Africa private equity debate: Realising Africa’s potential

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Executive summary

• Private equity firms are focusing on countries with newly-discovered natural resources• Competition is increasing, particularly for deals of over $50 million• Buyout funds provide an exit opportunity for the middle market• Firms should look to collaborate more• Regulators, rather than regulations, can be unpredictable• Africa is still a risky place to invest• There is a long list of failed private equity ventures in Africa

Euromoney Which countries and sectors in sub-Saharan Africa are the main targets when it comes to private equity?  

JS, White & Case Around five years ago most private equity investments we saw from foreign investors were predominantly focused on South Africa and Nigeria but more recently we have observed an increased interest from private equity investors in countries that have recently discovered natural resources. 

Let’s take oil and gas as an example. In the last few years, countries such as Ghana, Uganda, the Ivory Coast, Mozambique, Tanzania and Kenya have discovered large quantities of oil and gas. And there seems to be an increase in the interest from private equity investors in these countries – not only in the oil and gas assets themselves, but also in the surrounding services sectors. It is a trend we find quite interesting. 

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YK, Vantage Capital We are currently investing our third mezzanine fund, which is primarily focused on South Africa and about 50% focused on the rest of the continent, by which we are really targeting about 10 markets – Ghana, Nigeria, Kenya, Uganda, Tanzania, Botswana, Namibia and Zambia and we have started looking at opportunities in Ethiopia and Mozambique. 

Industry wise, and in line with our mezzanine structure, we believe it is important to invest in companies that can pay regular coupons in the reasonably near future so we like infrastructure and commercial real estate investment. We are not keen on residential real estate because of the difficulty in the offtake visibility and we avoid primary agriculture, where there is no irrigation. Otherwise, we are open to investment opportunities in all sectors. 

RA, Musa Capital I actually try to avoid talking about specific sectors, because it is somewhat prescriptive. Through private equity, we look at solving portfolio company barriers to growth or better operating performance, and this leads us to cover a number of sectors for one company.  For instance in housing: one of our portfolio companies builds social housing, but the next problem in developing this is end-user financing. How are people we are providing housing for going to pay for a mortgage? That has led us into the issue of credit, risk and credit management which private equity firms may choose to get involved with. And if you are able to provide that, residential real estate at the lower income segment becomes an interesting project. But it is like many of the deals in Africa – it doesn’t come prepackaged.

There is a strong, development opportunity with private equity and we pride ourselves in making a difference on this continent. 

DL, Leapfrog Investments One of the backbones that cuts across many of the sectors we are pointing to is financial services, which acts as an enabler for so many other things to grow and develop. This is even more significant ​when we start talking about the emerging consumer in Africa, and other emerging markets, and about tapping into that consumer base. 

NC, Ethos Private Equity One interesting way for private equity to be put to work across Africa is for it to support local portfolio companies to adapt their proven business models and take the model from one country to another. 

For example, we have a company called Waco, which provides scaffolding, modular building and sanitation products – crucial to all countries that are engaging in significant infrastructure rollout, which is the case across the African continent. So for us, one of the best ways to provide private equity capital is through Waco: for it to partner either with a business in specific geographies or actually set up an organic operation.

Euromoney So how is competition evolving in the private equity space in Africa amongst yourselves and others, especially as we see more and more Africa-focused funds coming on the scene?  

PL, Barclays When we think about competition in private equity it is really at that end of the spectrum where you genuinely are competing with everybody who has some kind of capital allocation to Africa. 

NC, Ethos Private Equity I think there is more competition at the higher end of the deal spectrum – at the level where a fund is looking to deploy equity cheques of above $50 million. At this level there are fewer deals and those deals are normally disintermediated, hence pricing is sharper. 

But the concern is that some of these players are paying top prices for these assets. One therefore will need to come up with ways to create value to mitigate against poor returns from paying a high price. 

YK, Vantage Capital Yes, there is a lot of capital chasing deals in Africa, and I agree with you that at the larger deal ticket sizes, where the big buyout funds play, there is more competition. However, the market is also growing and there is now a larger ecosystem of funds looking at the middle market and the base of the pyramid, which is encouraging. 

For us, who play in the middle market, we also see buyout funds as an exit opportunity because the IPO market is relatively small and there are not many M&A opportunities out there.

