or countries covered.

EDI helps the global financial and

reinsurance company, Continental Reinsur-

“The acquisition is part of the continual

ance, to Saham Finances, the insurance arm

expansion plan of the group; this acquisi-

of Saham Group.

tion allows Saham Finances to consolidate

cludes worldwide equity and fixed income

its development in Africa,” said Saham

corporate actions, dividends, static

Finances in a statement.

reference data, closing prices and shares

Created in 1985, Continental Reinsurance (Continental Re) represents one of the main regional stakeholders in the reinsurance market.

The company enjoys significant geographic

ASSET SERVICING

erence services.

EDI’s extensive content database in-

outstanding, delivered via data feeds and the Internet. special emphasis on emerging and fron-

the continent (Nigeria, Cameroon, the Ivory

EDI ADDS WORLDWIDE EQUITY ANALYTICS

Coast, Botswana Kenya and Tunisia), working

Exchange Data International (EDI), a se-

Latin America and the Middle East.

coverage with six regional offices across

The firm covers all major markets with tier markets in Africa, Asia, the Far East,

www.africaglobalfunds.com | 11

ANALYSIS

OCTOBER 2015

SOUTH AFRICAN

HEDGE FUNDS: Not ready for ESG?

South Africa formally encourages investors to integrate into their investment decisions sustainability issues such as environmental, social and governance (ESG). Anna Lyudvig explores whether SA hedge funds have been taking ESG issues seriously.

D

evelopments in South Africa, such as changes to

“mostly reactive” with ESG implementation: “Probably there are

Regulation 28 of the South African Pension Fund Act and

a large number of industry participants who may say that they

the launch of the Code for Responsible Investing in

do integrate ESG factors into their analysis but that it is at a very

South Africa (CRISA) a few years ago, have put a growing emphasis on ESG (Environmental, Social and Governance) factors. South

superficial level.”

Rentzke says that ESG integration is one aspect of a manager’s

Africa mandates that institutional investors including pension

policy regarding responsible investing and SA hedge funds in some

funds “give appropriate consideration to any factor which may

instances do pay attention to some of these factors in their analy-

materially affect the sustainable long-term performance of a fund's

sis process.

assets, including factors of an environmental, social and governance character”.

She points out that hedge funds in SA are predominantly long/ short equity and the managers won’t disclose their short positions

Pension funds are one of the primary investors in South African

for fear of not ever being given an audience with management:

hedge funds. While it seems that South African government is se-

“This curtails the extent to which they can then implement other

rious about sustainable investments, has the South African hedge

aspects of responsible investing especially around engagement

fund industry been proactive with ESG implementation? James

with companies.”

Brice, Managing Director at EBS Advisory, thinks that it hasn’t, say-

“Also those hedge funds that have trading books are not interest-

ing that hedge funds have been “very slow to incorporate ESG into

ed in being long term, patient investors and for them the invest-

the decision-making frameworks”.

ment case is all about exploiting a short term anomaly in the share

“In fact, since the key personnel have left GEPF [Government Employees Pension Fund] and PIC [Public Investment Corporation], the whole CRISA momentum has really been lost. At best, small investment firms have generated a policy and placed it on the website with no further action, but the majority have not done even this,” he stresses.

price rather than investing long term, engaging with management and having a view on responsible investment,” she adds.

“ Even though some SA hedge fund managers have started incorporating some of the ESG principals in their investments analysis, it is still in its infancy - Eugene Visage

Eugene Visage, Head of Hedge Fund Investments at Novare Investments, agrees, saying: “There has been increased awareness by investors towards

Nevertheless, EBS Advisory’s Brice argues that ESG factors can be

this type of investments approach, but SA (and more specifically

part of strategies that include short sales of securities, saying that

the local asset managers) are still lagging when compared to its

management feedback on topical issues should be incorporated

international peers.”

into asset management strategies, rather than relying on published

“Even though some SA hedge fund managers have started incorporating some of the ESG principals in their investments analysis, it is still in its infancy,” he adds.

For Claire Rentzke, Head of Manager Research at 27four Investment Managers, South African hedge fund industry has been

12 | www.africaglobalfunds.com

data.

“Shorting a stock is, in our opinion, legitimate if one feels that management's response to a critical issue that resulted in the share price decline is inadequate. Similarly, buying at the bottom of the cycle of a stock that has been hit by ESG issues, such as

ANALYSIS

OCTOBER 2015

Lonmin, is legitimate if we feel that management's responses are

ers (OMMM), one of the PRI signatories, says: “OMMM hedge funds

credible and are targeting the correct route causes,” he says.

does place an emphasis on ESG principles both through our qualitative investment due diligence of managers and further through

ESG FACTORS AND INVESTMENT PERFORMANCE

our corporate governance risk review. The former is performed by

Some argue that ESG factors, when integrated into investment

our investment team, the latter by a third party. If these principles

analysis and decision making, may offer investors potential long-

are lacking in a manager we may not invest with them.”

term performance advantages. The link between ESG factors and

He adds that businesses that have poor ESG principles and prac-

investment performance was formalized by the United Nations in

tices may not receive capital investment by shareholders, par-

2006 when it promoted the Principles for Responsible Investment

ticularly those investors that have a focus on ESG practices: “This

(PRI), a set of practice standards offered for voluntary adoption by

would affect business share price and performance. Certain ESG

investors.

regulations which are avoided by businesses may affect them in

The PRI Initiative has quickly become the leading global network for investors to publicly demonstrate their commitment to responsible investment, and the number of PRI signatories exposed to

“ The adoption of ESG principles is an issue that may be addressed by hedge fund managers in their investment mandate - Udesh Naicker

hedge fund strategies is growing significantly each year.

For Rentzke, ESG factors can affect the performance of an investment portfolio, although she says the evidence is a bit tricky and the time horizon a bit too short to be able to prove direct correla-

the long run in the form of fines and loss of revenue i.e carbon tax emissions.”

Brierley says that Governance is the principle which will have

tions: “Governance factors have been shown to have the biggest

the greatest effect on valuation: “Managers will also evaluate

impact and there is evidence that suggests that poorly run compa-

the impact that businesses have on the environment and society

nies have poorer share price performance than well governed com-

although it is difficult to include these in valuations. Managers are

panies. When it comes to E and S then typically a major negative

not likely to avoid a business which does not have a strong social

event will trigger a selloff in the share price.”

or environmental process, they are however likely to place a higher

As a fund of funds, 27Four Investment Managers, a PRI signatory, applies its responsible investment polices at the level of manager

multiple on these businesses.”

According to Brierley, OMMM monitors ESG risks through its

selection. “We analyze the systems and processes that our under-

external corporate governance risk review, which takes place on an

lying managers have in place with regards to the integration of ESG

annual basis and through an ongoing interaction with managers:

factors into their investment research and portfolio construction,”

“During manager selection, poor ESG practices will affect OMMM’s

says Rentzke.

manager ratings and rankings of these managers.”

