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Transcript of Act is in Review
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Actisin review2011
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Contents
Where we are now
The Actis investment approach
Actis at a glance
Actis timeline
Portolio at work: Vlisco Group
Portolio at work: XP Investimentos
Portolio at work: One Airport SquarePortolio at work: Sterling Add Lie
Portolio at work: Xiabu Xiabu
Portolio at work: Umeme
Actis data
Regions and sectors
Investments
Investors
Portolio companies
Team
The positive power of capital
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Welcome
We launched this report a year ago as a
means to measure our progress as a company.
The feedback was very positive. I hope you
enjoy this new edition for 2011.
Our investors are regularly updated about the
performance of our portfolio using a number
of different channels; this document gives us
the chance to look beyond the figures, to the
heart of our business, our approach and our
people. I continue to feel immense optimismabout the markets in which Actis invests while
also realising we are by no means alone in
recognising this opportunity. Here we pause
for a moment to examine what makes us
different and to note those aspects that
distinguish Actis. This report reflects whatwe see.
Paul FletcherSenior Partner, Actis
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oice development or bank resembles another. Thereare helpul similarities.
And yet all this activity has played out against abackdrop o political transormation and social lux.
In North and West Arica we see revolution bringingdisruption and uncertainty. Macro risk related to oodprices, water availability and scarcity o oil remains.Growth is rarely consistent or constantly paced.The uture is ar rom clear.
What reassurance can an investor ind in these volatile,ast moving markets?
First, that Actis has the experience that is essential tomitigate risk. We have always been o these markets,and will continue to be so. Our long tradition oimmersing ourselves in the cultures and societies inwhich we operate allows us habitually to bring orderto chaos, reaching the point where sustained patternrecognition lets us read subtleties and developmentsintrinsic to any situation. Simply put, this makes usmore competitive, better able to manage risk and highlycommercial in our execution.
It also lets us become trusted business partners tothe CEOs and entrepreneurs with whom we work.Relationship driven opportunities will always be rich inthose countries where personal connections and trustare placed at a premium. There is little doubt that thedeterminedly local aspect o our approach is a triedand tested part o our success.
In Brazil alone, 25 million
citizens have left absolute
poverty since 2003.
Second, we recognise that the world has becomemore sophisticated and we have been able to adapt.Increasingly, specialisation is acknowledged as essentialto maximise inancial outcomes. We must become ever
Where we are now
Just because everything is different doesnt
mean anything has changed Irene Peter
With two thirds o global growth expected to comerom countries outside the G20 by 2030, seekingopportunities outside o the developed world assumesa new urgency. Post-inancial crisis, renewed and everstrengthening enthusiasm or the emerging markets
comes as no surprise to Actis.
The perspective has shited; we have moved rom themargins to the centre o a world view which positionsast growing economies at the heart o any strategicinvestment thesis. But or us, this is lie as usual.We have always been exclusively and unapologeticallyconsumed with the emerging markets, rom our oicesin So Paulo, Nairobi, Mumbai, Singapore, Cairo, Lagos,Johannesburg, London and Beijing; we are one irmin many places investing everywhere rom the DRC toThailand, rom Tanzania to Honduras.
There is little doubt that the
determinedly local aspect of
our approach is a tried and
tested part of our success.
Certainly consumer expectations o everyday prosperityare changing, ast. In Brazil alone, 25 million citizenshave let absolute poverty since 2003. New cars, thateasy anecdotal indicator o individual prosperity, tell usthat Chinas annual auto sales are set to quadruple toover eight million per year by the end o the decadewith the number o new cars hitting the roads eachweek in Beijing already an astonishing 13,000.
Trade routes between our markets have strengthenedin the last 12 months, conveying billions o dollarseach year in commodities, products and services.
We are uniquely placed to respond to this trend building connections between our investee companiesinternationally so they can more readily learn romone another. Our investment managers are skilledat replicating knowledge one ast-ood company or
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We are motivated by a belie that proit is not enough.We see helping the private sector deliver on itsresponsibility to the public good as core to who weare, what we do and how we do it. We call this ethosthe positive power o capital.
The transition o millions o rural survivors to urbanconsumers represents one o the greatest revolutionshumanity has ever known. With more people lited
out o poverty in the last decade than the sum totalo history to date, the opportunity to undamentallychange the nature o inequality across our marketsis compelling.
We recognise that within the emerging markets anew age o dreams is evolving. And these dreams areinnumerable. The Ghanaian mother buying her bolt oluxury branded Dutch Wax abric in Accra to take toher tailor to be dressed in splendour or her daughterswedding. The Kenyan couple paying or their irst caron their Visa card instead o a wad o shilling notes.The young proessional in Rio, enjoying her irst tasteo inancial reedom as she takes a class in personalinvesting beore putting her irst hundred dollars to workon the stock exchange. These vivid dreams are real to usbecause they are maniested across the Actis portolio.
We must serve the changing needs o our emergingmarkets consumers and broader society whether byproviding higher value goods and services to meet theaspirations o the 250 million people in BRIC countriespoised to cross the US$30,000 income threshold in thenext decade, or by doing something as undamentalas keeping the lights on across Sub-Saharan Arica andCentral America.
Actis serves these new consumers whether throughthe provision o tertiary education at scale (with thebuild out o the largest private university chain in China)or our commitment to the healthcare sector (withparticular success to date in India with our investment inSterling Add Lie). The continuing economic developmento these emerging markets inds expression throughoutour portolio. The nature o our unds has evolved rom
an early emphasis on commodities, mineral extraction,natural resources, agribusiness, tea and paper, tobranded goods, personal care and most recentlyto knowledge driven companies.
more surgeon like in our ocus, or the days o thegeneralist investor are numbered. The breadth o ourinvestments across business services, inancial services,industrials, energy, consumer and real estate lets ussolve challenges speciic to each industry.
With the expansion o our internal team dedicated tooperational improvements we can be conident thatwe are encouraging best practice across the portolio.
