…Reflections and projections to mobilise more private finance
…Pension funds in Africa were highlighted as a vital source of capital to diversify funding and bridge the finance gap.
WED APRIL 24 2024-theGBJournal|AVCA, the African Private Capital Association kicked off its 20th Annual Conference & VC Summit in Johannesburg yesterday.
Institutional investors, fund managers, policymakers, global and local investors and entrepreneurs opened the major international gathering, convening 700+ private capital leaders from over 60 countries to align on strategies to power the next 20 years of Africa’s growth.
Abi Mustapha-Maduakor, Chief Executive Officer, AVCA, introduced the flagship forum by noting that despite a challenging macroeconomic environment in recent years, “Africa’s private capital industry has remained resilient and will continue to rise.” She reflected on AVCA’s theme for the conference – “embracing change and shaping the next era of Africa’s prosperity.”
Phuthuma Nhleko, Chairman and Co-Founder, Phembani Group, followed with an instructive keynote address rallying private investors to back innovative businesses to drive prosperity at scale.
Reaffirming the region’s competitive edge, he highlighted the imperative for policymakers, business leaders and investors to harness the fourth industrial revolution, powered by artificial intelligence (AI) and the digital economy.
Calling for a new plan for the transformation ahead, he argued: “the size of population generates 50 per cent of Gross Domestic Product (GDP). By 2050, we will have 2.5 billion Africans that constitute over a quarter of humanity, with over forty per cent of youth below the age of 18. By this time, Nigeria’s population is expected to be bigger than the US.”
Characterised by periods of globalisation, innovation and the disruption required, the opening panel, ‘20/20 Vision: Reflections on the Last 20 years’, charted the industry’s evolution over the last two decades. ‘Tokunboh Ishmael, Co-founder and Managing Director, Alitheia Capital, described the exponential growth witnessed throughout the second decade of private capital expansion in Africa.
Despite clear signs of progress involving the increase in fund managers and assets under management (AUM), industry titans including Wale Adeosun, Founder and Chief Executive Officer, Kuramo Capital Management and Vincent Le Guennou, Chief Executive Officer, Africa50’s Infrastructure Acceleration Fund, aligned that Africa’s private capital industry remains a nascent ecosystem with immense potential.
Wale Adeosun commented on the benefits of bringing institutional investors from the U.S into Africa. Vincent Le Guennou proposed that the traditional private equity model replicated in the continent needs to be adapted and advocated for proactive efforts to attract the US$ 2.3 trillion of domestic capital in Africa that needs to be unlocked. He said: “This needs to be a key objective for the next 10 years.”
Pension funds in Africa were highlighted as a vital source of capital to diversify funding and bridge the finance gap. During the panel, ‘The Long and Windy Road: The Journey to a Successful Fund Close’ Dieynaba Kamara, Partner and Chief Operating Officer, Joliba Capital, expressed that most pension funds needed “education on investing in private equity as an asset class”, especially in Francophone Africa where pension funds prioritise hard assets such as real estate. Jerry Parkes, Chief Executive Officer, Injaro Investments, re-emphasised the need to tap local pools of capital, drawing on Injaro’s launch of Ghana’s first private equity fund, anchored by Ghanaian pension funds.
Investors in Africa face a challenging market for exits due to less developed capital markets. Sharing insights on the panel entitled, ‘Out With the Old, In With the New: Innovative Models to Unlock Liquidity, Laurent Demey, Managing Partner, Amethis, suggested that historically, “The big difference between liquidity in Africa and Europe or the US, has been that if you have a good business, you can sell it. In Africa, it has been a different story”. Despite a lack of exit options, he noted a shift in the industry with far more African companies and investors from emerging markets, such as the Gulf states or Turkey, making deals compared to traditional investors from the Global North.
Perspectives to kickstart a secondaries market were covered in a panel entitled, ‘Charting New Horizons: Secondaries and Continuation Funds’. Prominent voices including Patrice Backer, Partner and Chief Investment Officer, AFIG Funds discussed the secondary market as a viable solution to liquidity constraints in African markets – attracting private finance yet to invest on the continent. John Owers, Director and Head of Funds Solutions, British International Investment, said: “A functioning private capital ecosystem needs to provide options for exits for Limited Partners (LPs), and that is what the secondary market does.”
AVCA announced the winners of the association’s 20th Anniversary Conference Awards, celebrating the outstanding firms and individuals championing private capital in Africa. The new awards feature categories and winners including:
All-rounder Award, International Finance Corporation (IFC); Beyond the Big Four Award, XSML Capital; Breaking Barriers Investor Award, Ziad Oueslati, Executive Founding Partner, AfricInvest; DEI Champion Award, Mastercard Foundation Africa Growth Fund; ESG Champion Award, Development Partners International (DPI); Thought Leader Award, Albert Alsina, Founder and Chief Executive Officer, Mediterrania Capital Partners; and Shapeshifter Award, Helios Investment Partners. The association also honoured Antoine Delaporte, Founder and Managing Partner, Adenia Partners, with the AVCA 20 Champion Award for his long-term commitment to championing AVCA’s mission to catalyse private capital in Africa.
The landmark event is sponsored by leading investors, including African Capital Alliance, Africa50 Infrastructure Partners, African Development Bank (AfDB), AfricInvest, African Infrastructure Investment Managers, Alitheia, ARAF, Benchmark International, BFA Asset Management, British International Investment, Clifford Chance, Convergence Partners, DLA Piper, Economic Development Board Mauritius, Flat6Labs, Founders Factory Africa, Jackson Etti & Edu, Janngo, Joliba Capital, Kigali International Financial Centre, KFW / DEG, Kuramo Capital Management, MCB, Mediterrania Capital Partners, Old Mutual Alternative Investments, New Forests, Norsad Capital, PE Front Office, Proparco Sawari Ventures, Soros Economic Development Fund, Udo Udoma & Belo-Osagie, USAID, Verod, and Visa Foundation.
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Pension funds in Africa were highlighted as a vital source of capital to diversify funding and bridge the finance gap.