She says that 27four assesses the ability of each asset manager that they use to integrate ESG factors into the investment pro-

FURTHER ADOPTION?

cess and the importance that sustainable investing plays within

While industry experts agree that adoption of ESG principles has

the organization: “27four recognizes the importance of long term

been slow in the industry, they also agree that there are certain

sustainable returns and as such part of our asset manager due

benefits of sustainable investing. Brierley says: “This is a benefit to

diligence process is centered on the asset managers’ commitment

society, the planet and the sustainability of both in the long run.

to responsible investing and ability to implement ESG analysis into

In business this it is only fair and equitable to all to follow proper

their process.”

principles and practices of good governance.”

“Questionnaires centered on responsible investing are sent to the

Rentzke adds: “It allows and facilitates a long term time horizon

asset managers on a bi-annual basis. Not only is their expertise in

which is typically where we should be looking when committing

this area assessed but also the developments and progress that

capital that is long term in nature such as pension fund assets.

they have made in the responsible investing space over the preced-

Not only do well run companies tend to perform better but where

ing six months,” she adds.

externalities can be priced in and the cost of those externalities

“We scrutinize the investment analysis process and the portfolio construction process to understand how the asset managers are

reduced it will impact positively on the bottom line.”

There are many issues to consider in relation to responsible

building in an analysis of the various ESG factors and the impact

investment and hedge funds. The fact that hedge funds, by their

this has on valuations and the ultimate portfolios. In this way we

nature, are unlikely to be long-term investments make the align-

can see whether the skills exist in the investment team to properly

ment of long-term ESG interests a challenge. Udesh Naicker, Head

analyze the factors and their impacts and understand if the manag-

of Hedge Funds at the Financial Services Board of South Africa,

er is able to provide any specific ESG focus in the portfolio should

concludes: “The adoption of ESG principles is an issue that may be

clients have specific requirements in terms of their own responsi-

addressed by hedge fund managers in their investment mandate.

ble investing policies,” she says.

As the regulator, we do not prescribe issues that the managers

Stephen Brierley, Head of Hedge Funds at Old Mutual Multi Manag-

must include in their mandates.”

www.africaglobalfunds.com | 13

Q&A

OCTOBER 2015

Actis: Longest Standing Investor Actis, an emerging markets investor, focuses on investments in Africa, Asia and Latin America. The firm has a strong track record of backing high-quality businesses in Africa with over $3bn invested in 23 countries across the continent to date. AGF’s Managing Editor Anna Lyudvig speaks with David Cooke, Director at Actis, about the firm’s investment strategy in Africa, opportunities and challenges.

ANNA LYUDVIG (AL): DAVID, PLEASE TELL US ABOUT ACTIS’S FOOTPRINT IN AFRICA. DAVID COOKE (DC): Actis was established in 2004, building on a 60 year legacy after spinning out from CDC Group, the UK development finance institution. We’ve invested over $3bn of capital in 23 African countries – and that’s across three different platforms. We have a private equity business, an energy fund and a dedicated Sub-Saharan Africa real estate fund. Our Africa team consists of c.30 professionals operating from four offices on the ground: Cairo, Lagos, Nairobi and Johannesburg. We’ve done 70 deals and we’ve exited 43 of those. That probably makes us the longest standing investor in the continent with the most experienced track record.

AL: HOW DID THE AFRICAN PRIVATE EQUITY LANDSCAPE CHANGED OVER THIS TIME? DC: Ten years ago in the African context, having capital was almost a differentiator in itself. Today with the growth of the private equity asset class in the region and new funds being set up, if it’s just about capital, then we probably got the wrong partner. So how you differentiate yourself with owners and managers of businesses is critical. What we do is that we’ve chosen specific sectors, so we

14 | www.africaglobalfunds.com

Q&A

OCTOBER 2015

can demonstrate real value add in terms of understanding of the

rent fund. Given the size of the Egyptian, Nigerian and South African

business and its sector, having local teams on the ground gives us

economies, that’s where we’re going to see the larger ticket sizes of

deep ingrained local knowledge. Also, the owners and managers of

the private equity in the continent and where we’re going to see the

businesses are far more familiar with what private equity can do for

most frequent opportunities. But having said that we’ve recently

them as we continue to demonstrate success stories.

invested in an education provider in Tunisia and in a retail business

AL: TELL US A BIT MORE ABOUT YOUR INVESTMENT STRATEGY IN AFRICA? DC: The big drivers of our strategy across all three businesses are very similar – rising domestic consumption driven by the rapid

in Kenya. We are largely looking at capital transactions in West Africa as well.

AL: AND WHAT’S INVESTORS’ APPETITE FOR AFRICAN PRIVATE EQUITY?

expansion of the new consumer class, and the need for sustained

DC: Over the last 10 years we’ve seen investors’ appetite grow for

investment in domestic infrastructure; education, energy, financial

different parts of emerging markets. And right now Africa is a pop-

institutions, healthcare and real estate.

ular place for investors to seek growth opportunities. We are seeing

Within our energy fund we focus on power generation and power

a substantial increase in investors’ appetite for the Africa compo-

distribution. For example, Actis Energy 3 has invested in Came-

nent in our pan-Emerging Markets strategy. We are seeing a number

roon’s national grid and created a $1.9bn pan-African renewable

of large funds being raised in Africa and I don’t see that going away.

energy platform.

I think provided that investors continue to see the returns despite

Our real estate strategy is focused on retail and office developments in East, West and Southern Africa, excluding South Africa.

Some of the developments include Ghana’s first green office building One Airport Square in Accra, and East Africa’s largest retail centre, Garden City in Nairobi.

And then our private equity business focuses on four sectors:

risks that appetite will remain the same.

AL: CAN YOU TOUCH A BIT ON THE CHALLENGES OF INVESTING IN AFRICA? DC: I think right now in terms of 2015, the strength of the US Dollar has been a real challenge. But I think some of the more commonly

financial services, consumer, industrials and healthcare. Within the

cited challenges, around political instability in particular, often

first two sectors we invest around 70% of our private equity capital.

present very interesting opportunities. Take Egypt for example.

Some of our recent deals include investment in Coricraft Group,

Right through the Arab Spring we continued to invest in in the

one of South Africa’s leading home furnishings retailers and invest-

country. A lot of investors walked away from Egypt at the time. We

ment in Integrated Diagnostics Holdings (IDH), the largest private

decided to focus on defensive sectors and through that period

sector healthcare diagnostics service provider in Egypt.

we’ve made fantastic returns by investing in businesses that we

AL: DOES YOUR AFRICA STRATEGY DIFFER FROM OTHER EMERGING MARKETS?

understand well.

I think if you are on the ground, some of these challenges present really interesting opportunities and our long-term view allow us

DC: Our Africa strategy is no different to what we do in other

to invest and operate in the region in spite of occasional macro-

emerging markets. It’s remarkable how similar the underlying needs

economic and political volatility. We understand the local market

of businesses are, whether they are in Africa, Latin America, India

dynamics very well and will look to continue to invest across all

or China. We are consistent with our strategy, however, having local

regions in Africa

presence on the ground is critical for managing risks and being able to identify the value in the opportunities that we see.

AL: WHAT CAN WE EXPECT FROM ACTIS IN THE NEAR FUTURE?

