Retrospection & Prospection: Transforming Africa through Private Capital, AVCA’s Annual Conference returns to Cairo

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L-R: Peter Maila, Co-Chief Investment Officer, FMO; Okey Enelamah, Chairman & Co-Founder, African Capital Alliance (ACA); Runa Alam, Co-Founder & Chief Executive Officer, Development Partners International (DPI); Clarisa De Franco, Managing Director & Head of Private Equity Funds, British International Investment (moderator); Skander Oueslati, Deputy Managing Director, Partner & Chief Investment Officer, AfricInvest
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Egyptian dignitaries, global capital allocators, fund managers, and entrepreneurs driving impact through private capital opened the African Private Capital Association’s (AVCA) 19th annual conference yesterday. The conference convened more than 600 key private capital allocators and deployers in Cairo from over 50 countries around the world, to exchange knowledge and unlock opportunities to transform Africa’s development.

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Eng. Ahmed Samir, Minister of Trade and Industry, on behalf of Dr. Mostafa Madbouly, Prime Minister, inaugurated the conference’s return to Egypt after 14 years which kicked off AVCA’s week of discussions, networking and professional development. The Minister commended AVCA for its longstanding role as a facilitator of private investment in Africa, saying, “The conference aims to attract more economic activities to the African continent and achieve aspirations for development and growth in economies with immense opportunities.”

He continued by outlining the reforms Egypt has implemented to achieve economic growth, highlighting green hydrogen projects, electric vehicles, renewable energy, seawater desalination, and other areas being opened up for private investment. Eng. Samir said, “The Egyptian government is working to support investment in various fields and continues to strengthen cooperation with African countries, whether at the bilateral or regional level.”

Introducing the theme for this year’s conference, Retrospection & Prospection: Transforming Africa through Private CapitalAbi Mustapha-Maduakor, Chief Executive Officer, AVCA, said, “Our vision is bigger and bolder, and we are more determined to help build innovative, inclusive and sustainable economies in Africa. Gathering here this week allows us to strategise and make AVCA’s vision a reality.”

The fire-side chat, 60 Seconds with U.S Capital Allocators, including Joseph Boateng, Chief Investment Officer, Casey Family Programs and Nadine Mentor Williams, Senior Managing Director, MiDA Advisors, discussed how value creation is achieved by establishing a presence on the ground. The presence of Prosper Africa reinforced the views traded in the panel. Prosper Africa, The U.S. Government initiative to increase two-way trade and investment between the USA and African countries led a high-level U.S. institutional investor delegation to Cairo and attended AVCA’s conference.

The conference progressed with a panel on Unlocking Opportunities for Private Capital in Africa: Navigating Global Uncertainty. Speakers reflected on how the private investment landscape globally and in Africa reacted to 2022: a year of unprecedented global uncertainty with rising inflation and cost of living, supply chain disruptions and a global macroeconomic downturn.

During the session, panellists, including Okey Enelamah, Chairman & Co-Founder, African Capital Alliance (ACA), shared approaches to maintaining a competitive portfolio amidst a threatening global recession. Skander Oueslati, Deputy Managing Director, Partner & Chief Investment Officer, AfricInvest, expressed that building a comprehensive pipeline of opportunities was as important as understanding how to support companies through challenges and negotiations.

Emphasising that throughout the past 25 years, private investors in Africa have withstood more challenging macroeconomic cycles than faced in recent years, Runa Alam, Co-Founder & Chief Executive Officer, Development Partners International (DPI), cited the imperative of solutions that help digitise companies, capitalise on a new era of population growth and the energy transition, and respond to challenges posed by foreign exchange volatility.

Insisting that every crisis presents opportunities through introspection, Runa Alam urged delegates to plan exit strategies from day one. She continued by saying, “We need to be hands-on investors that build teams with expertise and reflect on our capabilities as requirements evolve over time.” She prompted GPs to ask themselves “whether your skill set matches your strategy and whether it will make sustainable returns and deliver development.

These perspectives were followed by the panel, Exploring the Timeless Treasures and Investment Opportunities in North Africa, wherepanellists including Luc Rigouzzo, Co-Founder and Managing Partner, Amethis, acknowledged how North Africa’s private capital landscape has evolved. With over US$12bn worth of private capital deals being executed in the last two decades, panellists lauded the resilience of local investors with deep expertise and presence on the ground. Speakers also examined the role governments play in preparing the ground for investment, citing countries whose Sovereign Wealth Funds catalyse private investment.

