Kenya: Nairobi Hosts PE Investors Collectively Managing Over U.S.$1.5 Trillion in Assets

AVCA plays an important role as a champion and effective change agent for the industry, educating, equipping and connecting members and stakeholders with independent industry research, best practice training programmes and exceptional networking opportunities.

Nairobi is hosting the African Private Equity and Venture Capital Association's (AVCA) 16th Annual Conference with top 400 private equity leaders in attendance as they discuss the most critical topics shaping the investment landscape in 2019.

With the role of private equity on African development on the rise, delegates are looking at various opportunities that have presented themselves in investing in Africa and evaluating how fund managers, venture capitalists and angel investors can tap in to the continent's growing influence.

Africa Development Bank estimates that Africa's economic growth will accelerate from an estimated 3.5 percentage growth in 2018, to reach an estimated 4 percent in 2019 and reach 4.1 percent in 2020, which in turn will offer remarkable rewards for both public and private investors. However, the greatest achievers are expected to be the private investors.

The landmark event is sponsored by leading investors and industry players across different geographies including Adenia Partners, AFIG Funds, African Development Bank, AfricInvest, Alitheia Identity, Amethis Finance, Catalyst Principal Partners, CDC Group, Centum Investment Company, Clifford Chance, Debevoise & Plimpton, DLA Piper, Development Partners International, eFront, European Investment Bank, Flourish Ventures, FMO, MMC Africa Law, Old Mutual Alternative Investments, Proparco, Software Technologies, The New Practice, TLcom Capital, and Verod Capital Management.

The African Private Equity and Venture Capital Association is the pan-African industry body which promotes and enables private investment in Africa.

AVCA plays an important role as a champion and effective change agent for the industry, educating, equipping and connecting members and stakeholders with independent industry research, best practice training programmes and exceptional networking opportunities.

Exploring the role of Private Equity in Africa's infrastructural projects

With a global and growing member base, AVCA members span private equity and venture capital firms, institutional investors, foundations and endowments, pension funds, international development finance institutions, professional service firms, academia, and other associations.

American institutional investors including executives from the New York State Insurance Fund, Teachers' Retirement System of the State of Illinois and the Board of Education Retirement System of the City of New York also discussed their perspective on opportunities in Africa.

Papa Madiaw Ndiaye, Chief Executive Officer & Founding Partner, AFIG Funds notes, "African private equity can generate significant returns and diversify portfolios, while bringing about the kind of positive impact our members want to see."

Discussing venture capital,Maurizio Caio, Founder & Managing Partner, TLCom commented: "Africa's venture capital ecosystem is in full swing and the future looks bright for the continent's next unicorns." Speakers from leading DFIs including, BIO, CDC group, DEG/KfW, FinDev Canada, FMO, OPIC, Proparco and the EIB reiterated their commitment to the continent while Samia Tnani, Head of Credit, AfricInvest shed light on private credit, noting that it constitutes a promising asset class that has the potential to transform the SME segment.

Kenya ranked third best in sub-Saharan Africa according to the World Bank in 2018 and it accounts for the region's largest share of private equity investments. The country is ranked the second most attractive country by private investors surveyed by AVCA and its status as one of Africa's main tech hubs means it is the ideal location to hold this year's conference.

However, with growing appetite for private investments in Africa, the conference is deliberating how these investments can be managed vis a vis various challenges faced in Africa. These include volatility of money markets, lack of clear investment policies in some countries, unconsolidated markets as well as low instances of exits.

Matthew Hunt, Principal at South Suez Capital with a purely Sub Saharan Africa investment focus, says currency fluctuation is the biggest issue for Managers with an Africa focus. This is also supported by Eric Idiahi, the co-founder of Verod Capital Management, who have spent considerable time in West Africa which is prone to currency fluctuations.

Idiahi says, " As a firm over the last 24 months every investment we've made has been hedged against a currency risk". However, there are also stable currencies with Kenyan Shilling remaining stable against global currencies mainly US dollar.

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