非洲的高增长使它Private Equity Target

After years of skepticism and downright cynicism, Africa is increasingly gaining credence among mainstream investors as an investment destination. One financing mechanism that is gaining particular ground is private equity. According to numbers from London-based financial data firm Preqin, private equity funds targeting the continent attracted $2.4 billion last year, nearly double the total in 2012. Among the most recent signs of foreign investors’ growing interest in the continent is Geneva-headquartered private bank Edmond de Rothschild’s June announcement that it had put $530 million into its first African private equity fund.

“African private equity has definitely developed over the last decade, in terms of both scale and quality of transactions,” says Maty Ndiaye, director at London-headquartered Duet Africa and Duet Group, a $5 billion alternative-asset management firm. “It has been attracting significant interest from both foreign and local investors who want to be part of the African growth story. There is a clear understanding that there are higher returns in this space if transactions are executed well.”

And what a growth story it is. Africa is home to six of the world’s fastest-growing economies between 2001 and 2010. Numbers from the International Monetary Fund suggest that Africa is on track to claim seven of the top ten for 2011–’15, including Ethiopia, which has an annual average rise in gross domestic product of 8.1 percent. When it comes to private equity, this pays dividends. Data from Washington-based industry group Emerging Markets Private Equity Association suggest that private equity entries, or purchases, in Africa are made at lower multiples of earnings before interest, taxes, depreciation and amortization than the global average. For enterprise values (the market value of the entire business) of less than $25 million, for example, the global average is around six times ebitda, but only about five for Africa. Private equity investors say this partly reflects the lack of bidding wars through private equity auctions.

Investors say that two of the most promising sectors are consumer and infrastructure services. Consumption is growing particularly rapidly — in many of the region’s countries, outpacing GDP growth — as Africa urbanizes and becomes wealthier. Many Africans, for the first time, are turning to companies and buying many goods and services, rather than growing or making items themselves, shopping in informal markets or doing without. Infrastructure services, such as trucking and the provision of mobile phone masts, are a growth area, as African consumers’ demands become less local and more wide-ranging.

The most attractive companies are those with exposure to promising sectors in high-growth countries. In 2012 Duet invested $90 million in a majority stake in one such company: Dashen Brewery, based in Gondar, Ethiopia. “We were attracted to the deal because of the sector’s strong growth prospects,” says Ndiaye. “Ethiopia’s beverages sector has grown significantly in recent years, and we expect it to continue to blossom.” The funding is being used to expand Dashen’s capacity and improve its distribution channels.

“The real gap in infrastructure in many economies is one of the biggest challenges for private equity investors,” says Mark Jennings, Johannesburg-based investment principal in the private equity unit of $123 billionInvestec Asset Management. The development of road networks and ports will enhance the ability of companies that Investec invests in to operate, he explains. Furthermore, Jennings adds, the infrastructure gap “is also an opportunity.” In partnership with Washington-based private equity firm Carlyle Group, Investec has invested in J&J Africa, a logistics company that serves southern Africa from its headquarters in Beira, the second-largest city in Mozambique.

The relative difficulty of exiting African private equity investments remains an obstacle because, as with listed African markets, there is a small pool of willing buyers. Specialist investors say, however, that this is less of an obstacle than before. They point to 2014 research from consulting firm Ernst & Young for the African Private Equity and Venture Capital Association, which showed that investors had already sold out of 129 of 207 investments made on the continent between 2007 and 2013.

Those involved in the African market acknowledge that exits sometimes take longer than in other regions. This isn’t necessarily a negative, however. “Exits are not necessarily harder, but they perhaps have a longer gestation period,” says Nina Triantis, London-based global head of telecoms and media atSouth Africa’s Standard Bank. “In Africa, private equity sponsors sometimes enter a company at quite an early stage of the company’s development. They need to corporatize the company, including getting involved with its governance,” such as setting up boards. As a result, she adds, “it’s less common that an exit will be realized within a typical private equity time frame.” She estimates that most exits are likely to take four to seven years, rather than the three- to five-year range typical in more developed markets. Investec’s Jennings notes that since the private-equity-targeted African businesses are generally in high-growth markets, a couple more of years of investment can pay attractive financial dividends.

These comments underline an important distinction between African private equity and practices common in developed markets. Investors say there is no need for financial engineering to increase returns in Africa, unlike in Europe and the U.S., where firms customarily take on debt to bolster their profits. African returns derive instead, they say, from the inherent growth potential of underlying companies and of the rapidly expanding market they serve.

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