Isabelle Bébéar, Director, Head of International & European Affairs, Bpifrance, made a case for French companies developing relations with North African companies, and despite stating that Development Finance Institutions (DFIs) also create new conditions to invest and professionalise the marketplace, she added that “DFIs could do more to encourage local market investments.”

Commenting that investors want the assurance that domestic investors are participating in the local environment, Hany Assaad, Co-Founder and Chief Portfolio and Risk Officer, Avanz Capital, noted, “This is a strong indicator of the quality of investments on the ground. Therefore, we must focus on attracting more domestic investors to invest in our local markets.”

During the LPs at the Core of Private Capital in Africa session, speakers including Nicholas Vickery, Global Head, Private Equity Funds, International Finance Corporation and Jeremie Ceyrac, Global Head Private Equity, Proparco, exchanged views on ways to diversify capital generation sources for Africa’s private capital funds and pathways that lead commercial capital to alternative asset classes on the continent. Fellow panellist Catherine Cax, Managing Director, Investments, Soros Economic Development Fund, Open Society Foundations, said that a robust secondary market can help to crowd in more capital as can funds with smaller ticket sizes, commenting, “US$25mn fund or ticket sizes can return capital to investors and create impact, we should not be singularly focused on the larger ticket sizes.”

Panellists, including Samuel Akyianu, Chief of Party, Mastercard Foundation Africa Growth Fund; Fatoumata Ba, Founder and Executive Chair, Janngo Capital; and Amine Allam, Managing Director, Admaius Capital Partners, outlined the significant investment potential in frontier markets in Africa. Theyexpressed that reducing exposure to the currency volatility in powerhouse economies such as Nigeria, South Africa, Egypt, and Kenya could realise the potential of other promising markets by generating higher long-term returns, once fully developed. Jacop B. Rentschler, Co-Founder & Managing Partner, Zoscales Partners said, “There’s an opportunity to invest in new champions of their industries – many can be drivers of growth.”

Nadia Kouassi Coulibaly, Head of Research, AVCA, unpacked findings from Africa’s climate policy and green financing landscape as an introduction to AVCA’s upcoming report with the Tony Blair Institute for Global Change.

The penultimate panel, Transitioning to a Green Economy, underscored the partnerships that will advance Africa’s green agenda. Stating that the global transition will be a multi-trillion dollar effort, Tariye Gbadegesin, Managing Director & Chief Executive Officer ARM-Harith Infrastructure Investment, argued that it must involve all the people at the funding table to achieve ambitious targets. Chinua Azubike, Chief Executive Officer, InfraCredit, echoed this sentiment, saying, “We need to see more coordination and collaboration to share risk and back existing innovative solutions that can scale, rather than reinventing the wheel. We are running out of time.”

The session, Creating Value for Successful Exits, closed on the first day of the conference, where Stephane Bacquaert, Managing Partner, Adenia Partners; Chumani Kula, Co-Head: Old Mutual Private Equity, Old Mutual Alternative Investments; Mezuo Nwuneli, Managing Partner, Sahel Capital; and Aliya Shariff, Managing Director, Rohatyn Group discussed when and how exits should be conceptualised in the lifecycle of a fund, particularly in the current environment. Panellists unanimously agreed on the importance of clarity on what is achievable and how best to bring it to fruition – concluding on the merit of a well-defined exit strategy from the outset of an investment.

The clarity they sought was apparent throughout the day – an interest uniting Africa’s private capital players committed to transforming its economy and making the improvements necessary to realise its potential.

The conference continues today with panels on pertinent issues which are a priority for Africa-focused investors, including Diversity, Equality & Inclusion in Private Capital, featuring Nieros Oyegun Soerensen, Partner and Chief Operating Officer, Verod Capital Management Vymala, Thuron, Deputy Chief of Party, Mastercard Foundation Africa Growth Fund and Sarah Ngamau, Managing Director, Kuramo Capital ManagementLeveraging Private Credit to Support Growth in Africa, featuring Hani Ibrahim, Chief Investment Officer, Lendable and Orli Arav Managing Director, Lion’s Head Global Partners.

Throughout the day, delegates will curate their AVCA conference experience by joining thematic streams covering healthcare, renewable energy, food security, and Africa’s flourishing creative economy. The conference will close with the panel, Straight From the Source: LP Perspectives on Private Capital in Africa, where Abdalla Elebiary, Chief Investment Officer, The Sovereign Fund of Egypt (TSFE) and Richard Okello, Co-Founder & Partner, Sango Capital, will share their insights.

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