Essentials of attracting private equity funding

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Accessing adequate capital to scale up a business can be a daunting task. Great ideas, innovation and market opportunity would waste in the absence of capital. Such Ideas, innovation and opportunity would migrate to firms with adequate capital or the capacity to attract it. Suffice to say that underpinned in most business failures is the lack of adequate funding. The entrepreneur as the driver of business must be able to anticipate funding requirements for the respective stages of the business as well as grow the business to attract the needed capital throughout its life. The early and growth stages of the business being the most critical to put the business on firm footing.

Most entrepreneurs are able to raise the needed capital to kick start their business but would usually face challenges raising capital to scale up. The question is usually whether the business will be able to “attract” the required funding for expansion. The key word, therefore, is “attract”. In other words, the business must be interesting enough to catch the attention of would-be investors with the financial war chest to take a bet and risk their funds on the business. This is typically the case with most institutional investors including private equity funds. Today, private equity funds are a good source of funding for firms that are seeking to grow and expand their business. Nigeria and other Africa countries have been beneficiaries of private equity investments. A good number of the private equity funds that are being raised on the continent are also seeking viable investment opportunities in Nigeria and across the African continent.

On this note, it would be important to share with entrepreneurs seeking to grow and expand their business in Nigeria, across West Africa and indeed the continent some … Read More...

PE remains Africa’s best chance of funding economic growth – Alexander Forbes

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As foreign capital continue to look in the direction of Africa, experts at Alexander Forbes Investments has backed private equity (PE) as the best asset class for funding economic growth on the continent.

Speaking during a press conference in South Africa, David Moore, head of Alternatives at Alexander Forbes Investments, said it is important for investors to be mindful of the nuances that frame African markets. Investing in Africa requires a lot of patience given well-known challenges such as illiquidity, regulation, and political uncertainty.

“We still believe that opportunity exists, with access to some of the fastest growing regions and rapid urbanisation,” Gyongyi King, chief investment officer said. “This gives rise to untapped investment opportunity, supported by policy reform and political improvements.”

He outlined six investment opportunities on the continent that investors can leverage. One of them is the population of people on the continent, estimated at 1.216 billion as at 2016. The working population in Africa is projected to overtake that of China and India by 2034.

The infrastructural deficits across the continent also presents a viable opportunity for investors. There are opportunities in rail, road, and energy which are considered critical in driving the growth of private enterprise in Africa. In fact, investment in infrastructure tops the private markets landscape accounting for $12 billion, according to African Venture Capital Association (AVCA).

King also noted the banking gaps African corporates face compared to their peers in developed economies. Increased institutional investment in unlisted credit across the continent will enable private enterprise to grow and scale in a cost effective manner so as to better meet the needs of Africa’s growing population.

AVCA study has shown that $24 billion new funding was raised for private equity in Africa between 2012 and 2017. The largest investors in … Read More...