Whether by the introduction o brand buildingtechniques which enhance the attractiveness o thebusiness to uture vendors (think Reckitts appetite orthe acquisition o our Indian investee company Parasin December 2010), or by the systematic build out oan enhanced management team (as with South Aricaninancial services provider, Alexander Forbes), we makeinterventions that matter.
Creating proper alignment in the business aroundshared goals with world class proessional supporthas been a signiicant part o our progress as a irmover the last year.
Working in cross border teams has become an essentialpart o the investment process, pooling experienceand insight gained rom many data points. We indthis approach brings our sector knowledge to lie, orexample in our investment in GVK Energy which sawthe Energy team pulling resources rom around theglobe to execute an investment in one o Indiasleading power developers in the closing months olast year. This sectoral approach also gives us themettle to build what wasnt there beore: think oour pan-Arican payment processing platorm, EMPH.The development o this buy and build strategy relieson the expertise o a combined London/Arica team:EMPH made its irst acquisition in July 2010 with aninvestment in Mediterranean Smart Cards Company,one o the largest card payment processing companiesin Sub-Saharan Arica.
A new age of dreams is
evolving. And these dreamsare innumerable.
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We make money work hard
for everyone who touches
it, ensuring that when it
returns to its investor it has
enriched the lives of those
who helped it grow.
Our money counts. The returns on that money countor the pensioners, endowment unds and individualsto whom it belongs. The money itsel counts to theentrepreneurs it unds and encourages. And or thehundred thousand plus employees who depend onthat money or their monthly take home it matterseven more.
We are proud to be part o this interdependentcommunity o human beings and buying decisions.We make money work hard or everyone whotouches it, ensuring that when it returns to its investorit has enriched the lives o those who helped it grow.
We think what we do sitting at this intersection ocapital and society, shaping the way in which theseeconomies develop and contributing to the successo their most promising businesses, is a privilege.We ace the unknowns o the year to come withconidence and curiosity.
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Actis pursues an emerging markets investmentthesis which rests on two pillars:
1. Rising personal wealth and domestic consumptiondriven by the rapid expansion o the consumer class
2. Investment in domestic inrastructure.
We apply this thesis to six sectors: Business Services,Consumer, Financial Services, Industrials, Energy and
Real Estate, and ive regions: Arica, South Asia, SouthEast Asia, China and Latin America.Local teams are aligned by sector while a globalInvestment Committee has approval and oversighto all investments. In their day-to-day business ourinvestment proessionals rely on a single, globalservices platorm encompassing Operations, Legal,Finance, IT, Funds Administration, Human Resources,Communications and Knowledge Management.
We generate our inancial returns by patiently growingbusinesses. A group within Actis dedicates its attentionsolely to working with portolio companies, osteringbest in class business practices and long term growth.
Our investment approach is underpinned by theobservance o rigorous Environmental, Social andGovernance (ESG) guidelines. Some are preventativeor precautionary, designed to minimise harm. Othersare intended to maximise the long term value o aninvestment. Throughout the lie-cycle o an investmentthe ESG guidelines maniest themselves in several ways.
Marketing and originationWhen making investment decisions we ask ourselves: Does this business do or cause harm? Is the business in a sector acceptable to us? (We do
not invest in nuclear or military equipment, gambling,tobacco, hard liquor or pornography.)
Is the proposed investment ully acceptable in termso speciic ethical issues e.g. Actiss position in relationto countries with a record o poor human rights?
Does the business currently meet our standards interms o business integrity, climate change, health
and saety, social and environmental issues? What are the long term non-inancial drivers o value? Can we take the business orward in these areas?
The Actis investment approach
Screening and due diligenceI we discover as part o our due diligence that aspectso the business do not yet meet our guidelines, we: Highlight those areas where we have concerns
these may relate to standards o integrity and honesty;or accordance with local laws and internationalbest practice.
Talk openly with the companys management todiscover their ability and willingness to change. I we
are conident that, with our help, all areas o non-compliance can be addressed we will move orward.
Investment managementOnce we are actively managing an investment we workwith the investee company to maximise the upsideenvironmentally and socially, while also reducing risk.Our approach is tailored to each portolio company butthere are a couple o common steps:
Step 1 Identiy the key non-inancial drivers o marketvalue relevant to the portolio company.Step 2 Trace the pathway linking the selected non-inancial parameters to market value. Once these havebeen identiied, set up a small team including companyand Actis representatives. I we need to bring in speciictechnical expertise we will hire local consultants andmanage them.Step 3 We measure and track progress on a quarterlyor annual basis and regularly assess whether we areadding value rom an ESG perspective. The idea is totrack progress up until exit so that we can capture valueat that point. We also benchmark perormance againstbest in class or the company.
ExitWhen we exit we carry out routine business integritychecks in relation to potential buyers and may, or highESG risk investments, proactively assess their ability andappetite or maintaining the guidelines we have putin place.
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Actisat a glance
US$4.6bnTotal unds under management.
101,234Number o employees working in Actisportolio companies around the world.
65Number o portolio companies.
254Actis sta employed in ten oicesaround the globe.
US$26mAmount o money Actis sta have investedover the last six years, helping align their interestswith those o investors.
118Number o Limited Partnersinvested in Actis unds.
Figures as o 31 March 2011.
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Actis timeline
2004
Actis spins out o CDC
May
South Arica wins the bid to
host the 2010 FIFA World Cup.
August
Actis co-leads the investmentin Unza as part o a US$100m
MBO which was, and remains,the largest MBO completed in
Malaysia.
September
Actis takes 80% stake in irstRwandan inancial institution
privatisation, BanqueCommerciale du Rwanda.
November
China signs a landmark tradeagreement with ten South East
Asian countries; the accord couldeventually unite 25% o the
worlds population in a ree-trade zone.
2005MayActis exits Celtel, one o the irst
telecommunications operatorsin Sub-Saharan Arica, in a trade
sale at more than our times itsinitial investment.
August
Actis closes at US$325m or its
India Fund 2.
October
A 4,000-year-old bowl o noodles
unearthed in China is the earliest
example ever ound o one o theworlds most popular oods.
