IAD Growth & Investment panel
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Transcript of IAD Growth & Investment panel
Growth and Investment Panel:Funding options
PanellistsEng Baxton Sirewu, Acting Director General, POTRAZ, Zimbabwe
Sunil Joshi, MD & CEO, Neotel (Pty) Limited, South AfricaRobert Schumann, Principle, Analysis Mason, South Africa
ModeratorAlon Avnon, Managing Director, BizDevOS
IAD Summit, Victoria Falls, April 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 32South Africa 41Ghana 67Zambia 83Russia 92China 96Brazil 116Ethiopia 125Kenya 129Uganda 132India 134Mozambique 139Tanzania 145Nigeria 147Côte d'Ivoire 167Cameroon 168Senegal 178Angola 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 longerSource: 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
Yes!!! Investors are very picky…
But,Africa’s risk adjusted multipliers
are sensible
Investors deserve the credit for….
Picking the right space and the right location