Having hosted one of the panels at the 2011 SuperReturn Africa* conference held in Kenya at the end of November 2011, Will Jimerson, founder and director of boutique private equity and advisory firm, Musa Capital, can offer your audience some provocative insights into the opportunities in African private equity during 2012.
For instance, some of the panel’s views were surprising.
When asked which country they’d prefer to invest in, panellists opted for Nigeria. South Africa was third on the list because it is deemed to be over-invested and, therefore, that there are few opportunities for super returns.
Jimerson says that the mistake investors make is not looking at the SME market, where his own firm has proved repeatedly over fifteen years that super returns are absolutely possible.
Another surprise was infrastructure being considered the most appealing type of investment, in spite of its longer project cycles and the belief that the sector in Africa offers lower returns than those experienced elsewhere in the world. However, the panel felt that the undersupply of infrastructure is so great compared with the need that investing in financial services, ICT, agriculture, or even mining and energy on the continent would deliver inferior returns to those that could be gained from infrastructure.
Less surprising is the perception that Africa is some 10 to 30 years behind India and China and that structural issue, such as infrastructure, education, corruption, and ease of doing aes of conferences held annually in different regions by the world’s largest conference organiser for the private equity industry.