December
Actis helps Suntech launch theirst ever IPO o a privately owned
Chinese company on the NYSE.
2006FebruaryIndias biggest-ever rural jobs
scheme is launched, aimed atliting around 60 million amilies
out o poverty.
March
Actis closes at US$250m or its
China Fund 2.
April
Actis closes at US$100m orits Umbrella Fund and US$115m
or its South Asia Fund 2.
June
Actis closes at US$211m or its
CIFA Fund.
July
China-Tibet railway line, theworlds highest train route, begins
operating. The Pope calls orethical dimension to capitalism.
July
Actis closes at US$355m or itsArica 2 Fund and US$154m or
its Actis Arica Real Estate Fund.
August
Chile and China sign a ree-trade deal, Beijings irst in
South America.
September
Actis closes at US$130m or its
ASEAN Fund, or investment inSouth East Asia.
December
Actis portolio company, Regal
Forest, a Central Americanconsumer retailer, acquires the
Caribbean operations o UK-retailer Courts plc, in the largest
buy-out in the regions history.
2007JuneActis invests US$134m in
one o Nigerias leadingbanks Diamond Bank.
July
Actis backs one o the largestmanagement buy-outs in South
Arica Alexander Forbes.
July
Actis exits Punjab Tractors Ltd the irst successul private equity
backed privatisation and one o
the irst control deals in India.
July
10th anniversary o Hong Kongsreturn to China.
November
Joaquim Alberto Chrissano wins
the Mo Ibrahim Foundationaward, which recognises and
celebrates excellence in Aricanleadership and stimulates debate
on good governance across Sub-Saharan Arica and the world.
November
Actis completes the sale o
Globeleqs power assets acrossLatin America, Asia and North
Arica. Actis retains Sub-Saharanpower assets and relaunches
Globeleq as a global powerdevelopment company.
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2008JulyActis consolidates its pioneering
role in Arican real estate with theoicial launch o Accra Mall, the
irst and only A-grade shoppingmall and leisure centre in Ghana.
July
While the world suers rom
the subprime allout in the US,investors experience a leap in
the share price o Industrial &Commercial Bank o China (ICBC)
making it the worlds biggest
bank by market capitalisation.
August
Actis leads the US$700mconsortium buy-out o Alstom
SA (now named Actom), anelectrical engineering business
in South Arica.
August
Beijing hosts the Olympics.
November
Actis closes its pan-emerging
markets private equity und,Actis Emerging Markets 3,
at US$2.9bn.
November
Actis invests in leading hot potchain, Xiabu Xiabu, completing
a hat-trick o transactions in theChinese consumer sector.
December
Arican exports roserom US$319bn in 2007
to US$413.7bn in 2008,a 29.7% rise.
2009AprilActis signs UNPRI agreement.
June
World Bank raises 2009 Chinagrowth orecast to 7.2%.
BRIC leaders hold irst summit todiscuss the global inancial crisis.
July
Actis invests US$244m in
Commercial International Bank,a leading Egyptian bank.
AugustSouth Arican President JacobZuma announces 2.4bn rand
(US$300m) relie scheme orworkers acing redundancy in
South Arica.
September
Actis raises US$751m or itsund, Actis Inrastructure 2.
October
Brazil wins bid tohost 2016 Olympics.
October
DFCU wins the Global
Banking Alliance or Women2009 Innovation Award.
November
Actis portolio company 7 DaysInn announces its listing on the
New York Stock Exchange.
2010JanuaryGlobeleq completes the
acquisition o Energias Renovablesde Mesoamerica SA, the owner,
operator and leading developer owind projects in Central America.
January
China posts a 17.7% rise in
exports in December, suggestingit has overtaken Germany as the
worlds biggest exporter.
May
Actis Acts launches its communityoutreach programme across theemerging markets.
July
Spain wins the World Cup 2010
at Soccer City in Johannesburg.
November
Actis completes its third
investment in Brazil in asmany months ater investing
US$58m in XP Investimentos(supermarket chain, CSD and
cleaning products company,Gtex, completed in September
and October respectively).
December
Reckitt Benckiser agree toacquire Indian personal care
company, Paras, well knownor brands including Krack,
Moov and Set Wet hair gel,or approximately US$726m.
December
Actis invests US$77m in one oIndias leading power developers,
GVK Energy.
2011JanuaryUnrest sparked in Tunisia
towards the end o 2010triggers the Jasmine Revolution.
On 25 January a nationalholiday in Egypt is renamed
the Day o Rage, protests anddemonstrations ollow, Hosni
Mubarak resigns as President17 days later.
March
Actis wins PEIs Best Private
Equity Firm in Arica award or
the ourth year running and winsPEIs Best Private Equity Firm inLatin America or the irst time.
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Actis portfolio at work
Vlisco Group
Fashions fade, but style is eternal.And for more than 160 years theVlisco Group has led the way,creating and manufacturing themost coveted wax fabrics in Africa.
As synonymous with West Aricaas Thailand is with raw silk or Italyis with leather, the Vlisco Groups
branded abrics have a long historyo design and innovation: groundedin traditional Arican culture butnow tailored to the tastes o modernwomen in the regions growingmiddle class.
Established in the 1850s and stillheadquartered in the Netherlands,the company originally exportedprinted batik to the Dutch East Indies,now Indonesia. In 1876 it expandedinto Arica. It now sells more than51 million yards o abric each yearto some nine countries across West,Southern and Central Arica, notto mention growing online sales tothe Arican diaspora in Europe andAmerica, and a growing range obranded accessories.
The companys brand portolioincludes Vlisco which is commonlyknown as Original Dutch Wax andconsidered the premier brand inthe West Arican niche market owomens luxury apparel. Its bold andcolourul collections set the trendsthat others ollow. Vlisco Groupbrands include the mid-range Uniwaxand GTP, which are manuacturedand sold in Cte dIvoire and Ghana,and the younger, more contemporaryWoodin brand which sells acrossthe region.
