Mezzanine debt funds can be an attractive investment for investors looking to achieve regular cash distributions and potential high total returns, with low volatility and downside protections.
Analysis & Strategy
The fundraising environment in the Southern African region remained rather challenging in 2018, mainly due to the economic and political environment. This resulted in the decrease in the amount of capital raised by the industry.
2018 saw a continuation of what has become a consistent theme of improvement in Africa’s capital markets, writes Hari Chaitanya, Head Investor Services Product Management, Transactional Products and Services, Standard Bank.
The exit environment for African private equity is much more robust and active than many realise. There is an active market both for selling and buying of assets and interests, according to Paul Boynton, CEO of Old Mutual Alternative Investments. “There are a growing number of exit routes across different sectors and countries, not just in the more mature South African market, he says.
In which markets and sectors do you see the best investment opportunities for equity investors in 2019?
Trade has driven much of Africa’s economic growth in recent decades. Yet a sizeable trade finance gap is restricting growth for SMEs. Chris Ash, Managing Director at ExWorks Capital, explains why only innovative finance can solve this impasse.
More than half the world’s fastest-growing economies since 2000 have been in Africa. Future growth projections suggest that by 2030 Africa will be home to 1.7 billion people, 43% of whom will belong to the upper or middle classes.
Sven RIchter, Fund Manager at Drakens Capital Fund Managers, looks at China’s One Belt One Road Initiative and what it means for Africa
The need for energy and the case for investing in energy in the region has generally been well documented. The Southern Africa Community Development (SADC) secretariat’s Regional Infrastructure Development Plan estimates that only 5% of rural areas in the region have any access to electricity. The southern African region as a whole has low access to electricity of about 42 percent compared to around 36 percent for the East African Community and 44 percent for the Economic Community of West African States.
The interest rate risk of the All Bond Index has been systemically increasing over time. This is driven by persistently high fiscal deficits and the resultant issuance of longer term SA government debt. Many retirement fund investors use the All Bond Index (ALBI) as their benchmark for bond allocations. They should be conscious of the steadily rising volatility of bond returns and that such bond allocations are riskier than they have been historically. While the ALBI has been used as a proxy to match pension funds’ liabilities, the ALBI itself has probably grown more volatile than pensioner liabilities.
The Global Impact Investing Network defines impact investments as investments which are made into companies, organisations and funds with the intention to generate social and environmental impact alongside a financial return. It highlights that impact investment has attracted a wide variety of investors, both individual and institutional, and that it is taking place all over the world and across all asset classes.
As far as legal and regulatory developments in Nigeria’s private equity industry goes, it appears that the dots are finally beginning to connect, writes Olubunmi Abayomi-Olukunle, Lead Transaction Counsel at Balogun Harold
African bankers are positive about the growth of trade finance, although considerable obstacles stand in the way of the continent reaching its full potential, explains Doina Buruiana, Project Manager at the ICC Banking Commission
There are many misconceptions about Africa and African investing. One of the more common remarks we hear when introducing Africa to potential investors is, “I know, this is a high-risk investment with a high potential return”. If we use the MSCI index for Africa excluding South Africa and compare the returns and volatility of this index to a range of other global indices, we can see that this is simply not true. The graph below shows US dollar data from June 2, 2002 (earliest available for Africa ex-South Africa) to April 30, 2018.