June 21st, 2016: Africa Global Funds spoke to Hurley Doddy, Founding Partner and Co-CEO of Emerging Capital Partners (ECP) to discuss the latest in African private equity investment, the firm’s track record, and its approach to creating opportunities amid market challenges.
The interview highlighted ECP’s confidence in Africa, particularly with regard to consistent opportunities for growth in East Africa and Francophone West Africa, regions which have been key areas of investment activity for ECP, a firm with a 16-year track record and 39 exits under its belt. Mr. Doddy also spoke about challenges in Africa, including operational challenges inherent to rapid business growth on the continent as well as macroeconomic challenges such as currency depreciation, and noted that the latter can be mitigated “through diversification and proper selection of companies.”
Reflecting on the firm’s track record, Mr. Doddy explained that ECP’s strategic focus on mid-cap investments has reduced its competitor pool, as ECP’s funds are larger than many medium-sized African funds but small enough to limit competition with international funds. Mr. Doddy emphasized that deal sizes of around $70 to $80 million have, more importantly, good exit options. Alongside the firm’s constant search for investment opportunities, ECP also looks for co-investment opportunities with new and existing investors. In particular, co-investment opportunities have received growing interest from family offices, sovereign wealth funds, and Development Finance Institutions (DFIs).
As macroeconomic conditions stabilize, Mr. Doddy anticipates that Africa is likely to see a “slow and steady” increase in the variety of funds raised for investment on the continent, including mezzanine, real estate, and clean energy funds. He concluded that, for now, ECP is focused on working with current portfolio companies and on preparing for upcoming exits. Meanwhile, the firm’s strong team on the ground remains vigilant for future investment opportunities.
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