The group employs more than2,100 people o whom 1,500 arebased in West Arica. But or everyperson it employs directly, ten more
jobs are created, with business orsalesmen, shopkeepers and tailorsdriven by Vliscos products. Andin the ace o cheap imitationsand imports rom China, Vliscosproducts endure, not just becauseo their quality but because thecompanys heritage and abricarchive mean that women today
can wear the same prints as theirgrandmothers did, creating a loyaltyand aection or its designs that ishard to match.
Actis took over the Vlisco Group inSeptember 2010. As a company thatalso sits in a developed market butwhose reach is pan-Arican, we eltan ainity with the Vlisco Group,and knew we could bring Actissknowledge o consumer companiesgained rom other emerging marketsto help it meet the increasingdemand or its products.
To drive this change, we introducedCEO Hans Ouwendijk, ormerly oMexx and Laura Ashley. Our aim isto double the size o the business inthe next our years and shit it roma production ocused organisationto one with a developed sales andmarketing culture that manages allo its brands together. This ambitionincludes expanding into East Arica,growing the Woodin brand andestablishing a presence in Nigeria,which has recently lited a ban onimported textiles.
As Arica continues to emerge ontothe global stage, we want Vliscoto be an international ambassadoro Arican style, combining
contemporary attitudes with anArican heritage and continuing tocreate abrics that will be enjoyedand worn by generations to come.
Key facts:Date of investmentSeptember 2010Type of dealManagement Buy-inDeal sizeUS$151m
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Actis portfolio at work
Brazil is often referred to as thecountry of tomorrow. Since 2003,its staggering rate of growth hasseen 25 million people enter themiddle class. Their purchasingpower has led to a boom forconsumer industries. But for thosewanting to secure their prosperity,spending money today has given
way to the desire to invest andsafeguard tomorrow.
Established in 2001, XPInvestimentos (XP) has grown overthe last ten years rom a start-up tothe countrys largest independentretail brokerage with 100,000customers and 220 branches inmore than 100 Brazilian cities.Brazilians have traditionally investedin savings accounts and physicalassets like real estate but XPsmanagement team recognised earlyon in the companys developmentthat what was stopping people rominvesting in equities was their lacko inancial savvy. So they launcheda range o training courses coveringeverything rom investment basicsto advanced portolio management,giving people the know-how theyneed to participate in the world oinvesting and managing wealth.
Today, as well as being Brazilsleading independent brokerageirm, XP is also the countrys largestinancial education provider. It hastrained some 350,000 people andoers more than 350 seminarsevery month. And with manystudents going on to become loyalXP customers, its paid-or courseshave enabled the company to grow
organically at very low cost.In a market dominated by universalbanks, who limit their oering totheir own products, it has becomea trusted brand and the platorm
o choice or independent inancialadvisors, with 1,200 proessionalinvestment brokers using its state-o-the-art technology platormand support service to managetheir clients.
The potential or growth remainsimpressive. Currently only 0.3%
o Brazilians invest directly inequities. That is well below India(1.4%), China (3.1%) and tiny whencompared with the developedmarkets (average 30%). But peoplesgrowing conidence in the prevailingmacroeconomic outlook and thestability o the currency meansBrazils equity culture is pickingup pace, with the Brazilian StockExchange predicting that individualinvestor numbers will reach ivemillion within the next ive years.
At Actis, weve been in the emergingmarkets long enough to recognisesuch a growth trajectory. We investedin XP in 2010 to help the companyto expand its network and urtherbuild the technology and productdevelopment capabilities that willgrow its market share. The vision isto make XP Brazils largest inancialshopping centre able to providecustomers with access to stockexchanges, mutual unds, bonds,pensions, insurance, and a rangeo other inancial products, all in oneplace. We have paired our inancialcapital with intellectual capital,introducing Mark Collier, a ormersenior executive o Charles Schwab,to XPs board to assist it as it grows.
XP has always been a pioneer and
our goal is to work with it towardsan IPO and make it the irst publiclytraded company o its kind in Brazil.
XP Investimentos
Key facts:Date of investmentNovember 2010Type of dealExpansionDeal sizeUS$58m
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Actis portfolio at work
One Airport Square
It takes just one building toput a city on the map; to changeperceptions and expand the limitsof whats considered possible.One Airport Square, a modernoffice and retail developmentin Accra, is one of thesebreakthrough buildings. Strikingand contemporary in style, it
will be the most environmentallyfriendly office complex in Ghana,achieving qualification eitherthrough a LEED rating orGreen Star and becoming thebenchmark against which GhanasGreen Building Council grants allfuture certification.
Well-planned oices and modernretail experiences are somethingthat Ghanaians have long wanted.As the countrys emerging oilindustry and service sector havegrown, so has its middle class andwith it, a desire or better retailenvironments. Ghanas politicalstability has also made it attractiveto multinationals looking to enterWest Arica, driving up the demandor A-grade oice spaces.
But while the appetite or qualitycommercial premises has grown,there remains a chronic undersupply,caused by a lack o developmentexecution expertise, patient capitaland investment experience.
With a proven track record odelivering international standardreal estate projects in thesemarkets, we decided to addressthe development executionchallenge head on. In April 2010,
we established Laurus DevelopmentPartners, a real estate developmentmanagement company based inAccra. Led by CEO Carlo Matta,ormerly Managing Director at Hines
Europe, this development modelpairs Actis capital and our realestate investment track record withan internationally experienced localteam able to meet the executionchallenges o the West Aricanmarket. One Airport Square is theirst Actis/Laurus project but it is amodel the team will replicate across
West Arica.
Located in Accras growingcommercial district o Airport City,One Airport Square will comprise17,000 square metres o retail,oice and car parking space onceit is completed next year. Fusingtradition with pioneering greensolutions, it has been designed byaward-winning Italian architectsMCA. Its concrete and glassexterior echoes the diamondpatterned bark o Ghanas palmtrees and the decorative acadeso the mud houses customaryin the North East o the country.Speciications include naturalventilation via a central atrium,rain water recycling and concreteoverhangs to prevent over-heatingand reduce energy consumption.The loors are raised, parking isample, loor-plates are large andlexible, health and saety is o aninternational standard in short thisis a building which would hold itsown in Munich or Singapore.
