Significant developments in private equity interest in Nigeria and Kenya
Private equity is a vital facet of sustainable development – serving as a mechanism to allow businesses to establish themselves, and to expand. Private equity funds enhance that effect through collective investment, in areas related to private equity: venture or growth capital, distressed investments, leverage buyouts, or mezzanine capital. African countries continue to experience significant economic growth, and seek to encourage investment in order to sustain that high level of growth.
Economic powerhouses of West and East Africa, Nigeria and Kenya respectively, have recently attracted the attention of a significant private equity fund. One Thousand & One Voices LLC, is an Africa-focused private-equity fund that has announced its interest in Nigeria and Kenya based companies. Specifically, One Thousand & One Voices is focussing on three companies, two in Nigeria, and one in Kenya.
According to Hendrik Jordaan, the president and CEO of the fund: “one is a purely consumer-facing opportunity, the other is also in the manufacturing space with a consumer theme to it.” Started by John Coors, the great grandson of Coors Brewing Co.’s founder, One Thousand & One Voices boasts substantial support, in the form of investments by more than 15 of the world’s richest families since starting in early 2013.
Africa-focused private-equity fund
As a result, the fund expects to meet a goal of raising US$300 million by December 2014. Jordaan has expressed confidence in the financial capabilities of the fund: “We have sufficient capital from over 15 families that allows us to close on all the transactions in our pipeline,” adding that the fund is also in talks with potential investors based in Latin America, Southeast Asia, and Africa.
Although Jordaan has declined to provide details, the fund is in talks with certain wealthy Nigerian families. Notably, One Thousand & One Voices is likely, according to Jordaan, to lead a delegation of families to the World Economic Forum’s conference in Nigeria’s capital, Abuja in May 2014. The significant investing power of such a fund is highly promising for sustainable economic development on the continent.
It’s likely that other private equity funds will follow the lead of One Thousand & One Voices into sub-Saharan Africa, and Kenya and Nigeria especially. Another significant impetus likely to aid in spurring greater private equity ventures in sub-Saharan Africa is likely to be achieved by the African Private Equity and Venture Capital Association (AVCA).
Investment for sustainable economic development
The 11th Annual AVCA Conference is, perhaps fittingly, to be held on 1st-2nd April 2014 in Lagos, Nigeria. The theme of this year’s conference is to be: “Private Capital: A catalyst for change.” The AVCA Annual Conference is the association’s flagship event, providing a platform for the private equity and venture capital industry in Africa to discuss opportunities and issues facing the industry.
Early iterations of the conference began in 2003 in Cameroon, and AVCA has subsequently held conferences in Morocco, Kenya, Senegal, Botswana, Egypt, Ghana and, most recently, South Africa. The conference has grown considerably in that time period, and can boast a global audience and substantial industry influence. The 2013 AVCA Conference was sold out, attracting over 400 delegates.
AVCA’s conferences have been intentionally held across the various regions in Africa in order to expose attendees to new prospective investment markets. Moreover, the conference attracts numerous sponsors, including KPMG, further enhancing the opportunities for engagement between investors and clients.
Private equity ventures in sub-Saharan Africa
Conferences are geared towards providing superior networking opportunities, and guarantee attendance by senior general partners and limited partners to support that goal of providing a networking platform. In addition, the conferences present topical content through a collection of high quality speakers. Speakers at the 2014 AVCA Conference are set to include global leaders and experts in the private equity and venture capital industry, with a particular focus on Africa.
Speakers for the 2014 AVCA conference include:
- Vicki Fuller – New York State Common Retirement Fund
- Stewart Paperin – Soros Economic Development Fund
- Michael Power – Investec Asset Management
Some of the key agenda topics that will be covered at the conference include:
- Mind the Gap: Financing Small & Medium-sized African Businesses
- Sector Perspectives: Beyond the Low Hanging Fruit
- Global LP Perspectives on Africa
- Growing the LP Base: Tapping the Commercial Capital Spectrum
Private Capital: a catalyst for change
In summary, private equity is a critical source of financing for companies in emerging market economies, such as in Africa. Private equity funds greatly improve access to funding for small and medium scale enterprises (SMEs), and as such, offer an important means of stimulating economic growth and sustainability.
Attracting the attention of powerful private equity funds, like One Thousand & One Voices, is a significant coup for Nigeria and Kenya. The 2014 AVCA Conference will provide a venue where other private equity industry actors might be engaged in hopes of similarly attracting investment interest.
For more information: Taofik Salako, ‘Private equity fund eyes Nigeria, Kenya‘, The Nation (Nigeria), 23 March 2014. Available at: http://thenationonlineng.net/new/private-equity-fund-eyes-nigeria-kenya/