September 21, 2017: Financier Worldwide, the monthly corporate finance magazine, invited Hurley Doddy, Founding Partner and Co-CEO of Emerging Capital Partners (ECP), to discuss the unique opportunities and risks of private equity investing in frontier markets.
Mr. Doddy, alongside peers Leith M. Masri at Foursan Group and Thomas C. Barry at Zephyr Management L.P., spoke of his experience in identifying opportunities in frontier markets and of their unique characteristics. Frontier markets are usually characterized by smaller deal sizes, lower asset valuations, and less regulation, but can also offer higher growth prospects and returns, attracting investors. With increasing interest in emerging markets in recent years, frontier market governments have made progress in introducing business-friendly regulation and economic policy to safeguard investments and investors, counteracting the higher risk profile of these markets. Historically untapped African frontier markets such as Ethiopia and Republic of Congo show promise as they share similar positive fundamentals and could benefit from growing regional integration across the continent. However, as Mr. Doddy notes, it is of key importance that an experienced GP that understands the local market assess such markets.
Mr. Doddy also noted that ECP has witnessed a maturing private equity industry on the continent in recent years, exemplified by a rise in secondary buyouts. The rise in buyouts as an exit route strategy is a smoother and speedier process that allows fellow private equity firms to partake in promising opportunities through competitive bidding processes and is a promising sign of further growth on the continent.
The full article is available online on Financier Worldwide, here.