Private Equity In Africa: Report From AVCA Conference 2015

On the Eurostar to Paris

I am on the 0935 high-speed Eurostar train from London to Paris to support the Dentons Paris office for its Invest in Africa event at the Medef Centre on 22 May. As I fire up the laptop to finish off this month's article, I wonder whether I will ever sit on a high-speed train in Africa....

Private equity as a force for good in Africa

As my past writings may have alluded to, private equity is a space that I am passionate about. I love the idea that you can use money, expertise and relationships to grow businesses - surely capitalism at its most raw. However PE has had its share of detractors.

For example, in the US, critics say that PE makes money the wrong way - buying "target companies", making people redundant, piling on debt and selling the remnants in tidied up boxes - which by then are doomed to fail. To make matters worse, PE firms get tax breaks, paying 15 percent on profits instead of 35 percent.

But the industry and its defenders say it is a strong creator of jobs and value, and a vital source of ambitious and diversified returns for pension funds, university endowments and other investment pools that serve ordinary people.

Africa is at a different stage of growth to the developed world and growth capital is what Africa needs and PE provides. Africa needs all forms of capital so PE capital in Africa has been welcome and has not had much of the criticism (at least so far!!) that PE has had in the developed world.

A plug for AVCA

So PE in Africa is different to PE in the developed world. And this difference is epitomized by AVCA (African Private Equity and Venture Capital Association) - the pan-African industry body that promotes and enables private investment in Africa. I got involved in AVCA when Dentons became a member a few years ago. Its mission statement is that:

"AVCA plays an important role as a champion and effective change agent for the industry, educating, equipping and connecting members and stakeholders with independent industry research, best practice training programmes and exceptional networking opportunities."

I have been involved with many trade organizations and business clubs, and I think that the key to success for a club is creating the right inclusive environment and making members feel that they are part of a family. AVCA seems to have found the formula for this.

Africa PE is young and fun

The Africa PE industry is still young and this youthfulness comes through in its members and...