The development will have an openpiazza to encourage social interactionand the hosting o small events orthe local business community. Duringconstruction, the project will employmore than 150 Ghanaian construction
workers and is sourcing more than40% o all materials locally, helpingto stimulate the regional economy.For us, One Airport Square is aprototype that we expect will
become a stereotype. It alls rightat the heart o our real estateinvestment strategy in Sub-SaharanArica and will redeine workingenvironments in this market.
Key facts:Date of investmentDecember 2010
Type of dealReal estate development
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Actis portfolio at work
Sterling Add Lie
Your health is your most preciousasset. And when things go wrong,you need the security of knowingyou can access the best possiblehealthcare. In Gujarat, thanks toSterling Add Life, people are ableto consult with leading specialistsand receive treatment in worldclass facilities.
With public healthcare in Indianotoriously overburdened andpoorly managed, the Indianhealthcare market has long beenunderserved, with key ratios such asbeds/1,000 population signiicantlybelow the emerging marketsaverage. But as the countrys middleclass has grown, rising disposableincomes have spurred more peopleto take out health insurance orpay to receive medical care andspending on healthcare in India hasgrown by almost 14% a year. Thishas accelerated demand or privatehospital chains like Sterling.
Actis invested in Sterling in 2006to uel the companys expansionacross Gujarat, one o thewealthiest, astest growing andmost industrialised states in India.The initial aim was to increasethe number o beds rom 200 to900. But by the end o 2010, ithad already exceeded this target:today it has a network o morethan 1,100 beds across six multi-speciality hospitals in the citieso Ahmedabad, Baroda, Rajkot,Bhavnagar, Mundra and Adipur,as well as two satellite centres,one each at Kalol and Mehsana.
Now the leading private hospitalgroup in Gujarat, it has set thestandard or healthcare in the region.Its hospital in Ahmedabad was theirst in Gujarat to be accredited by
the National Accreditation Boardor Hospitals and HealthcareProviders (NABH) and has beenranked Best Hospital in India bymarket research irm IMRB threeyears in a row since 2007.
And it is not just Gujaratis that useSterling. The lack o quality healthcare
in neighbouring states means patientsrom Rajasthan, Madhya Pradeshand Maharashtra travel up to eighthours to access its services whichinclude specialist consultations andsurgery or a wide variety o diseases,as well as provisions or radiology,pathology, dentistry, ophthalmology,bone marrow transplants andobesity treatments.
Actis brought in a CEO and CFOto assist Sterling as it grew insize and complexity. We engagedBain & Company to help improveeiciencies and worked with themanagement team to enhanceIT systems, inancial auditing andto ensure compliance with thehighest standards o health andsaety. Developing additionalsaeguards covering transparencyand ethics was also something weconsidered vital. These measureshave included the introduction oa clear pricing and billing procedureand establishing Sterling as one othe only private hospital chains topay all trolley porters and ward staminimum wage as well as providingthem with discounted access to allo Sterlings services.
Because Lie Matters is Sterlingsstrapline. It is a sentiment that
has resonated with Indias middleclass and a philosophy which hasdriven the creation o what isnow recognised as Indias leadingregional healthcare company.
Key facts:Date of investmentJune 2006Type of dealExpansionDeal sizeUS$46m
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Actis portfolio at work
Xiabu Xiabu
Diners at Xiabu Xiabu, Chinasmost popular hotpot restaurantchain, savour the taste of thiswarming favourite that combinestradition with the speed of fast-food. With more than 150 branchesacross Beijing and Tianjin, itscontemporary design, pristineeating environment, and modern
twist on a Chinese staple, havemade it a hit with people lookingfor an affordable, convenient meal.And it is a particular favourite ofyoung women, who prefer healthyhotpot to fried junk food.
Chinas restaurant market, worthUS$170bn in 2007, has grown at17-18% a year as people chooseto eat out more oten. But althoughthe urban Chinese have morespending power, work and amilydemands mean they have lesstime to cook, which has led to anappetite or American and Asianast ood. Xiabu has beneitedrom these trends and has expandedrapidly, rolling out restaurants inoice blocks and shopping centres.
Xiabu pioneered the individual, bar-style hotpot ormat: so rather thansharing rom a traditional communalhotpot, diners can create and enjoytheir own dish. All stock, vegetablesand meat are prepared in a centralkitchen in Beijing and transported toeach store daily, ensuring consistentood quality, hygiene and reshness.
Xiabu opened its irst branch in1998 and when Actis took over thecontrolling share in 2008 it had 60restaurants, mainly in Beijing and
Tianjin. The original goal was to triplethis number over the ollowing threeyears, but by the end o 2010, thechain included 155 outlets and hadgrown to become one o the largest
quick service restaurant chains(in terms o number o stores) inthe capital, just behind Yum! whichoperates KFC and Pizza Hut, andMcDonalds. It was also ranked asone o the top ten most amousbrands in Beijing. Our aim is nowto open 235 restaurants across Chinaby the end o 2011 and make Xiabu
not just a leading regional chain buta national ast ood brand.
Key to this has been establishingXiabus presence in Shanghai. Xiabuopened ive restaurants in the cityon the same day in September 2010achieving a PR tour de orce. Some25 more are scheduled to open inShanghai in 2011, in addition to the55 other outlets planned or Beijingand Tianjin.
As well as continuing to expandthe chain, weve also introducedand worked with the boardsQuality Assurance Director touphold international standardso health and saety. Openingin May 2011, Xiabus new centralkitchen will not just standardiseoperations and be able to servemore restaurants, but also complywith HACCP and ISO 22000guidelines, ensuring ood hygieneand the use o pesticide-reevegetables across the chain.Improving energy eiciency andreducing ood waste have alsobeen key ESG goals and progresswill be measured later this year.
Xiabu Xiabu started with thesimple concept o one person, onepot. It is a ormula thats worked
and evidently a recipe or success.