Joshua Siaw (JS) is a global partner and director of Africa practice at White & Case

With continued economic growth and diversification in Africa, there is room for all of us to play in this market. But I also think it depends where you play in the capital structure and what size of companies you target. For us in this room, we are not trying to be everything to everybody, but together we cover the different pockets of the market.

Euromoney Is there some collaboration between your firms, if you do work in different pockets? 

RA, Musa Capital One thing on which there is definitely competition is fund-raising, because we all go to the same places most of the time. But in terms of deal origination and exits, there is more collaboration than competition. For instance, we can collaborate with larger private equity firms in terms of exits. 

We get to a point where we have taken a company as far as we can, and perhaps we need a partner that has a different platform or a different level of expertise to take them further. By sharing some of the upside we can benefit and achieve higher returns. We are very open to talking to other private equity fund managers, because we see that as an evolution in terms of another alternative way in which we can exit, or partially exit, and achieve even greater returns. 

NC, Ethos Private Equity Part of our strategy is to collaborate with like-minded investors. For example, one of the challenges that we have faced in investing in the rest of the continent is to try to mitigate against conflicts of interest when you partner with family groups. To avoid that and still maintain control of the targets, we like to partner with other private equity players where we can acquire control of the companies in question. Then you are collaborating with someone who has exactly the same view of life as you do.

However, I am interested in the point that Richard made about fundraising and whether we should be collaborating or competing. In my view, we should not be competing, because I believe that we have different strategies. We should be advising investors on who is the right person to partner with, whether that be myself or someone else in this room. 

RA, Musa Capital Let me clarify. The competition is not created by the private equity fund managers but by, what I believe, is a lack of understanding by global investors who aren’t able to differentiate between fund managers.

Once you deliver your pitch to investors, one of the first questions we are often asked is why they should give us money and not invest through larger international private equity funds. My reply is to highlight how different our strategies are from these firms, and that we shouldn’t be thought of in any way the same. Not only do they lack an understanding of the continent, but they also don’t understand the focus and capabilities of local fund managers. Most local fund managers are still not of sufficient scale to warrant the necessary due diligence required to make an investment.

And because African fund managers largely have not had many exits, the portfolios have not really been judged yet. Limited partners (LPs) are struggling to find who is who, because there is limited data to quantitatively differentiate fund managers. It is unfortunate, but we are still early days into the African private equity market. 

YK, Vantage Capital I think knowing what each other does – in terms of investment mandates – would really help. We all review lots of pitches every week and the majority of them just won’t work for our funds. We all send the “thanks but no thanks” emails but it could be much more constructive to have a shortlist, through meetings like this and others, whereby I know what you do a little better and I can refer a deal to you, and likewise. 

That would help the investee companies as well, it helps relationships among us and, if we are not able to do one deal together because of pricing or other issues, at least we know where our risk appetite ends and someone else’s begins. 

NC, Ethos Private Equity To be completely honest, I don’t think we know much about each other’s portfolios, so we are missing out on possible cross-selling opportunities. It’s as if we guard our portfolio as something that nobody should know about. Whereas if we knew a lot more of what each other was doing, there could be ways that we could work to drive value into each other’s portfolio companies and collaboration becomes a win-win proposition. 

YK, Vantage Capital This is exactly why meeting more often to talk in a frank way would help. It all comes down to being open and looking at collaborating – in various forms – as a new way of deal hunting. We all seem to be looking for the untouched investment opportunities but in many cases the better opportunities are those that have already been partially cultivated. 

RO, Eiser It would be interesting to find out how open we all are to see if we could have a discussion on internal rate of return (IRR) expectations. But then I think the game changes completely and people are less willing to open the kimono first! 

NC, Ethos Private Equity But is that not also driven by the investors? And at the end of the day, I don’t believe it is that secretive any more. Everybody will say we price 25% of IRR for some reason or another. And even the numbers regarding your track record are becoming available to everyone. 

RO, Eiser I wish I could price at 25%.  

NC, Ethos Private Equity Not in infrastructure, you won’t! 

RO, Eiser A less obvious area of collaboration, and something that generally keeps us up at night, is where rule of law and respect for contracts in certain jurisdictions may not be as obvious. If one fund loses because of issues with contracts, there will be a threat to investment through private equity more generally. 

There is obviously competition for the few assets that are good, but there is also security in numbers. We do take comfort from the fact that we are all in this together when it comes to investing. 