AL: WHAT’S YOUR TYPICAL TICKET SIZE FOR AFRICA?

ties are presenting some interesting deal opportunities. As owners

DC: I think it’s interesting that the current global macro uncertain-

DC: Within our private equity business, we are looking to invest a

of businesses look to de-risk, that presents some interesting

minimum of $50m in any one transaction, and up to $150m of our

opportunities. We can’t disclose specific opportunities that we look

fund capital. We’ve done a lot larger transactions than that when

at, but we have a couple more deals in the pipeline.

we’ve brought in some co-investors. Most of what we do is controlled investments, but we are also very familiar and comfortable

AL: WHAT IS YOUR OUTLOOK FOR AFRICAN PRIVATE EQUITY?

with taking other co-investors – that might be a minority type of

DC: I think we will continue to see the investor opportunity within

deal.

the emergence of successful high growth companies, either com-

AL: WHAT RETURNS ARE YOU TARGETING? DC: We look at 25% gross IRR AL: ARE THERE ANY MARKETS THAT STAND OUT FOR ACTIS AT THE MOMENT?

panies that are striving to become national champions or larger scale companies that are looking to expand into other parts of the region. If you look at our pipeline at the moment, we see a number of those opportunities. Actis’ experience, global network and sector specialisation positions us to work with investee companies on all aspects of their growth and value creation. I think one has to in-

DC: We would look across the continent for opportunities. We’ve

creasingly understand that if you are able to demonstrate the real

invested in North, East, West and Southern Africa within our cur-

value add, Africa is a very positive story.

www.africaglobalfunds.com | 15

MARKET

OCTOBER 2015

MAURITIUS Gateway to Africa

(AfDB) to mention but a few. The AfDB currently houses more than 50% of its African private equity structures in Mauritius.

Mauritius has the most conducive enabling environment in Africa for private equity (PE) funds, in terms of general investment climate, perceived low political risk, and availability of financial service providers backed by skilled professionals, and enabling regulatory and institutional frameworks. Mauritius is equally popular among fund managers and investors.

NATURAL PLATFORM FOR PE FUNDS A private equity fund can be structured as a GBC1 vehicle or even as a limited partnership. The Limited Partnership Act (LPA) was enacted in 2011. It aims at enhancing the use of the Mauritian investment platform primarily by US and European private equity funds

As the African continent continues to attract global interest, Mauritius is rising to become the natural gateway for investing in Africa, writes Shaffick Hamuth, Economist and former Senior Investment Advisor of the Board of Investment, Mauritius

W

foraying investment opportunities in African and Asian markets.

The principal attraction of the limited partnership for the partners is its tax transparency and neutrality potential. Private equity funds holding a Category 1 Global Business Companies (GBC1) are subject to tax at the maximum effective rate of 3% on its foreign sourced income.

PE funds may also accede to the benefits of Double Taxation Avoidance Agreements (DTAAs) signed by Mauritius. Mauritius has a network of 41 DTAAs, 17 of which are with African countries. In addition, tax exemption on offshore dividends, the non-existence of capital gains tax or withholding interest, the absence of duty on

ith unprecedented potential of growth, a rising mid-

issued capital, unrestricted repatriation of profits and capital, and

dle-class and rapid urbanisation, today Africa offers to

the distinct advantages of being a treaty-based jurisdiction create

the global investor community unmatched investment

an appealing and conducive environment for PE funds in Mauritius.

opportunities in various sectors comprising infrastructure and real

Furthermore, through its network of 19 Investment Promotion and

estate, financial and banking services, telecommunications and

Protection Agreements (IPPAs) signed with African nations, Mauri-

mobile telephony, consumables and agribusiness as well as energy,

tius offers unparalleled risk mitigation with respect to investments

to mention but a few. And this is where Mauritius comes into the

in Africa. IPPAs normally guarantee the following to the investors

picture.

from the signatory States:

Risk mitigation and investment protection in the region through its wide network of Investment Promotion and Protection Agree-

• Free repatriation of investment capital and returns;

ments (IPPAs), fiscal efficiency through its growing network of

• Guarantee against expropriation;

Double Taxation Avoidance Agreements (DTAAs), preferential market

• Most favoured nation rule with respect to treatment of invest-

access through regional trading blocs, a hybrid legal system, stateof-the-art infrastructure, the presence of international players and a readily available pool of professionals are just some of the key benefits that Mauritius offers as the financial and investment

ment, compensation for losses in case of war or armed conflict or riot; and • Arrangement for settlement of disputes between investors and the contracting states.

centre of Africa.

The growing use of the Mauritian platform by international invest-

Mauritius is thus a natural platform for private equity investments

ment and private equity funds confirms the island's position as the

into Africa. The country, hailed as the star and key of the Indian

preferred jurisdiction for investing in Africa. Today the country is

Ocean, offers a very stable and safe political and economic envi-

home to some of the leading actors in the African private equity

ronment and is usually referred as the example for many African

space including Actis, Helios and the African Development Bank

countries. Mauritius has also a strategic geographical location, with

16 | www.africaglobalfunds.com

MARKET

OCTOBER 2015

regular direct flights across the Indian Ocean Islands, Africa, Dubai,

its ambition, liesin its small size to attract adequate financial

Europe and other Asian Countries.

players. One strategy currently in used by the SEM to counter this weakness, is tocollaborate with other regional exchanges such

CAPITAL MARKETS

as the Maldives Stock Exchange and National Stock Exchange of

In line with its internationalization strategy, Mauritius, through the

India. In doing so, SEM is hoping to create

Stock Exchange of Mauritius, has initiated a framework re-engineer-

synergies between each exchangewhich

ing process to cater for a broader range of products to be listed on

will help to spur more growth and op-

the Exchange with a view to attract regional and global capital. For

portunities in terms of financial product

instance, Listing Rules have been reviewed and made more flexible

developments, to helping the Mauritian

for the listing of Global Funds and other rules introduced for the

Exchange to better integrate within the

listing of:

international financial system.

• Global Business Companies and specialist debt instruments targeted towards qualified institutional and retail investors, including Eurobonds;

SECTOR OPPORTUNITIES Shaffick Hamuth

• Depository Receipts and Mineral and Exploration Companies;

When considering a sector, foreign investors must keep in mind the potential of serving the entire region from Mauritius.

• Exchange Traded Funds;

One must not forget the planned billions of rupees of investment

• Exchange Traded Notes and Structured Products.

in the port area expansion to convert Port Louis, the capital, into a regional shipping hub, while the recently modernised airport is

Mauritius Stock Exchange has positioned itself as one of the only

already on its way to become an aviation hub. The country also

two African Exchanges offering structured products in their port-

enjoys good infrastructure in terms of roads logistics, telecommu-

folio. Equity and debt products may be listed, traded and settled in

nications and valuable human capital that is bilingual and literate.

MUR, USD, EUR, GBP and ZAR and investors now have the option to

Mauritius is also positioning itself as a real estate landmark with

invest in a wider range of foreign products as well as Mauritius domestic companies.

All these measures and co-op-

“ Mauritius has the most conducive enabling environment in Africa for private equity funds - Shaffick Hamuth

eration with other Exchanges, the recent one being with The NationalStock Exchange of India, depicts the Authorities’ determination

many interesting offerings to global investors. Other emerging

and ambition in making Mauritius stand as a hub for investing into

sectors ripe for investment include agribusiness, ICT, tourism,

Africa and also as a strong listing platform for global funds.

manufacturing, knowledge and medical sectors, seafood and the

It must be pointed out that the Stock Exchange of Mauritius

Ocean Economy.

