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Exploring the African Investment Landscape

by Jon White March 24, 2014

​Here at Freshminds we love to keep at the forefront of new trends, so with this in mind I headed along to a seminar discussing the great and good of Africa's investment world, hosted by Private Equity Africa Magazine.

The discussion highlighted a couple of movements that we have seen lately in the Investment & Advisory space. One of which has been the growing trend of candidates with excellent advisory/investment/banking & strategy consultancy backgrounds who after about 5-7 years in a large blue chip are now looking for a real change of pace. As a result they are turning to the emerging markets, in particular Africa, which have become a real hotbed of interest.

This interest, as highlighted in Private Equity Africa's publication, has no doubt been in part due to the increased levels of investment activity in the continent over the last year. In fact, overall disclosed investment rose from $1bn in 2012 to $4bn in 2013. This, although still a long way away from 2007's $7.2bn, is shedding a very positive light on the African market as a place of renewed opportunity for the investment world.

Candidates are seeing the emerging markets as a place where they can, in a very positive way, have their cake and eat it. It gives them a chance to combine a range of different career and life goals in their day-to-day work life. They can continue to work in a profit making/returns focussed business whilst simultaneously having a positive developmental impact on a social level. Other markets simply cannot provide this involvement in such an exciting entrepreneurial frontier spirit.

This mentality has been evinced by a number of individuals that I have met over the last year at Freshminds; we've had ex Bain consultants setting up biomass fuel plants in Uganda, ex PwC Managers performing seed investment in Tanzanian agriculture (no pun intended), major LBO Investment Managers starting VC firms from scratch in Port Harcourt... and the list goes on!

This enthusiasm for the African market has in part been fuelled by the major successes experienced by a few smaller companies that have recently gone from strength to strength. The poster child of this revitalised PE market has to be Celtel, now Airtel Africa, which was successfully exited at a value of $3.6bn by ECP Partners last year.

There has been a similar rise in  mobile payment platforms across the continent, spearheaded by M-PESA and newer leaders in micro finance and insurance like Bima. These new and astronomically fast growing businesses really prove that the introduction of new investment vehicles in Africa can plug the low level ($250k - $2mn) investment gap. This will hopefully create an increasingly fertile market for capital investment in a continent that has been traditionally plagued by high levels of risk, a complicated regulatory environment, and political instability.

If you are approaching a crossroads in your consultancy or financial career and have an interest in the type of impact investment that is spreading across the African investment landscape then give us a call or drop us an email!

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