DL, Leapfrog Investments Where you have complementary expertise and value-adds, especially when you get into less specialized, broader-type investments, this is where we find collaboration very interesting. I think of some of the potential transactions coming down the pipeline, for example Nigerian banking. These are very large transactions and we certainly cannot do them all on our own. 

Euromoney There are clearly opportunities, no matter how difficult they may be to access, but can we elaborate a little more on the risks involved? 

RO, Eiser I do not think it is coincidental that you have seen this increase in inner tension and flow of capital towards Africa without looking at what has been happening politically. When I started working in infrastructure, on the equity side 10 years ago, there were only one or two companies that were looking at investing in Africa exclusively and those were generally linked to former colonial partners who understood the dynamics of the politics in those countries. 

Richard Onyango (RO) was recently hired by Eiser Infrastructure Partners

Now you are seeing American companies coming in, Asian companies, Australian, Middle Eastern, all looking for opportunities on the continent, and also with increasing confidence that democratically and politically you can invest for the future and that the regulatory environments and respect for law will continue to be there is the key. 

Having said that, and listening to people around the table, you still see that investments and capital are focused generally in certain areas and certain countries, and that is indicative. In other places there is still a lot of chaos and there is still a lot of uncertainty about whether people want to invest there. Political risk is always round the corner and the big unknown in a lot of areas.  

JS, White & Case I agree that the political and legal risks cannot be underestimated. Looking at the continent as a whole, there are some countries where their legal system is based on the French Civil Code and others are based on the English Common Law system, and then you have local rules, requirements and restrictions. 

Look at local content rules for example: Nigeria and Ghana have recently established rules that affect investment in relation to oil and gas, not only on the extraction side but services as well. Uganda and Kenya are doing the same. And they don’t only apply to natural resources, a lot of countries are making it much broader, similar to the South African indigenisation laws, and it is so important to understand that. Then you have foreign exchange controls, which affects repatriation of profits among other things.

There are many examples of investors who have overlooked restrictions that local content rules impose. It is so important to work with local lawyers who really understand local rules, regulations and regulatory constraints.  

NC, Ethos Private Equity But then compare this to the US: I think the US is probably one of the most regulated markets but what is more important to note is the behaviour of the regulator. Will they always behave in the same rational manner, in accordance with their charter or mandate? That is the risk in Africa – that the behaviour of the regulator is unpredictable, rather than the fact that Africa has too much or too little regulation.

Currency is also a risk, and can be a huge risk at that, especially in African countries that are very commodity dependent. If the pricing on certain commodities comes off in these economies, there is a pressure on the currency. We have seen it on the Naira as a result of the fall in the oil price. We can try to mitigate this by investing in platforms that are in multi-geographies.

Dominic Liber (DL) is a partner at Leapfrog Investments, a private equity firm

There are also some very practical things: When you invest in the certain African geographies, the lack of infrastructure can be very hindering to growth. But again, this can provide opportunities for private equity, if we can help companies improvise to overcome challenges. 

For example, we have a business that sells ovens, but because electricity is not very reliable in most African markets they adapted their ovens to use paraffin. Those are some of the things that we can bring, as private equity investors – solutions that continue to capture the opportunities. Otherwise you would just walk away. 

DL, Leapfrog Investments Leapfrog operates in very heavily regulated sectors, by definition, so in insurance, in banking and in payments you naturally have to engage very intensively with the regulators. Indeed, we have found it important to start building those relationships very early on when we contemplate going into new geographies, to the extent that some of our deal flow actually comes through the regulator.

On the currency side, we do deep assessment at the macro level of different countries before we enter, but once we are in, we focus on creating value at the company level. We don’t for example try and hedge or short currency risk through the investment period.  

JS, White & Case On the partnership side as well, one risk, not new to Africa and emerging markets, is corruption risk, particularly with the smaller African countries where the government plays such a big role in the economy. Many successful business people in such countries are well connected to the government or have an element of political exposure. It is important for investors to understand international anti-bribery and corruption laws and see if there is any risk of exposure.

Euromoney Where do you begin to look for investment opportunities in these types of environments? 

NC, Ethos Private Equity For us investing in Africa, in certain growth sectors there aren’t many deals that are easily bankable, that’s to say ‘well-baked’, ready-made deals. So if you are willing to do some hard work, and build up a business from its bare bones, you can get assets at very reasonable prices. 