Key facts:Date of investmentNovember 2008Type of dealBuy-out capitalDeal sizeUS$50m
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26 In Review
Actis portfolio at work
Umeme
Secure and reliable power is vitalif an economy is to grow. But afterdecades of political instability,Ugandas electrical infrastructurehad become neglected to suchan extent that it was not justinefficient or badly maintainedbut unsafe, with rotten poles anddowned cables a familiar sight.
The tropical climate, encouragingrapidly growing vegetationand armies of termites to attackthe wooden electricity poles, onlycompounded the problem.
At present 7% o Ugandas 33million people have access to thegrid. Transorming the networkinto a service able to meet thecountrys development goals andaccommodate growing energyconsumption, which is increasingat 10% a year, has required a totaloverhaul. As a result o years opoor maintenance 120,000 poles,cables and related sub-stationshad allen into disrepair.
Established in 2005, Umeme is theelectricity distribution company thatis meeting this challenge under a20 year agreement. Its networko more than 20,000 km o cablesextends across Uganda with aconcentration on the semi-urbanstrip rom Entebbe through Kampalato Jinja.
When Actis took over Umemein November 2009, networkimprovement was already underwaybut Actiss involvement has boostedprogress. By the end o 2010Umeme had replaced over
90,000 poles, spent US$100mon improvements, and secureda loan rom the IFC to help undthe reurbishment programme.
Saety is at the top o Umemesagenda. The network will besubstantially upgraded by the end o2012 and weve put in place a newboard and procedures that havemade a big dierence to public,employee and contractor saety.Establishing an ESG committee andappointing a specialist to lead saety,
health and environmental activitieswas part o this and has enabledUmeme to reduce the number oaccidents and atalities associatedwith the network.
To help achieve this, Umemehas rolled out an extensive schooleducation programme and set upa 24-hour saety helpline to logequipment damage. Sub-stationshave been boxed in and Umemehas cut response times toemergency call outs in the past itcould take up to hal a day to makethe area around a allen or unstablepole sae: by the end o 2010 it wastaking less than 30 minutes.
Since Umeme began its improvementprogramme it has connected morethan 40,000 new customers annuallyand now distributes electricity tosome 405,000 Ugandans. As wellas being sae and reliable, to ueldevelopment electricity must also beaordable. By implementing a newbilling system and improving thenetworks perormance Umeme hasreduced energy losses rom 38% in2005 to 30% by 2010, which willlead in the long term to a reductionin the power sector costs.
The scale o works undertaken by
Umeme is huge but or us, it is aboutdoing business responsibly, improvingpeoples daily lives and helping acountry to achieve its ambitions.
Key facts:Date of investmentNovember 2009Type of dealAcquisitionDeal sizeUS$15m
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Regions and sectors
Actis data
So Paulo
Cairo
Lagos
London
Nairobi
Johannesburg
Business Services:
Logistics Mining, oil and gas services Outsourcing Specialist business
process outsourcing
Consumer:
Education Healthcare Home and personal care Restaurants Retail including ood
Financial Services:
Banks Consumer credit Financial services distribution Payments
Principal sectors
Mu
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Beijing
Singapore
Industrials:
Construction andbuilding equipment Construction and building materials Electrical and electric components Power
Energy:
Distribution Power generation (renewables andnon-renewables)
Transmission
Real Estate:
Hospitality Industrial Oice Residential Retail
Regions
AfricaChinaLatin AmericaSouth AsiaSouth East Asia
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32 In Review
Investments
Actis data
Investments by sector:
Value of investments by region:
This page reflects the Actisportfolio across all five regionsand all six sectors, captured on31 March 2011.
Africa
South AsiaChina
Global EM
South East Asia
Latin America
43%
29%10%
7%
6%
5%
Average deal size (private equity):
Actis Fund 1s Actis Fund 2s Actis Emerging
Markets 3
US$13m
US$25m
US$105m
Consumer
27%Industrials
14%FinancialServices
25%BusinessServices
14%Energy
9%Real Estate
3%Other
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Investors
US and Canada
43%UK and Europe
23%Asia andAustralia
21%Africa andMiddle East
13%Actis invests on behalf of investorsbased predominantly in the UK,Europe, the US and Canada withgrowing interest from investorsin Africa, the Middle East, Asiaand Australia.
Investors by region:
Investors by type:
DFI
Percentage
FamilyOices
and Private
Foundations
PublicPension
UniversityEndowments
Fund oFunds and
InvestmentManagers
Data notes:Investments: includes all current investments in Actis Emerging Markets 3,
Actis Fund 2s, Actis Arica Agribusiness Fund, Actis Inrastructure 2, Actis IndiaReal Estate Fund and Actis Arica Real Estate Fund.Average deal size: where an investment straddles two generations o unds,(e.g. Xiabu Xiabu, 7 Days Inn) we have counted the data in the later und.Investors: igures exclude CDC Group plc. CDC Group plc is the anchor investor in eacho Actiss unds and represents approximately 45% o total commitments to those unds.