(SEM) is slowly becoming adynamic and reliable regional exchange platform. Though being a small exchange, the SEM has over the

OCEAN ECONOMY

yearsmanaged to be featured in the index of someof the major

This is a term coined to define the vast untapped opportunities

international institutions such as the S&P All Africa equity index.

presented by the Exclusive Economic Zone of Mauritius, which

Furthermore, the SEM isgradually shifting from an equity-centric

is 1,000 times the size of Mauritius Island (itself about 2,000 sq

domestic exchange to a multi-asset class exchange, thus becom-

km), and another continental shelf of 396,000 square kilometres

ing one of the first exchanges listed in Africa, where investors and

co-managed with the Republic of Seychelles . The Mauritian govern-

investment firms can list, trade and settle structured products in

ment ambitions to make the marine and allied sectors an impor-

USD, EUR and GBP. The Africa Sustainability Fund and Novare Africa

tant pillar of the economy, with such activities as shipbuilding,

Property Fund One are afew examples of the newly listed special-

bunkering, fishing and fish processing for export, exploration of our

isedstructured funds on the Mauritian Exchange thathave been

seabeds for polymodules, hydrocarbons and minerals. Extraction

quite successfully among professional investors.

of deep sea water rich in nutrients is envisaged for green cooling

Moreover, African-based ventures and corporate firms like mining

technologies as well as for use in high end aquaculture and sea-

companiesare graduallystarting to use the Mauritian exchange as

weed culture, cosmetics and pharmaceuticals, agrochemicals, water

a regional platform to raise debt or equity at an attractive rate

bottling and thalassotherapy. Ocean renewable energy is another

thanks toseveral low costfees structures provided by the SEM. In

possible venture.

order to encourage and promote sustainable reporting, the SEM

The recent Economic Vision 2030 spelt out by the Prime Minister

has recently launched a Sustainability Index that has been inspired

Sir Anerood Jugnauth, in line with the Government Programme

from the Global Reporting G4 guidelines.

presented in January 2015 and the Budget 2015/2016, aims to drasti-

In a near future,SEM is aspiring to emerge as a capital raising

cally transform the economy, giving birth to new emerging sectors,

platform for African-focused investments routed through the

while consolidating existing ones, the objective being to turn Mau-

Global Business Sector. The major flaw faced by the SEM to achieve

ritius into a high-income country. The future indeed looks bright.

www.africaglobalfunds.com | 17

ANALYSIS

OCTOBER 2015

SOUTH AFRICA: Passive Investment Products

Investment in South African passive investment products grows by R100bn over past two years to R247bn, writes Mike Brown, Managing Director, etfSA.co.za

T

he relatively small size of the passive index tracking investment business in South Africa, relative to the well-established active investment management industry in the country, is often subject to

comment. However, there has been some measurable swing to passive investment products in recent years. Back in 2010, passive investment products were found to account for less than 1% of the assets under management in the retail unit trust industry.

However, as at mid-2015, the combined assets under management by South African index tracking ETFs and passive unit trusts had risen to R143bn, which is an estimated 11% of the total R1.3trn under management by active investment unit trust products. If you add the holdings of South African assets by international investors, through ETFs listed on global stock markets (outside of South Africa) which accounts for an estimated R97.4bn, the total passive assets under management (AUM) rise to R247bn, or some 20% of the AUM of the actively managed unit trust products available to retail investors in South Africa.

INVESTORS IN FOREIGN BASED SOUTH AFRICAN ETFS There are currently five dedicated Exchange Traded funds (ETFs) listed on stock markets in the USA (1) and in Europe (4) that track, either the MSCI Top 50, or the FTSE/JSE Top 40 indices of South African equities. As at end August 2015, the total assets under management (AUM) in these ETFs was $428m (R5.78trn).

In addition, there is significant foreign investment in emerging market ETFs, which invest in broad emerging market indices. The MSCI (Morgan Stanley Composite Indices) emerging market index, for instance, covers 23 emerging markets in Asia, Europe, Africa and South America. South Africa currently makes up 8% of the index weighting of this MSCI Emerging Market index. Currently, over 20 ETFs in Europe offer exposure to broad emerging market indices and 60 USA funds

18 | www.africaglobalfunds.com

ANALYSIS

OCTOBER 2015

PASSIVE INVESTMENT FUNDS – TOTAL ASSETS UNDER MANAGEMENT (AUM) - AS AT 30 JUNE 2015 1. South African Index Trackers

US$ (million)

Rand (million)

January 2013 (R million)

Exchange Traded Funds (ETFs)

-

69 403

41 663

Exchange Traded Notes (ETNs)

-

58 612

6 107

-

128 015

47 770

15 456

6 630

-

143 471

54 400

428

5 777

7 816

644

8 694

A) SA Exchange Traded Products (ETPs) (Listed on the JSE)

Sub-total B) Index Tracking Unit Trusts Total South Africa 2. Foreign ETPs A) South Africa only funds B) Emerging Market ETFs (SA allocation 8%) Europe (US$) 8 056 million USA (US$) 82 131 million Total Foreign ETP Investment in SA

6 570

88 695

7 642

103 167

93 616

246 638

148 016

GRAND TOTAL

SOUTH AFRICAN ETPS LISTED IN EUROPE AND USA United States

investor of emerging market equity investments, but this is likely to

AUM (US$ million)

iShares MSCI South Africa

345

Europe HSBC MSCI South Africa

6

iShares MSCI South Africa

28

Lyxor South Africa – FTSE/JSE Top 40

38

RBS Market Access FTSE/JSE Top 40

11

Total USA & Europe Rand Value ZAR/US$ 13,5

85 800

US$428 R5 778

be cyclical and should recover in time. Of course the depreciation of the rand (from ZAR9 to the US dollar) between early-2013 and mid-2015 (ZAR13.5 to the US dollar), has absorbed this decline in rand terms. Since 2006, the local ETP industry has grown from nine products, with R12bn under management to the present total of 70 products with R128bn AUM. Of particular interest is the sharp increase in the number of Exchange Traded Notes (ETNs) and the assets under management in ETNs in the past few years. ETNs are popular with certain institutional and segregated portfolio holders because of their low cost, near zero tracking error and high liquidity

Source: etfSA.co.za / Profile Data www.etf.com; www.justetf.com

when dealing through market makers.

In addition, there has been a steady increase in the number of

track these indices. Total AUM is $90.2bn. The 8% share of South Af-

passively managed unit trusts in South Africa. In late 2012, there

rica in the weighting of emerging market indices accounts for $7.2bn

were 15 passive unit trusts with AUM of R6.63bn. As at 30 June 2015,

(R97.4bn).

this total had risen to 28 passive unit trusts with AUM of R15.46bn.

Ten different asset managers are offering index tracking unit trusts

SOUTH AFRICAN INDEX TRACKERS

to the South African retail investor.

