growth and investment panel
TRANSCRIPT
Growth and Investment Panel:
Funding options
Panellists …
Moderator Alon Avnon, Managing Director, BizDevOS
C2C, Dar Es Salaam, July 2015
Five Common Myths about Africa
There is not enough money for investment in Africa
Investors do not have the appetite for the level of risk in Africa
The project / venture is too big / small, too early / too mature, or not in the right space
Regulatory and legal framework ecosystem does not enable certain forms of finance
International investors are very picky
Five Common Myths
There is not enough money for investment in Africa
Investors do not have the appetite for the level of risk in Africa
The project / venture is too big / small, too early / too mature, or not in the right space
Regulatory and legal framework ecosystem does not enable certain forms of finance
International investors are very picky
Foreign Direct Investment (FDI)
Mixed picture for the Continent. Sub-Saharan Africa’s FDI is
growing strong
Other Investment Channels
Strong investment growth across all non-governmental sources
African Public Offerings in London “…there are more than 100 companies listed in London…” “…10 African countries listed on LSE in 2013, double 2012’s...” “… From 2008 to 2012 African companies raised $6.9Bn…” Baker & McKinzie “… we’ll continue a strong IPO market as investor appetite to African equities just keep growing…” Goldman-Sachs
CAGR: 49%
CAGR: 10%
Source: economist.com
Five Common Myths
There is not enough money for investment in Africa
Investors do not have the appetite for the level of risk in Africa
The project / venture is too big / small, too early / too mature, or not in the right space
Regulatory and legal framework ecosystem does not enable certain forms of finance
International investors are very picky
Perceptions is everything…..
Experienced African investors view investment in Africa significantly more
positive than others
Perceptions tend to (eventually) converge with reality
Key Ecosystem indicators are in the same range as the BRICs
Rwanda 32 South Africa 41
Ghana 67 Zambia 83
Russia 92
China 96
Brazil 116 Ethiopia 125 Kenya 129
Uganda 132 India 134
Mozambique 139
Tanzania 145
Nigeria 147 Côte d'Ivoire 167 Cameroon 168
Senegal 178 Angola 179
Ease of Doing Business Ranking
Five Common Myths
There is not enough money for investment in Africa
Investors do not have the appetite for the level of risk in Africa
The project / venture is too big / small, too early / too mature, or not in the right space
Regulatory and legal framework ecosystem does not enable certain forms of finance
International investors are very picky
Not in the right space or geography
Africa is not about minerals only and not only South-
Africa any longer Source: The Search for Returns
Investment pattern
The African private equity investment model is catching up with practices in
the developed world
Five Common Myths
There is not enough money for investment in Africa
Investors do not have the appetite for the level of risk in Africa
The project / venture is too big / small, too early / too mature, or not in the right space
Regulatory and legal framework ecosystem does not enable certain forms of finance
International investors are very picky
Raising money from the public…..
IPO is a limited route to raise fund or exit, but not impossible. As the economy grows and volume increases, public listing will become
accessible to more companies.
African Public Offerings in London “…there are more than 100 companies listed in London…” “…10 African countries listed on LSE in 2013, double 2012’s...” “… From 2008 to 2012 African companies raised $6.9Bn…” Baker & McKenzie “… we’ll continue a strong IPO market as investor appetite to African equities just keep growing…” Goldman-Sachs
Source: RisCura, ASEA
Number
The oldest form of finance….
Although debt is available to African enterprises, it is not being used to the
same extent as in other countries. An Opportunity?
$0-25M $25-50M $50-100M >$100M
African Debt %
African Equity %
Global
Debt %
Source: RisCura, Pitchbook
Five Common Myths
There is not enough money for investment in Africa
Investors do not have the appetite for the level of risk in Africa
The project / venture is too big / small, too early / too mature, or not in the right space
Regulatory and legal framework ecosystem does not enable certain forms of finance
International investors are very picky