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46 FINANCE | Investec Asset Management “We are seeing a lot of fintech investments in Africa and I
think there is as much fintech innovation in Africa as you are seeing anywhere else in the world and that’s exciting,” the words of Peter Baird, Investec Asset Management managing principal Africa private equity, demonstrate just one of the factors why Africa is fast becoming the premier growth market for regional and global private equity investments.
The continent has all the
primary qualities necessary
to attract private equity; a growing consumer base, rapid urbanisation, good GDP growth from a low base and now as
the political risks and macro challenges decrease there is ample opportunity to build capital returns for any willing investor.
Baird and his team are running two funds with total assets under management of US$450 million focused entirely on private companies. Over a closed-end total investment cycle of 10 years Baird’s intention is to make the investments, build the companies and then make increased capital returns for the investors.
The two funds are diversi ed by geography and sector. Investec Asset Management’s private equity branch has investments
covering all four corners of Africa including Morocco, Nigeria, Angola, Mozambique, Zimbabwe, South Africa and East Africa.
The investment companies span a variety
of sectors with around half focused on traditional steady growth industries such as retail and transport logistics with the other half geared towards more growth, more technology, more market risk sectors such as clean energy and  ntech.
The private equity sector hit a peak in 2014 when the total value of private investments in Africa reached just over $8 billion, although in the years following, di cult macroeconomic challenges impacted the deal making environment, particularly associated to the volatility of African currencies as the Nigerian naira crashed, but looks to have  nally levelled out. However, Baird sees Africa as a prime growth market and explains that it has idiosyncrasies when dealing with a di cult business environment.
“Every company has its unique strengths
and weaknesses and every company has an investment thesis which is the di erence between what it is worth now and what it will be worth in the future.
“The challenges are company speci c but there are common challenges in African private equity. Africa is a tough place to do business because many of the things you would count on unquestionably in other markets you have to think harder about, but we also think that’s the nature of the opportunity.”

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