DL, Leapfrog Investments There is competition for the ‘ready-baked’ deals, but as mentioned, these are only a handful. There are maybe one or two plum assets in each market that a big global insurer can swoop in and take over and meaningfully integrate into their operations. 

If you go a little further down the list, to the companies that have growth potential, this is where we see tremendous opportunity. But to take those companies on that journey – at least this is how we approach it – requires sector focus. You need to have a very deep understanding of what can be done with that company, in that market, to create the value that will make it of interest to a large strategic in due course.

Richard Akwei (RA) is an executive director and member of the executive committee at Musa Capital

There is also a certain amount of competition mounting from the strategic players themselves. They have been a driver of some of the largest deals. What we are seeing is that this is almost a third way: In the insurance sector, for example, we are seeing mounting interest by large international insurers and insurance groups on the continent. This can be competition as well.  

JS, White & Case Some corporates take a much longer-term view on a particular industry. This is where some private equity funds can lose out on deals. For example, if you are looking at the oil and gas space, if a major oil company feels that they need to be in a particular country on a long-term basis they are more willing to overpay for assets compared to private equity funds who would traditionally take more of a medium-term view on the same opportunities. 

Because of this longer-term view, corporates’ investment proposals at times are seen as more attractive to sellers.  

RA, Musa Capital I welcome the increased interest by the global players – be that private equity firms or multinational corporates. For one thing it helps connect Africa to the large institutional capital bases in Europe and in the US. Ultimately, if someone like Calpers gives 1% of its assets to Africa it is a huge flow of money into our continent, which is great. 

But my question to them has always been, ‘what are you bringing to the table besides financial expertise?’ We all have similar qualifications, but do they really know enough about the market and the company to generate an attractive return? 

Philip Lindop (PL) has been head of investment banking for Africa at Barclays since 2012

And let’s be honest with ourselves, private equity is about wealth creation and many of the local sources of capital, which are becoming more and more relevant in terms of funding private equity in Africa, are starting to wonder where the carry is going. Is it going to Washington? Is it going to New York? Where are you building the local expertise? They want to know what the value-add other than the financial return will be. 

This is becoming a serious issue. Companies want to deal with people on the ground and people from this market, so that we develop the local private equity expertise. I think, as we go forward, you will hear that a lot more. 

RO, Eiser On the point of capital inflows into Africa, we play exclusively in the infrastructure space and exclusively on power, so we are one of the few sectors where our return or our upside is actually regulated or even capped. But it is interesting to look at what has happened over the last decade and what is definitely clear is that return expectations have had to come down. This is mainly because regulators have a different view of what the risk premium should be for their particular country than investors. 

When you have a low yield environment in the US through quantitative easing and now, probably, indefinitely with €1 trillion that Mario Draghi is talking about, there has been a mismatch in expectations from what regulators actually think they should be able to get from investors and that, as infrastructure investors, is a worry for us.

In my view Africa is still a risky place to invest, when it comes to things like basic infrastructure, like power, and it is probably indicative that we still have these problems. South Africa, is one of our bigger economies, and here we are experiencing load shedding right now and it is much worse in the rest of the continent. It is dangerous to push the envelope too far and say that people must adjust their return expectations, because a lot of the risk premiums that are applied to Africa still are justified and relevant today. 

NC, Ethos Private Equity In South Africa we have been able to access debt in a manner that any private equity player in the world can, because of the sophistication of the South African financial market. But it is still a challenge in a lot of other African markets to get some of the banks to provide you with working capital or capex funding in a manner that is supportive to the private equity model. It is still expensive to access financing in the rest of the continent, compared to South Africa.

For me, sometimes corporates are able to bring things such as debt financing to the table because they can use, for example, their New York balance sheet, and they can afford to put two people on the ground, let’s say, in Nairobi. They will be competitors to us in these geographies, not because necessarily just of tenure, because these enablers that are needed for private equity to be able to support the private equity model in those markets are not readily available. 

DL, Leapfrog Investments One of the unexpected things we have seen with that – almost the opposite of what you might expect – is that the strategic interest in an exit can happen much sooner. The two exits we have had happened considerably sooner than we initially thought they would, but by the time we had got the platform to a certain level of readiness the interest was immediate and we thought that exit would also benefit the company. Our original thesis is for long hold periods, and that remains fundamentally how we will operate. We want long-term partnerships. 

