The African Venture Capital Association (AVCA) is a not-for-profit entity founded to promote, develop and stimulate private equity and venture capital in Africa. At the 2011 Making Finance Work for Africa conference, VC4Africa had the chance to catch up with Tshepidi Moremong, the co-Chair of the AVCA board and a principal at 8 Miles, a pan-African private equity fund. VC4Africa also followed up with AVCA’s new director, Michelle Essomé, to talk about AVCA’s ambitions moving forward and this years conference, ‘Africa, the Rising Giant.’ The conference will be held on the 22nd and 24th of April in Accra. See our video report with Tshepidi and written interview with Michelle.
Looking at the Africa PE/VC space, what were the major highlights/developments for you in 2011?
“Helios record-breaking fundraising of $900mln. Global buyout interest in Carlyle and KKR. The continent is attracting more interest and investment from Global LPs. Growth trajectory for the continent is expected to continue in 2012 and could reach nearly $3bln by 2020
What trends do you see continuing into 2012?
“We expect to see the following trends 1) Improving Exit Opportunities: Ghana Stock Exchange Alternative Markets set to launch later this year to provide another option to [strategic] sales as an exit option 2) Local Funding set to increase: Regulatory policy in some countries will soon allow local LPs to fully invest in PE, such as Nigeria. Historically LP Africa investment has been driven by the DFIs which have been the driving force for investment and have done a good job of seeding the industry 3) Further Fund Specialisation: Likely to be increased specialisation, such as Aureos’s Africa Health Fund, Adelvo Capital’s focus on technology, Silk invest’s African Food Fund focusing on the food and beverage sector.”
Now that you are at AVCA, how do you find the organization and what do you feel are the strengths you build on?
“AVCA has tremendous brand equity which we will capitalise on to build a strong, relevant trade association. GPs recognise the role AVCA can play, are willing to invest in us and genuinely want AVCA to succeed. We are very focussed on ensuring that AVCA is sustainable, has requisite infrastructure and smart people to ensure we succeed on our brief. ”
What are the major areas you have decided to focus on moving forward and why?
“Filling the gap on the research front. We launched a collaboration with Cambridge Associates to provide the first African private equity performance benchmarks and will be working with the Rockefeller Foundation on an Impact Investing piece. We will revamp our website and launch a newsletter this year, and next year we hope to release an investment activity survey. ”
The AVCA started its new directorship with the announcement of some powerful partnerships. Can you highlight these and their progress?
“Yes, we signed agreements with the British Venture Capital Association (BVCA) and with the Emerging Markets Private Equity Association (EMPEA) – both are well-respected, established and successful industry associations. We hope to learn best practices around governance, training, event management and research. We are partnering with both associations this year to deliver more for our GPs and by introducing new investors to Africa. AVCA will host a 2-day Local LP training programme organised in conjunction with the Commonwealth Secretariat as the Lead sponsor on April 25th – 26th April. We are looking to focus on unlocking local institutional capital, as a part of our value add to members.”
In April, we will come together for the next AVCA conference. Can you highlight this year’s event?
“The upcoming conference – Africa, the Rising Giant – will be AVCA’s 9th Annual event and will take place in Accra, Ghana. We’ve got a very interesting programme with prestigious line of speakers. These will include topics such as: Africa Rising in a World of Crisis, Africa – Getting Ready for Primetime, LPs Perspective on Investing in Africa and Exits: Show me the Money.
We are also happy to announce that with the Commonwealth Secretariat as Lead sponsor. There will also be two additional days for LP Training and LP Portfolio Company Visits. The conference and the LP events are complimentary for all LPs. LP Training will cover topics such as: Private Equity as an Asset Class, Private Equity in Africa and an Insider’s guide to Due Diligence.
What role do you see VC4Africa play in helping to mobilize the space
“VC4Africa is a partner for AVCA. We see VC4Africa shaping the agenda around providing more financing for SMEs.”
Do you have a final message for the community at VC4Africa?
“AVCA realises that the SME sector has growth potential, and we will continue to encourage and mobilise investment in this sector.”
Great Tshepidi and Michelle. We look forward to meeting you again in London and Accra. We continue to support the AVCA network and believe that working together we can do more to mobilize the network, knowledge and capital needed to realize the continent’s potential. We are pleased to have AVCA part of the VC4Africa community.