ECP Contributes to The Economist Special Report on African Private Equity

April 2017: ECP was recently invited by The Economist Corporate Network to contribute to the special report, “A growth engine – Trends and outcomes of private equity in Africa,” sponsored by Baker McKenzie.

The report took a comprehensive look at how GPs approach investing on the continent and provided insights into how the asset class in Africa differs from private equity investment elsewhere in the world. The report highlighted that private equity focuses on growth capital in Africa, while elsewhere private equity investment is accused of an opposite approach.

ECP’s approach of working closely with its investee companies Java House and IHS Towers to strengthen governance and contribute to strategy provided useful illustrations of the positive effects of growth capital. Hurley Doddy, Co-CEO of ECP, explained that Java House has scaled from 12 restaurants at the time of ECP’s investment to 60 outlets and an expansion into new offerings and geographies.

The report also reiterated that telecommunications, infrastructure, energy, utilities, and fast-moving consumer goods are high-growth sectors that retain plentiful opportunities for commercial scale supported by Africa’s size, growing consumer base, and promising economic fundamentals in certain markets. The authors noted that converting these opportunities into results is heavily reliant on partnerships, particularly with locally-embedded players who understand both the market dynamics as well as how to develop commercial potential.

Complemented by valuable transaction and deal value data points from the African and South African Private Equity and Venture Capital Associations (AVCA and SAVCA, respectively) and Prequin, the report demonstrates the industry’s continued resilience in the face of slower macroeconomic growth since 2016.

To download the full report, please access The Economist Corporate Network website here.