There are 70 ETPs listed on the JSE (ETFs and ETNs), which as at 30 June 2015, had a market capitalisation of R128bn. In addition, 28

FOREIGN PRODUCTS TRACKING SOUTH AFRICAN ASSETS

index tracking unit trusts are currently available to retail investors

There are currently five ETFs listed on foreign exchanges that track

in the local market, accounting for AUM of R15.4bn.

either the MSCI or S&P South African equity market indices. These

The South African passive industry in mid-2015, therefore, accounted for a value of R143.4bn AUM, well up on the R54.4m AUM as

Funds have $428m (R5.78bn) AUM. This is down from $864m in January 2013, reflecting the current slump in emerging markets.

at the beginning of 2013. The passive investment product industry is one of the fastest growing investment sectors in the South

BROAD EMERGING MARKET ETPS

African market.

Many global investors look to gain exposure in developing nation equity markets, through country-fund type ETFs, or else using the

TOTAL PASSIVE ASSETS UNDER MANAGEMENT

broader aggregate emerging market ETFs. South Africa contrib-

The corresponding table summarises the total assets held in pas-

utes a weighting of 8% (behind China, Korea, Taiwan) in the broad

sive products, both in South Africa and, through exchange listed

emerging market MSCI index and so forms an important component

products in South African assets offshore.

of such global exposure to South African shares. There are some 80

The offshore holdings, either directly or indirectly, in South

emerging market ETFs, listed in Europe and the USA stock markets

African equities has fallen from $10.4bn in early 2013 to $7.6bn at

and these funds, with their AUM, are detailed on the etfSA.co.za

present. This largely reflects the declining attraction for the global

website.

www.africaglobalfunds.com | 19

ANALYSIS

OCTOBER 2015

SOUTH AFRICA: The case for infrastructure investing

South Africa has a deep pipeline of available infrastructure assets, affirm Mark van Wyk (top), Head of Impact Investing, and Kasief Isaacs (bottom), Portfolio Manager: Infrastructure Development Fund, Mergence Investment Managers

G

overnments around the world are looking to private funding to contribute to economic and social infrastructure development ranging from rebuilding aging infrastructure to building it from scratch, such

as in large parts of Africa. Whereas foreign direct investment forms the cornerstone of infrastructure development in many African countries, South Africa is in a unique position to source funding locally given the strength and depth of its financial markets and its approximately R4trn long-term retirement savings pool.

Indeed, there is a case to be made for infrastructure investing right now. The macro-economic environment in South Africa is currently characterized by slow economic growth coupled with increasing inflation expectations. Such an environment is ideally suited to the infrastructure investment asset class as the typical earnings drivers of infrastructure assets are not dependent on economic growth and also benefit from increasing inflation.

In addition to the right macro-economic environment, South Africa also has a regulatory enabling environment in the form of Regulation 28 and the Infrastructure Development Act, as well as experienced local fund managers able to offer competitive management fees and demonstrate a specific infrastructure track record.

Yet despite these positive factors, allocations to this asset class still represent less than 0,3% of total asset allocations (included in “Other” in the SA institutional asset allocation graph). This is despite “Other” return expectations being higher when compared to the remaining asset classes.

Benchmark data for asset allocations and track records for infrastructure funds are available internationally. Allocations in South Africa are lagging more developed countries such as Canada and Australia, where some pension funds have allocated up to 15% of their capital to infrastructure as an asset class.

BENEFITS FOR PORTFOLIOS It appears that more information and understanding of the infrastructure asset class is needed to enable the boards of trustees of retirement funds to make allocations to infrastructure. Benefits can be summarized as follows: • Stable long-term cash flows – infrastructure assets provide essential services (think hospitals, prisons, roads, rail, power plants and the like). Demand is often inelastic and therefore there is a very stable return stream.

• Diversification – risk premiums and inflation protection characteristics provide low correlation to other major asset classes.

• Inflation protection – asset incomes are highly predictable and annual increases are linked to inflation.

20 | www.africaglobalfunds.com

ANALYSIS

OCTOBER 2015

SA INSTITUTION ASSET ALLOCATION

beset with major cost overruns and delays.

Average asset Allocation and expected real returns per asset class

Similarly, both Eskom’s new flagship power station builds, Kusile and Medupi, are running around two years behind schedule with the latest cost estimates at least double what was initially budgeted.

Understanding and prioritizing this ever expanding universe of projects and programmes requires an in-depth understanding of the different risk and reward profiles of the underlying assets. At Mergence we map each opportunity using a risk and reward continuum which classifies projects based on project specific characSource: Alexander Forbes Large Manager Survey

• Low sensitivity to GDP – compared to other asset classes, infra-

teristics such as certainty of volume and price risk.

WHAT SHOULD TRUSTEES DO?

structure has a low sensitivity to changes in GDP due to inelastic

The first step to making an allocation to infrastructure for funds

demand and price insensitivity.

is to determine what role infrastructure should play within the

• Attractive long-term returns – median net internal rates of

portfolio. Once the investment policy statement has been amended

return for most unlisted infrastructure funds range from the mid-

to adjust for the expanded investment universe, a holistic look at

teens to low 20’s.

what particular role infrastructure should play can help determine how to invest in the asset class.

In addition, according to Credit Suisse Asset Management, adding

Areas to emphasize while making these decisions involve align-

infrastructure to an institutional portfolio improves the return per

ment of interests with managers, assessment of the management

unit of risk, measured by a higher Sharpe ratio (“Can infrastructure

team’s depth and breadth, and ensuring moderate limits on asset

investing enhance portfolio efficiency?”).

leverage. We generally advise that infrastructure allocations are suitable for pensioner and active portfolios.

WHAT IS AVAILABLE?

We believe there is some urgency around the need for investment

South Africa has a deep pipeline of available infrastructure

into infrastructure. The National Development Plan needs to be

assets, with government stating it has over 600 “shovel-ready”

carried out; infrastructure development not only creates jobs and

programmes waiting for implementation. The renewable energy

boost economic growth, but it also builds communities and creates

programme has been highly successful and has provided the model

a better society into which members will retire. There is also the

for how infrastructure projects can work. Projects are gathering

merit of investing in assets that have a positive economic spinoff,

momentum, supported by various government initiatives including

as infrastructure spend has the potential to boost GDP growth.

Operation Phakisa and the Presidential Infrastructure Coordinating Committee (PICC).

Operation Phakisa is a government initiative designed to fast track the implementation of solutions on critical development is-

In meeting their aim of matching long-term liabilities to assets – and considering broader societal needs - we strongly encourage boards of trustees to consider infrastructure investment in their allocation choices.

sues, including those highlighted in the National Development Plan 2030 such as poverty and unemployment. The PICC is mandated by Cabinet to plan and coordinate a National Infrastructure Plan.

The PICC alone has identified 18 Strategic Infrastructure Projects including schools, hospitals, port expansions, new transport and logistics corridors, additional water infrastructure and expansion of the existing energy procurement programmes. Government is looking to increase and strengthen its partnership with the private sector to not only finance but also to lead the construction and operation of many of these projects.