InsuranceCompanies
PrivatePension
SovereignWealth
Funds
FinancialInstitutions
andCorporates
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Sector Region Investee company Description
Business South Asia Anthelio Healthcare Hospital operations outsourcingServices South Asia Integreon Proessional services outsourcing
South East Asia KS Distribution Oil and gas and marine products
South Asia LMKR Inormation management services or oil and gas industry
Arica RTT Group Supply chain and logistics services
Arica Savcio Electrical repairs and services
South Asia Veeda Clinical research organisation
Consumer China 7 Days Inn Budget hotel chain China Ambow Personalised education and training
South East Asia Asia Books Book and magazine retailer and wholesaler
China China PSE Investment Holdings Tertiary education
Latin America CSD Supermarket/retail chain
Latin America Gtex Cleaning products
South Asia Nilgiris Convenience stores
China Northpole Tent, home and garden equipment and luggage manuacturer
South Asia Sterling Add Lie Hospital owner and operator
South Asia Supermax Manuacturer and marketer o shaving blades and toiletries
Arica Vlisco Group Fashion abrics
China Xiabu Xiabu Hot Pot restaurant chain
Energy Global EM Globeleq Power generation developer and owner South Asia GVK Energy Limited Power generation
Arica Umeme Electricity distribution
Financial Arica Alexander Forbes Diversifed fnancial services
Services Arica Banque Commerciale du Rwanda Bank Arica CIB Bank
Arica DFCU Bank
Arica Diamond Bank Bank
Arica EMPH Payments processing
South Asia IDFC Inrastructure fnance
South Asia National Stock Exchange o India Stock exchange
Latin America XP Investimentos Retail broker dealer
Industrials Arica Actom Manuacturer and distributor or electrical engineering industry South Asia AVTEC Engine and transmission manuacturer
South Asia Dalmia Cement Cement plant
South Asia Dalmia Sugar Sugar mill operator / ethanol producer
Portolio companies
Actis data
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Location Investment manager Deal type Investment date
India Homer Paneri Expansion Oct, 2010
India Homer Paneri Expansion Feb, 2010
South East Asia Gary Addison Replacement May, 2010
Pakistan Homer Paneri Expansion Oct, 2007
South Arica David Cooke Buy-out Jun, 2007
South Arica Natalie Kolbe Buy-out Sept, 2005
India Homer Paneri Expansion Feb, 2007
China Jennier Jin Expansion Oct, 2008
China Tao Sun Expansion Sept, 2008
Thailand Sugandhi Matta Buy-out Mar, 2006
China Tao Sun Start-up Nov, 2009
Brazil Patrick Ledoux Expansion Sept, 2010
Brazil Beatriz Amary Expansion Oct, 2010
India Shomik Mukherjee Buy-in Oct, 2006
China Meng Ann Lim Other Sept, 2001
India Arunima Patel Expansion Jun, 2006
India Prabir Talati Replacement Feb, 2011
Sub-Saharan Arica Murray Grant Buy-in Sept, 2010
China Dong Zhong Buy-out Jul, 2008
Global EM Torbjorn Caesar Replacement Sept, 2009
Malaysia / India Sanjiv Aggarwal Expansion Dec, 2010
Uganda David Grylls Replacement Nov, 2009
South Arica Natalie Kolbe Buy-out Jul, 2007
Rwanda Chris Benson Other Dec, 2004
Egypt Hossam Abou Moussa Replacement Jul, 2009
Uganda Sarah Mathies Replacement Jan, 2003
Nigeria Ngozi Edozien Expansion Apr, 2007
Mauritius Hossam Abou Moussa Buy-out Feb, 2010
India Nagarajan Srinivasan Expansion Aug, 2010
India Nagarajan Srinivasan Expansion Apr, 2007
Brazil Denis Pedreira Expansion Nov, 2010
South Arica Jonathan Matthews Buy-out Aug, 2008
India Prabir Talati Replacement Jun, 2005
India Asanka Rodrigo Expansion Mar, 2006
India Asanka Rodrigo Expansion Mar, 2006
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This shows all Actis portfolio companies, at 31 March 2011. Individual InvestmentManagers are predominantly based in the region where the investment is located.These individuals are supported by the relevant sector team.
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Sector Region Investee company Description
Industrials South Asia Halonix Halogen bulb and lamp manuacturercontinued China Inpac Packaging provider
South East Asia MFE Aluminium ormwork designer
Arica Mouka Foam products manuacturer
Arica Peters Papers Paper merchant
Arica Poulina Branded ood and building products
South Asia Sandhar Supplier o automotive components
Arica Sinai Marble Commercial marble exporter
South Asia Swaraj Mazda Light commercial vehicle manuacturer
South East Asia Teknicast Aluminium die casting
South Asia TEMA Manuacturer o heat exchangers
Other South East Asia APEC Oil and gas explorationArica Banro Gold exploration and development
Arica Candax Oil and gas exploration
Arica Copperbelt Minerals Mining and resources
Arica Grain Bulk Handlers Grain acility
Arica Kilombero Valley Teak Co Teak plantation establishment
Arica Mineral Deposits Mineral sands and gold mining
Arica Platmin Mining and resources
Arica Seven Energy Oil and gas production
Arica Tanzania Tea Packers Tea production
Arica Teranga Gold mining
South Asia TRIL Roads Private Limited Toll road developer
Real Estate Arica Accra Mall Retail and leisure development
Arica Capital Properties Commercial ofce development
Arica Ikeja City Mall Retail and leisure development
Arica IOREC Real estate development manager
Arica Laurus Development Partners Limited Real estate development manager
Arica Nairobi Business Park Commercial development
Arica One Airport Square Commercial development
South Asia Vaishnavi Mixed use development
Portolio companies
Actis data
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Location Investment manager Deal type Investment date
India Shomik Mukherjee Buy-in Jun, 2006
China Meng Ann Lim Expansion Apr, 2007
Malaysia / India Ching Lee Buy-out Jul, 2007
Nigeria Ngozi Edozien Replacement Jun, 2007
South Arica Jonathan Matthews Buy-out Feb, 2005
Tunisia Meriem Smida Other Aug, 2008
India Prabir Talati Expansion Dec, 2005
Egypt Hossam Abou Moussa Expansion May, 2007
India Madhusudan Sharma Replacement Dec, 2003
Malaysia Gary Addison Buy-out Aug, 2008
India Viraj Mahadevia Expansion Apr, 2005
