Marking the 3rd anniversary since Capria’s inauguration at SOCAP 2015, I wanted to comment on a few of our learnings about investing in and with fund managers in Africa. I’d also like to encourage both new and established managers to consider joining Capria’s growing global network, as our 7th investment cycle has just opened.
As you can see from this heat map, Africa continues to deliver the largest number of fund manager who apply to join the Capria Network.
A Thriving Ecosystem
From an ecosystem perspective, here are a few key learnings:
- Despite political, economic turmoil generally, the investment vibes are still positive as evidence by continued funds inflow into the continent
- Increased PPP (Private Public Partnerships) initiatives
- Increased deal flow, although deal quality and bankability (exit viability) remain a challenge
- Continued need for fund managers with deep understanding of the region coupled with permanent on-ground presence
- China Inc. is increasingly engaged
- Permanent Asset Funds are finally getting to first and final closes
- More PE and “mini-PE” funds emerging, including those with debt financing taking major role
As a special note, the further engagement of China Inc. in both public & private sectors has many worried. They are believed to be scooping up everything and anything they can. While some are certainly fine global investors, others will stop at nothing to close an investment. It’s becoming a very competitive landscape, but how fair is the playing field?
Applicants to Capria
Looking at fund managers who have applied to Capria, a few more learnings from their applications and their Capria Quantum evaluations:
- We’re seeing generally larger funds ($76M+) apply from Africa (vs. Asia and LatAm), with increasingly larger ticket sizes over the last 3 years
- The magnitude of funds deploying multiple instruments has gone up over 3 years – the importance of using the right instrument for the right company is growing
- SSA domiciled fund managers’ capabilities are weaker than both LatAm and S/SE Asia across all 8 areas of Quantum evaluation, with the exception of Impact & ESG
- The need for capacity development support is just as high for second+ time managers as it is for first time managers
- We’re very pleased to be seeing more female-led and female-inclusive fund in our pipeline in SSA vs other regions
- Gender does not affect the capability evaluations reported by funds in Africa (although at Capria we believe that funds with at least one female principal will perform better)
- Some of the top areas SSA managers have deeper deficiencies include partner conflict resolution, governance policies and systems, web presence, cybersecurity systems, and LP management
Capria Network in Africa
We’re please to be working with these managers across the continent:
Applications Currently Being Reviewed
Capria is looking to invest in two additional funds throughout Africa. If you’re a fund manager, apply now.