UNDERSTANDING RISKS While infrastructure presents an attractive investment opportunity, large capital intensive projects are not without risk. While the Gautrain project seems to be turning a corner, its early years were

Medupi Power Station - development of the coal yard 2014

www.africaglobalfunds.com | 21

REGIONAL PERFORMANCE

OCTOBER 2015

AFRICAN MARKETS PERFORMANCE AFRICA EQUITY INDICES (GROSS TOTAL RETURNS USD) Country

AFRICA SOVEREIGN BOND INDICES (TOTAL RETURNS USD)

Sep-15

3 Month

1 Year

Sep-15

YTD

1 Year

Botswana

-5.55%

-7.80%

+5.45%

Botswana

+0.31%

-4.04%

-5.28%

Cote d'Ivoire

+1.78%

+11.77%

+16.08%

Egypt

+1.65%

+0.97%

+6.00%

Egypt

+1.43%

-13.57%

-22.87%

Ghana

+5.23%

-1.02%

+5.39%

Country

Ghana

-2.58%

-5.40%

-26.22%

Kenya

-3.98%

-14.18%

-13.33%

Kenya

+4.45%

-14.70%

-21.06%

Mauritius

-0.42%

-5.88%

-5.46%

Mauritius

-1.35%

-4.65%

-12.72%

Morocco

-0.06%

-4.67%

-4.25%

Morocco

-2.28%

-3.68%

-6.83%

Namibia

-3.80%

-12.81%

-13.01%

Namibia

+0.22%

+0.54%

+10.84%

Nigeria

+2.89%

+1.80%

-15.05%

Nigeria

+6.41%

-9.22%

-12.72%

South Africa

-4.25%

-13.90%

-12.71%

South Africa

-6.43%

-17.87%

-15.60%

Tanzania

+0.37%

-7.98%

-10.70%

-0.28%

-1.10%

-3.10%

Tunisia

-4.49%

-5.78%

-1.23%

Tunisia

Zambia

-25.82%

-36.97%

-47.14%

Uganda

+1.50%

-21.41%

-24.18%

-2.31%

-12.58%

-19.42%

Zambia

-25.93%

-39.26%

-40.74%

Zimbabwe

Source: S&P Dow Jones Indices

Source: S&P Dow Jones Indices

AFRICA ECONOMIC INDICATORS (as of 5/10/2015)

COUNTRY FOCUS: MOROCCO

Interest Rate (%)

Inflation Rate (%)

CPI

Unempl.

Rate (%)

GDP Growth Rate (%)

Debt to GDP (%)

The Bank

Botswana

6.00

3.00

182.00

20.00

2.50

23.10

(BAM, the

Cameroon

2.45

3.14

108.00

3.80

5.10

19.90

kept the policy

Cape Verde

7.50

0.30

120.00

15.80

0.10

114.00

Côte d'Ivoire

3.50

1.20

-

5.30

9.50

36.41

Egypt

8.75

7.90

165.00

12.70

3.00

90.50

Ghana

25.00

17.30

153.00

5.20

3.90

67.60

25 bps.

Kenya

11.50

5.97

161.00

40.00

5.50

49.80

Jacques Verreynne, analyst at NKC

Malawi

25.00

23.00

182.00

6.60

6.00

18.00

Mauritius

4.65

1.10

108.00

7.80

3.00

52.80

Morocco

2.50

1.70

116.00

8.70

4.30

63.89

Mozambique

7.50

2.28

116.00

17.00

5.90

55.40

Namibia

6.50

3.40

113.00

28.10

4.20

24.00

Nigeria

13.00

9.00

175.00

7.50

2.35

10.50

Rwanda

6.50

2.20

-

3.40

7.00

28.00

South Africa

6.00

4.60

116.00

25.00

1.20

39.00

Swaziland

5.50

5.40

-

28.50

2.50

9.90

enough before making the transition to

Tanzania

12.00

6.40

159.00

10.30

6.50

39.90

a floating exchange rate regime. In the

Tunisia

4.75

4.15

127.00

15.20

0.70

47.50

Uganda

16.00

7.20

227.00

4.20

4.90

34.70

Zambia

12.50

7.70

-

15.00

7.10

31.00

Zimbabwe

11.94

-2.77

-

11.30

4.00

77.00

Country

Source: Trading economics, African Central Banks

al-Maghrib central bank) interest rate unchanged at its monetary policy meeting on September 22. The rate has now remained at 2.5% since December 2014, when it was lowered by

African Economics, said given that the current exchange rate regime has served the country well, the shift to a fully floating regime is expected to take a few more years. The authorities will be particularly wary of liberalizing the regime at a time when global market uncertainty is high.

“We expect the Moroccan authorities to take a cautious approach and to wait until global market conditions are stable

meantime, though, there is little risk to the currency peg as forex reserves are high and the current account deficit is fairly small. As a result, we expect the dirham to remain stable against the dollar and euro over the short to medium term.”

www.africaglobalfunds.com | 23

FUND PERFORMANCE (USD RETURNS)

YTD

1 Month

1 Year

3 Year

OCTOBER 2015

5 Year

AUM ($m)

Strategy

Focus

Domicile

Type

Start

-0.90%

206.00 (09/15)

Equity

African region

Bermuda

Open-End

7/98

147.00 (09/15)

Fixed Income

Africa ex-SA

Bermuda

Open-End

3/13

-

210.00 (09/15)

Equity

Africa ex-SA

Bermuda

Open-End

1/12

-

84.16 (08/15)

Equity

African region Luxembourg

SICAV

6/12

-

442.14 (09/15)

Equity

African region

Open-End

1/07

Equity

African region Luxembourg

Open-End

6/13

SICAV

6/09

Open-End

11/11

UCITS III

11/08

Allan Gray Africa Equity Fund (as-of 30/09/15) -24.70%

-

-35.20%

-4.80%

Allan Gray Africa ex-SA Bond Fund (as-of 30/09/15) -12.10%

-

-15.80%

-

-

Allan Gray Africa ex-SA Equity Fund (as-of 30/09/15) -24.70%

-

-38.10%

-3.80%

Alquity Africa Fund (M) (as-of 07/10/15) -21.53%

-

-29.78%

-18.80%

Arisaig Africa Consumer Fund (as-of 07/10/15) -18.63%

-

-22.63%

-

Mauritius

Ashburton Africa Equity Opportunities Fund (I) (as-of 07/10/15) -20.56%

-

-31.37%

-

-

25.97 (09/15)

Bellevue Funds Lux - BB African Opportunities (as-of 07/10/15) -16.41%

+2.17%

-24.71%

-

-

72.79 (10/15)

Equity

African region Luxembourg

-

2.22 (10/15)

Equity

African region

African region Luxembourg

Commonwealth Africa Fund (as-of 03/09/15) -11.35%

-

-12.45%

-

USA

Cornhill Management - WIOF African Performance Fund (A) (as-of 07/10/15) -

+3.46%

-25.68%

-16.87%

-

5.87 (10/15)

Mixed

-

541.80 (09/15)

Equity

Africa ex-SA

Ireland

Unit Trust

10/08

-

70.95 (09/15)

Equity

African region

Ireland

Unit Trust

8/08

-

-

Mixed

African region

Jersey

Open-End

4/09

-

25.86 (06/15)

Mixed

African region Cayman Isl.