South East Asia Lionel Soh Start-up Oct, 2007
DRC Murray Grant Expansion Oct, 2005
Tunisia Murray Grant Expansion Apr, 2005
DRC Murray Grant Expansion Jul, 2008
Kenya Michael Turner Replacement Jan, 2007
Tanzania Michael Turner Start-up Jan, 2001
Senegal Murray Grant Expansion Nov, 2004
South Arica Murray Grant Expansion Oct, 2003
Nigeria Ngozi Edozien Expansion Feb, 2007
Tanzania Michael Turner Expansion Oct, 2001
Senegal Murray Grant Expansion Dec, 2004
India Sanjiv Aggarwal Expansion May, 2010
Ghana Louis Deppe Real estate development Nov, 2006
Tanzania Louis Deppe Real estate development Nov, 2006
Nigeria Louis Deppe Real estate development Apr, 2008
Mauritius Kevin Teeroovengadum Start-up Jan, 2009
Mauritius David Morley Start-up Apr 2010
Kenya Koome Gikunda Real estate development Nov, 2006
Ghana Amanda Jean-Baptiste Real estate development Dec, 2010
India Parvesh Gupta Real estate development Jun, 2008
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Team
Actis data
01 Gary Addison, Partner; Head, Business Services
02 Benson Adenuga, Director, Financial Services
03 Sanjiv Aggarwal, Partner, Energy
04 Beatriz Amary, Director, Consumer
05 Lou Baran, Head, HR
06 Ron Bell, Head, Operations
07 Jonathon Bond, Partner; Head, Investor Development*
08 Torbjorn Caesar, Partner; Co-head, Energy*
09 Mahesh Chhabria, Partner, Industrials
10 Chris Coles, Partner, Financial Services*
11 David Cooke, Director, Consumer
12 Louis Deppe, Director, Real Estate
13 Ngozi Edozien, Director, West Arica
14 Michael Chudi Ejekam, Director, Real Estate15 Sherif Elkholy, Director, Consumer
16 Steven Enderby, Partner, Industrials
17 Paul Fletcher, Senior Partner*
18 Mark Goldsmith, Director, ESG
19 Murray Grant, Partner, Arica
20 David Grylls, Director, Energy
21 Simon Harford, Partner, Financial Services
22 Lucy Heintz, Director, Energy
23 Adiba Ighodaro, Director, Investor Development
24 Amanda Jean-Baptiste, Director, Real Estate
25 Jennifer Jin, Director, Industrials
26 Natalie Kolbe, Director, Consumer
27 Chu Kong, Partner, Latin America
28 Ritu Kumar, Senior Advisor, ESG
29 Tashi Lassalle, Head, Communications
30 Patrick Ledoux, Partner, Latin America
31 Meng Ann Lim, Partner; Head, China & SE Asia*32 Tanya Lobel, Director, Actis Acts
33 Nick Luckock, Director, Financial Services
34 Alistair Mackintosh, Partner, Chie Investment Ofcer*
1 53 74 82 6 9
1311 1512 1610 14 17
2119 2320 24
18
22 25
30
27
322928 33
26
31 34
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35 Alasdair Maclay, Director, Investor Development
36 Sarah Mathies, Director, Financial Services
37 Jonathan Matthews, Director, Industrials
38 Robert McGregor, Partner, Energy
39 David Morley, Partner; Head, Real Estate*
40 Hossam Abou Moussa, Director, Financial Services
41 Shomik Mukherjee, Partner, Consumer
42 Marc Nahum, Director, Investor Development
43 Peter Olds, Director, Legal
44 Angus Or, Director, Operations, Asia
45 Paul Owers, Partner; General Counsel
46 Homer Paneri, Director, Business Services
47 Denis Pedreira, Director, Financial Services
48 Rick Phillips, Partner; Head, Consumer49 Gautham Radhakrishnan, Director, Business Services
50 G Rathinam, Partner, Industrials
51 Mark Richards, Partner; Head, Financial Services
52 Asanka Rodrigo, Director, Industrials
53 Fash Sawyerr, Director, Business & Strategy
54 Peter Schmid, Partner; Head, Arica & Latin America*
55 Lionel Soh, Director, Industrials
56 Srinivasan Srini Nagarajan, Director, Financial Services
57 Tao Sun, Partner, Consumer
58 Prabir Talati, Director, Consumer
59 Kevin Teeroovengadum, Director, Real Estate
60 Michael Till, Partner; Co-head, Energy*
61 JM Trivedi, Partner; Head, South Asia*
62 Michael Turner, Director, East Arica
63 John van Wyk, Partner; Head, Industrials
64 Jiansheng Wang, Partner, Financial Services
65 Dong Zhong, Partner, Consumer
*denotes Executive Committee member
3836 4037 4135 39 42
4644 4845 49
43
47 50
54
52
5653 57
51
55 58
62
60
64
61
65
59
63
This page shows investment professionals, from Director level andabove alongside their main specialism, as well as key members of thefirms global support services platform. The Actis Executive Committeemembers are starred: the committee meets monthly.
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Actis invests exclusively in the emerging markets.
With a growing portolio o investments in Asia, Aricaand Latin America; we currently have US$4.6bn undsunder management.
Our work at Actis is driven by the conviction that webring more than capital to our investments; we bringbeneits to our investee companies, investors andbroader society. We call this ethos the positive powero capital.
Combining the expertise o over 100 investmentproessionals on the ground in nine countries, weare proud to actively and positively grow the valueo those companies in which we invest.www.act.is
Actis is a signatory to the United Nations Principles orResponsible Investment (UNPRI). An investor initiative inpartnership with UNEP FI and the UN Global Compact.www.unpri.org
This annual review orms the basis o Actiss compliancewith the Walker Guidelines or Disclosure andTransparency in Private Equity. Actis has reported on acomply or explain basis as detailed by the guidelines.walker-gmg.co.uk
Actis LLP is a Limited Liability Partnership registered in England andWales (registered number OC305927). A list o the members o Actis
LLP is open to inspection at its registered oice, 2 More LondonRiverside, London SE1 2JT, England. Actis LLP is regulated by the
Financial Services Authority.
Copyright 2011 Actis LLP. All rights reserved. Reproduction withoutpermission is prohibited. Trademarks and logos are copyrights o their
respective owners.
AfricaCairo+202 2792 9220Johannesburg+27 11 778 5900Lagos+234 1 448 5700Nairobi+254 20 2219 952
China
Beijing+86 10 6535 4800
Latin AmericaSo Paulo+55 11 3844 6300
South AsiaDelhi Operations+91 11 6615 7200Mumbai+91 22 6146 7900
South East AsiaSingapore+65 6416 6400
United KingdomLondon+44 20 7234 5000
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