Sat, Apr 29, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Africa needs flexible capital as well as patient capital

Wednesday, October 26, 2011

By Kayode Akindele, Funsho Allu and Fred Binka: partners of 46 Parallels LLP, an investment management business based in London and Lagos.

The current focus on supplying finance to the microfinance/SME sector is admirable, but orphans a swathe of important companies across Sub Saharan Africa (SSA). These African enterprises, termed “graduating SMEs”, have outgrown the SME lenders(loans up to $5m) but have financing needs below $20m. At these quanta, their requirements exceed the scope of SME loans but are too small to be on the radar of larger local/international banks and African Private Equity funds. They tend to settle for expensive local debt facilities. These businesses are in need of flexible growth capital on their terms.

Equity Capital: Graduating SMEs have a significant role to play in driving employment and growth in the region. They would benefit from 10 year “patient capital” from Private Equity, as it often comes with operational support toformalise financial accounting, improve corporate governance and give access to global partners who help develop businesses. African private equity firms have recently raised sizeable capital to invest in the continent, with a number of marquee transactions. But as the private equity funds have gotten bigger their average transaction size has increased, leaving the ‘graduating SMEs’ behind.

Debt Capital: With recent interest rate lifts of 300bps in Nigeria, 400bps in Uganda and an unprecedented 400 bps in Kenya, SS......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Ex-Man manager combines sustainable investing with AI/ML[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Dr. Richard Bateson, quant fund manager and physicist, has recently

  2. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  3. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V

  4. Gondor Capital sees challenges ahead for financial markets as two hedge funds post strong gains in Q1[more]

    Komfie Manalo, Opalesque Asia: Vincent Au, portfolio manager of New York-based hedge fund firm Gondor Capital Management believes that the remaining of the year would be challenging for the financial markets even as his two hedge funds maintain

  5. Service Providers - Colemore launches fee tracking service for limited partners[more]

    Following Colmore's successful launch in January 2017, the firm has announced the launch of FAIR.. FAIR is designed to help private equity investors independently validate fees and incentives charged by underlying managers, saving time and providing an extra level of comfort. There is a glob