Open-End

9/10

103.71 (08/15)

Equity

African region Luxembourg

Open-End

5/12

-

14.10 (07/15)

Equity

African region

Mauritius

Open-End

7/08

+2.30%

46.96 (09/15)

Equity

African region

BVI

Open-End

6/05

-28.80%

0.51 (09/15)

Resources

African region

BVI

Open-End

1/09

+5.20%

+2.70%

1.49 (09/15)

Equity

East Africa

BVI

Open-End

1/08

-4.80%

+1.20%

3.65 (09/15)

Equity

Nigeria

BVI

Open-End

3/07

-0.70%

8.82 (09/15)

Equity

Zimbabwe

BVI

Open-End

3/07

36.69 (10/15)

Equity

SICAV

03/12

Coronation Africa Frontiers Fund (as-of 07/10/15) -18.65%

-

-25.37%

-

Coronation All Africa Fund (as-of 07/10/15) -20.15%

-

-27.72%

-

Duet Africa Opportunities Fund (as-of 07/10/15) -11.49%

-

-24.05%

-

Fleming Africa Fund Ltd (as-of 30/06/15) -6.20%

-0.10%

-9.31%

-

Franklin Templeton IF - Templeton Africa Fund (as-of 07/10/15) -18.77%

-

-26.61%

-3.57%

-

IPRO African Market Leaders Fund (as-of 07/10/15) -15.84%

-

-22.45%

-

Imara African Opportunities Fund (as-of 30/09/15) -12.05%

-0.10%

-19.00%

+1.70%

Imara African Resources Fund (as-of 30/09/15) -42.70%

-10.10%

-52.20%

-36.60%

Imara East Africa Fund (as-of 30/09/15) -20.40%

+0.50%

-22.20%

Imara Nigeria Fund (as-of 30/09/15) -12.10%

+10.60%

-35.00%

Imara Zimbabwe Fund (as-of 30/09/15) -7.20%

-1.30%

-24.50%

-3.50%

Invest AD - Emerging Africa Fund (A) (as-of 07/10/15) -18.25%

-

-28.44%

-0.58%

-

African region Luxembourg

Investec Africa Fixed Income Opportunities (as-of 07/10/15) -10.78%

-

-12.83%

-

-

31.63 (09/15)

Fixed Income

African region

Guernsey

Open-End

8/13

-

-

6.86 (09/15)

Mixed

Africa ex-SA

Guernsey

Open-End

4/12

-3.87%

16.30 (10/15)

Equity

African region Luxembourg

SICAV

2/11

-4.24%

118.27 (09/15)

Equity

African region

Open-End

10/07

Investec Africa Fund (as-of 07/10/15) -17.49%

-

-30.64%

Investec Africa Opportunities Fund (I) (as-of 07/10/15) -14.21%

-

-22.81%

-4.03%

Investec Pan Africa Fund (A) (as-of 07/10/15) -22.09%

-

-32.91%

24 | www.africaglobalfunds.com

-5.28%

Guernsey

DISCLAIMER: All data is provided “as is” for your information and personal use only, and is not intended for trading purposes or advice.

FUND PERFORMANCE (USD RETURNS)

YTD

1 Month

1 Year

3 Year

OCTOBER 2015

5 Year

AUM ($m)

Strategy

273.52 (10/15)

Equity

Focus

Domicile

Type

Start

African region Luxembourg

SICAV

5/08

African region Luxembourg

SICAV

9/09

JPMorgan Funds - Africa Equity Fund (A) (as-of 07/10/15) -15.82%

-

-20.90%

-7.09%

-0.92%

Julius Baer Multistock - Africa Focus Fund (A) (as-of 07/10/15) -19.67%

-9.34%

-31.41%

-12.05%

-11.26%

17.92 (10/15)

Equity

-

14.62 (09/15)

Fixed Income

African region

Mauritius

Open-End

2/14

19.33 (10/15)

Equity

African region

Ireland

OEIC

12/12

9.99 (09/15)

Fixed Income

SICAV

8/13

+6.18%

8.24 (10/15)

Equity

Africa ex-SA

Luxembourg

SICAV

9/07

-

26.06 (10/15)

Equity

African region

USA

Open-End

11/10

-

91.65 (10/15)

Equity

African region

Ireland

Open-End

5/10

MCB Africa Bond Fund (A) (as-of 30/09/15) -8.51%

-

-11.32%

-

Magna Umbrella Fund - Africa Fund (as-of 07/10/15) -9.67%

-

-18.84%

-

-

Momentum IF Africa Fixed Income Fund (as-of 07/10/15) -6.00%

-

-5.69%

-

-

African region Luxembourg

Momentum IF Africa ex-SA Equity Fund (as-of 07/10/15) -15.54%

-

-25.83%

+3.23%

Nile Pan Africa Fund (as-of 07/10/15) -11.73%

-

-17.11%

-

Old Mutual African Frontiers Fund (as-of 07/10/15) -10.19%

-

-20.46%

-

Old Mutual MSCI Africa ex-South Africa Index Fund (as-of 07/10/15) -18.66%

-

-33.27%

-

-

84.81 (10/15)

Index

African region

Ireland

SICAV

9/11

Old Mutual Pan African Fund (A) (as-of 07/10/15) -10.33%

-

-

-

-

48.18 (08/15)

Equity

African region

Ireland

ICVC

11/14

-26.03%

-

-

17.91 (10/15)

Equity

African region

France

FCP

8/13

-

30.40 (10/15)

Equity

Africa ex-SA

Dublin

UCITS IV

6/14

-

4.18 (10/15)

Equity

Nigeria

Dublin

UCITS IV

4/14

-

15.21 (10/15)

Equity

Sub-Saharan Luxembourg

SICAV

10/10

6.37 (10/15)

Mixed

African region Luxembourg

FCP

12/11

-0.70%

74.13 (09/15)

Equity

African region

Open-End

1/09

-

2.04 (10/15)

Fixed Income

African region Luxembourg

Open-End

11/09

-

62.88 (10/15)

Equity

African region Luxembourg

SICAV

9/10

-

133.00 (09/15)

Equity

African region

Malta

SICAV

9/11

66.70 (08/15)

Equity

Africa ex-SA

Mauritius

Open-End

1/12

Equity

Africa ex-SA

Mauritius

Open-End

3/13

16.30 (08/15)

Equity

Africa ex-SA

Mauritius

Open-End

11/09

11.70 (08/15)

Equity

Nigeria

Mauritius

Open-End

5/12

SICAV

8/14

-

-

RMA Africa (as-of 07/10/15) -15.57%

-

RenAsset Africa ex S.A. Fund (as-of 07/10/15) -18.97%

-

-33.16%

-

RenAsset Nigeria Fund (C) (as-of 07/10/15) -14.22%

-

-

-

Renaissance Sub-Saharan Fund (as-of 07/10/15) -19.26%

-

-35.24%

-

SGKB LUX Fund - African Dawn Fund I (as-of 07/10/15) -21.23%

-

-30.59%

-17.96%

-

Sanlam African Frontier Markets Fund (A) (as-of 07/10/15) -17.50%

+1.20%

-27.74%

-1.30%

Ireland

Silk Africa Bond Fund (as-of 07/10/15) -11.93%

-

-15.50%

-

Silk African Lions Fund (as-of 07/10/15) -18.99%

-

-26.63%

-

Steyn Capital Africa Fund (as-of 07/10/15) -17.17%

-

-23.68%

-

Sustainable Capital Africa Alpha Fund (as-of 31/08/15) -28.60%

-8.60%

-45.20%

-5.20%

-

Sustainable Capital Africa Consumer Fund (as-of 31/08/15) -16.70%

-3.20%

-20.20%

-

-

11.50 (08/15)