YK, Vantage Capital From our perspective, we are not only looking at strategic buyers and listings as exit options. Our bread and butter is refinancing. This becomes more feasible when African banking markets are deeper or better capitalized, with good pricing and competitiveness. 

In one of our exits recently a Nigerian bank refinanced us on a South African asset. Examples like this make the African PE market more attractive to foreign investors and open up the opportunity for more capital to flow into African PE funds, because there is more visibility on exit options.

Euromoney How can financial services and banks help support private equity throughout the region?  

PL, Barclays You very rarely see private equity deals in sub-Saharan Africa which lead to an IPO. Outside of South Africa there are very few businesses that are of sufficient scale to list in London or one of the other deeper, more liquid markets. 

On the debt financing point, in terms of the handful of big deals being done, I can assure you the banking community is all over these opportunities, because they represent the handful of bankable assets out there, ex-South Africa. 

Ngalaah Chuphi (NC) is a partner at Ethos Private Equity and leads Ethos’ sub-Saharan Africa strategy

And based on our experience in South Africa, the desire for a local bank, such as us, to lend in the region is absolutely there. But the challenges we are confronted with are presumably exactly the same as the challenges you are confronted with outside of South Africa – a lack of consolidated group financials, audited financials, and family driven businesses where the dynamics can be difficult to understand. It can be as difficult to put our capital to work as it is for you. 

I can confidently say the desire is there for us to do the credit work, we just need to help these entrepreneurs professionalize their business. 

DL, Leapfrog Investments Which comes back to the problem that there is a scarcity of ‘ready-baked’ deals that even you, Philip, can just walk into – and you are based in Africa. That is one of the things we see as our role, as private equity firms, is to bridge that divide. 

NC, Ethos Private Equity There is a huge role for the banks to play in assisting us, as private equity investors, to grow the opportunity in Africa. If you look at most of the banks, and Barclays included, traditionally they buy government securities or fund imports.

They haven’t really developed skills in country where long-term lending is needed. Clearly such skills are available in South Africa but in the rest of the continent there is still a lot of education to be done on this.  

PL, Barclays A couple of things come to mind. You talk about skills and I assume in that comment you referred, Ngalaah, to the skills, in-country of entrepreneurs and business people generally. In our business one of the huge opportunities that we see is with the African diaspora, who can bring world class banking skills back in-country. 

Moreover, our asset book for term lending outside of South Africa has been growing at over 30% a year for the last three years, which shows just how ambitious we are. The types of businesses you are investing in are absolutely the types of businesses that the banking industry wants to do business with. 

But don’t forget that we are talking about interest rates in local currency, not just in double digits but in the 20s. I do not know which is harder, debt financing a business with interest rates of say 20% in local currency, or undertaking hard currency borrowing in this environment. There are some real challenges here, but we are up for that. 

RO, Eiser As an ex-banker until very, very recently, I think there is also a lack of sense in the market about how capitalised these banks are. Basel III has prevented banks in Africa from lending long, because it becomes very expensive. 

When I was at Standard Bank, it was by and large an infrastructure bank – which in essence means lending over 10 years. But Basel III means that if you have to reserve 25% to 30% more capital, those additional costs are passed through in how banks set interest rates for loans. As a result, something such as trade business looks much more attractive when you compare this to project finance. In that respect, I don’t think there is much that you can do, as a lender, if the global standard requires you to work in this particular way.  

NC, Ethos Private Equity I am not a banker, but you can school me in the long approach – wouldn’t that requirement be there, even in the developed markets? 

RO, Eiser Following the financial crisis, Basel III was quickly adopted by South Africa, New Zealand and Australia. There is this push by these three central banks to be the first, but that has an effect on your banking and what you can do. The European and US banks have looked at the requirements, predicted the effects on lending and said: ‘No, thanks’. 

Yet, when you look at the causes of why we ended up in that crisis, it didn’t stem from Africa. There is a question about whether we really should be running into this sort of regulation when everyone else is waiting to observe the consequences first.  

PL, Barclays In Richard’s old life the only growth market for project finance in the world is Africa because there is a huge need for it. But it is only in Africa that these assets are sitting on the banks’ balance sheets and regulatory pressures are building. Everywhere else in the world those projects are intermediated straight into the investor market or into the capital markets. This goes back to how we must actively develop the capital markets in Africa. 

