| Topic Name: |
American VC in Africa |
| Message Name: |
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| Date Posted: |
06/13/1999 |
| In Reply To: |
I believe VC in Africa is pretty much restricted to funds sponsored by development organisations - which do operate there. They would be IFC (the World Bank affiliate), Proparco (an affiliate from Agence Francaise de Developpement) and CDC (Brit Commonwealth Development Corp). Of course, in my experience, these orgs think they practice venture capital but implement a downgraded form of it : they know nothing about entrepreneurs, everything about procedures.
Also, South Africa seems to be the most active location.
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| Message: |
The message regarding development organizations being the sole sponsor of vc/private equity financing is actually quite inaccurate. Investing in Africa is perhap's one of the Street's biggest secrets. All of the big money players - increasingly the private equity shops - are putting money in Africa. Small wonder since more than a third of the world's best performing stock markets are in Africa (both north and sub-saharan). The returns are astounding even if adjusted for risk (political, exchange rate, etc.). Case in point is HarbourVest, one of the world's largets international private equity shops. The have taken a major equity stake in a telecommunications firm targetting Sub-Saharan Africa - www.adesemi.com. There are more than 30 private equity funds in South Africa. Increasingly there are also more privately funded pe funds targetting the region as well. Unfortunately, there is a very small (and rather closed) network of people doing business in the area. Everyone pretty much knows everyone else and, because of the nature of private equity (i.e. the fewer the players the better), no one really has an incentive to go around talking about how great it is to tap into the African Markets. The only group who really has an incentive is the African gov'ts because they would like to see more competition in the area thus increasing the price for gov't divestitures etc. Jim Rogers formerly of Soros' shop has named the region as one of the most attractive in the long run. Email me for questions....
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