Sustainable Capital Africa Sustainability Fund (as-of 31/08/15) -15.50%

-5.90%

-26.60%

-2.50%

-2.40%

Sustainable Capital Nigeria Fund (as-of 31/08/15) -20.00%

-2.30%

-42.40%

-2.80%

-

Threadneedle Lux - Stanlib Africa Equity (as-of 07/10/15) -18.96%

-

-28.98%

-

-

19.47 (06/15)

Equity

-

-

-

-

-

-

-

Source: Company Data, Morningstar

African region Luxembourg -

-

www.africaglobalfunds.com | 25

PROFILE

OCTOBER 2015

AMETHIS FINANCE: Eye-catching Impact Investor

Paris-based Amethis Finance stands out from the African private equity crowd. Its overwhelmingly private shareholder base is certainly a rarity in a universe heavily dependent on development finance institutions (DFIs), whilst the management team’s long-term dedication to the African continent has led them to design their very own investment and impact philosophy. We met with Managing Partner Luc Rigouzzo in Cape Town to find out what that might be

By Thomas Venon, Co-Founder, Eighteen East Group

W

ith an academic background in agronomy and finance, Luc Rigouzzo fell into the development finance potion from the word go, executing transactions in the agri sector, first on behalf of France’s AFD and

Proparco in the field in Mexico, Ivory Coast and Cameroon, then from the French DFI’s headquarters in Paris. After a three-year tenure at the IFC, he returned to the AFD group in 2000, eventually heading Proparco as its CEO until late 2010, when the French Foreign Ministry brought him in to steer and coordinate the French overseas development aid policy.

With a 25-year track record in developing world investment, 80% of which focused on Africa, Monsieur Rigouzzo then teamed up with fellow Proparco senior executive Laurent Demey and Geneva-based Compagnie Benjamin de Rothschild to launch Amethis Finance, reaching a final closing for fund ‘numero un’ in June 2014. The team now manages $330m for equity investments and $150m for debt through an OPIC facility (at current exchange rates).

INVESTOR BASE AND TEAM As hinted above, the fund raising itself is worthy of interest. As anyone who has ever attended an African private equity conference will unequivocally confirm, DFIs have always been, and are to this day, at the core of most funds’ shareholder base.

Where, we hear panelists cry, would we be without the DFIs? Every year, the advent of the private investor is heralded, at long last allowing European and American development financiers to take a back seat. But evidence of same has been scant.

Not so in the case in point. 94% of Amethis’ shareholders are private. Even more surprisingly, whilst 40% of these are institutions, ranging from insurance companies to funds of funds, the balance is contributed by families and their investment vehicles. Many of these, Mr R. explains, have identified Africa as the next big thing, and saw in Amethis a worthy partner to guide their first steps onto the continent,

26 | www.africaglobalfunds.com

PROFILE

OCTOBER 2015

providing them with the governance and transparent reporting they have grown accustomed to.

Another remarkable feature of the Amethis story is the team itself.

AMETHIS FACT BOX

It is essentially a mix of European investment professionals with long-term exposure to Africa, and African nationals who, having

• PRIVATE EQUITY INVESTMENTS:

typically acquired their academic credentials in Europe, built their

Minority stakes. Amethis will have a long-term approach and

careers at western finance houses. This, Luc Rigouzzo argues, is

a coherent exit strategy in years 5-8, with tickets (on its own

both representative of the transition at play in African investment

risks) from €5 to €15m.

markets, and a strong differentiating factor.

Amethis is indeed in the business of providing growth capital to

• LONG-TERM LENDING:

the companies its team members have encountered at some stage

With a priority to mezzanine / tier 2, designed for capital ex-

or other in the last 25 years, in countries where team members

penditure, acquisitions and project finance, with tickets (on its

were born, have lived or have conducted business.

own risks) from €5 to €20m.

This in turn informs the group’s specific brand of investment philosophy. On the equity side, Amethis typically invests as a minority

• ADVISORY AND ARRANGEMENT CAPACITY:

shareholder, acting as a partner to management and catalyzing

Amethis will offer fundraising (debt and equity) from banks,

the investee company’s transition from national to regional scale

family offices, development finance institutions, and private

through access to its network of clients and partners.

equity actors leveraging the team’s network.

IMPACT INVESTING In an environment where the increasing availability of financing options mean entrepreneurs conduct due diligence on their private

consequences for failure to deliver and adequate support mecha-

equity suitors, Amethis wants to come across as honest, fair and

nisms for success. Rigorous measurement completes the picture.

unapologetic about their strong ESG and impact stance.

The Rothschild association comes particularly handy here as a high

This neatly brings us to the question of where the firm stands on

caliber specialist conducts the impact audit.

impact. As Luc Rigouzzo will tell you, with something like the air of

Last but not least, co-investment is here more than just a fashion-

a weary merchant mariner, through his long career, he has been

able catch-phrase, as every other deal the fund has made to date

exposed to every impact brand, fashion, measurement scheme

has involved co-investors, bringing in an additional external dollar

ever to come out of the hyperactive minds of development finance

to every dollar invested by Amethis.

professionals. The overarching conclusion he finds himself able to

The unique shareholder base backing Amethis Finance is in itself

draw is that it generally turns out that the most financially success-

of great interest. Whilst African private equity practitioners will

ful investments are also the ones delivering the most impact.

see there a hopeful sign of a diminishing reliance on government

This of course seems to make sense, since to be in a position to

backed DFIs, impact investing enthusiasts may well see the in-

deliver impact for any prolonged period of time a business first and

volvement of family investors as a step towards bringing impactful,

foremost needs to steer clear of financial ruin. Amethis therefore

financially viable investment in Africa one step closer to private

seeks investments with strong financial return prospects, but will

individual investors. When the time comes for Amethis Finance to

only consider these if they are ‘impact positive’. Impact objec-

raise fund ‘numero deux’, it will be interesting to see who else the

tives are then built into the investment agreement, complete with

Amethis’ team can bring to the party.

AMETHIS PORTFOLIO Investment

Sector

Location

Deal type

Investment date

Boulos

FMCG – Paper Mills

Nigeria

Convertible loan

August 2015

Econet

Telecommunications

Zimbabwe,

Debt Investment

May 2015

Financial services

Mauritius and Madagascar – Regional

Equity investment

February 2015

F&B wholesale and retail

Ivory Coast

Equity investment

December 2014

CIEL Finance Compagnie de Distribution de Côte d’Ivoire Ramco Plexus

Printing & Packaging

Kenya

Equity investment

December 2014

Fidelity Bank

Financial Institutions

Ghana

Equity investment

April 2014

Velogic

Logistics

Mauritius

Equity investment

December 2013

UT Bank

Financial Institutions

Ghana

Debt investment

December 2013

PétroIvoire

Oil & Gas Distribution

Ivory Coast

Equity investment

July 2013

Chase Bank

Financial institutions

Kenya

Equity investment

March 2013 Source: Amethis Finance

www.africaglobalfunds.com | 27

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