Wed, Aug 20, 2014
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. Institutions – Texas Employees sets 2015 tactical plan for alternatives, CalPERS' real estate consultant cautions the pension fund's investment committee, Why Sunsuper likes hedge funds[more]

    Texas Employees sets 2015 tactical plan for alternatives From PIOnline.com: Texas Employees Retirement System will invest in up to four new hedge funds in the next fiscal year, which begins Sept. 1. Trustees approved 2015 tactical investment plans for the hedge fund, private equity and in

  2. Private equity follows hedge funds into reinsurance for long-term capital[more]

    From Artemis.bm: It’s not just hedge funds that are entering the insurance and reinsurance market in search of so-called long-term capital to put to work in their strategies, private equity firms targeting the space are also seeking opportunities to add assets under management. The entry of large pr

  3. North America – New York City’s next hot neighborhoods targeted with property funds[more]

    From Bloomberg.com: New York’s real estate world is filled with tales of ordinary people who bought property decades ago and saw values skyrocket to the millions. Seth Weissman is seeking investors to get in early on the next hot neighborhoods. The veteran of Goldman Sachs Group Inc. and hedge

  4. Investing – George Soros bets $2bn on stock market collapse, Warren Buffett's Berkshire reveals Charter stake, cuts DirecTV, Hedge funds lusting to cash out of MGM, Top hedge fund managers are buying Ally Financial, Hedge funds dumped 5m Herbalife shares in Q2, Paulson & Co hedge fund ups Puerto Rico real estate bet, Netflix Inc., Citigroup Inc, Google Inc are top new picks in Tiger Management’s 13F[more]

    George Soros bets $2bn on stock market collapse From Newsmax.com: Billionaire investor George Soros has increased his financial bet that U.S. stocks will collapse to more than $2 billion. The legendary hedge fund manager has been raising his negative bet on the Standard & Poor's 500 Inde

  5. Investors now net short S&P500 and increased Russell shorts, technicals suggest further selling[more]

    Komfie Manalo, Opalesque Asia: Market Neutral funds increased their market exposure to -1% net short from -6% net short last week, according to Bank of America Merrill Lynch’s Hedge Fund Monitor. The report also added