The work we have done with most of the sovereign bond issuances in the last two years will soon foster an environment for local corporates to enter the markets, which is a good starting point. But we all need to be working hard to be putting out long-term, local currency bond instruments, which, in turn, will create opportunities for the development of the domestic equity capital markets. I believe that we all have a shared responsibility to do this. As an investment bank, we have to create intermediation between capital providers and the portfolio of potential private equity investment targets. This is beginning to take shape, and is what we are all excited about. 

Yaw Keteku (YK) is an associate partner at Vantage Capital

Whether you are Leapfrog or you are one of the larger firms competing with global public and private equity, you have to create your own investment opportunities, as you guys have suggested, by investing growth equity, which gives you the foundation, at a later point, to introduce debt financing. 

And I think you will find that the banks really want to do this work because these are the new emerging corporate players of the future. 

Euromoney Right now, which are the players allocating capital to your funds? 

RA, Musa Capital Traditionally, African private equity used to be funded by multilateral financial institutions such as the IFC. All of them are now saturated with pan-African funds, so we are now looking at more specific sector or country funds. We are seeing greater interest from family offices from the US and Europe. We are trying to access wider pools of capital such as Impact Investors.

The other element on which we decided to spend a lot of time early last year was the local African pension funds. The Emerging Markets Private Equity Association (EMPEA) estimates that there is $29 billion of potential African pension fund capital that could be invested in African private equity.  

NC, Ethos Private Equity There is increasingly significant capital coming in from the Middle East and Asia driven by a growing interest in Africa. That is another area that is available for African private equity to tap into.

In addition, pension funds in South Africa, Botswana, Kenya and Nigeria must come to the party and support private equity because there is a place for this in their asset allocation. The challenge is to get these advisers, these ‘gate keepers’, to become comfortable with private equity as an asset class, which is still not that well-known in Africa. We need to educate them. 

YK, Vantage Capital It is encouraging to see how the appetite of pension funds in South Africa to invest in private equity has evolved in line with recent regulation, which has allowed South African pension funds to put more funding to work in this asset class. 

RO, Eiser Legislation also has a big impact on a pension fund’s ability to diversify. Often, restrictions are placed on pension funds to make sure that if a government wants to raise public debt, the pension funds will pick this up. That takes away from whatever is invested in infrastructure, in private equity or in other investment classes.  

NC, Ethos Private Equity If you have a badge like Carlyle, KKR and so forth, you are a fund-raising machine. A local fund cannot compete with the fund-raising capabilities they have. We must differentiate themselves through our own uniqueness such as local knowledge – the access to deal flow and the ability to work with local management teams. Often, you may find an investor that will listen to your story over that from one of the global firms.  

PL, Barclays When I look at the stock of invested private equity capital, there is quite a long tail of global funds who in their emerging market mandate, particularly pre-crisis, have taken a punt on a South Africa and Nigeria, for example, but there has not really been much competition on the Africa-specific ticket. Whereas now it feels as though there is a huge amount of growth and space for everybody. Isn’t there a benefit in being specialised in this space? Is that not a point of differentiation when you are pitching the same capital providers and limited partners? 

RA, Musa Capital It is but you have to remember that the question is: what is the consequence if you get it wrong? We have come to a stage with sovereign wealth funds in that there aren’t enough African funds that are large enough that they could put $50 million in a single ticket. 

We would love to get $50 million but they will look at it and say: ‘We are half of your fund – it is never going to work’. Therefore, scale is an issue with many global investors that are considerably larger than regional institutions.  

JS, White & Case The dynamics are interesting. If you look at some of the big US private equity funds that are investing into Africa, the investor pool they have managed to tap into includes pension funds that are, for the first time investing in and having exposure to, Africa. Atlas Mara is a good example given that much of their investor base consists of US funds that are investing in Africa for the first time.  

RA, Musa Capital There isn’t a clear path of who you go to or where you get your money from. For me, thinking I could go and look at family offices in Europe would be a ridiculous idea. Unless you know them on a personal basis, you are just another fund manager knocking on the door. Atlas Mara, for instance, has been very successful with family offices. A large part of that has been the relationships that Bob Diamond brings to the table and the existing relationships with US investors.

The reality is that while we are sitting here with the benefit of having raised funds, there is a long list of people in African private equity that have failed in their capital raising efforts. There is still a long way to go.