Private Equity World Africa 2008

The leading African private equity and venture capital event in South Africa according to the organisers.

Private Equity World Africa 2008 is a senior level conference giving you strategies and tactics for investing in private equity.

For delegates

* Close examination of private equity in the African continent – North Africa and SADC focus
* Debt capital markets – where are the best opportunities?
* Successful LP’s and GP’s relationship – looking at the good, the bad and the ugly
* Making private equity investments flexible for institutional investors
* Exit strategies in emerging markets – investigating their strengths and weaknesses
* Investing in mid-cap market – clarifying the value proposition
* New role of venture capital in South Africa


An outstanding marketing solution
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Maxum Incubator

The Maxum Incubator, together with University of Pretoria and IdeaBank are organising the first pre-incubation offering for young online entrepreneurs.

Read full details on Ismail's post here.

NEW PRIVATE EQUITY FUND LAUNCHED TO INVEST IN AGRIBUSINESS IN AFRICA

A new R700-million private equity fund has been launched with the aim of investing in the buoyant agribusiness sector across sub-Saharan Africa. The Agri-Vie Fund, formed by Sanlam Private Equity and the investment group Strategy Partners, will focus on entrepreneurs involved in the agribusiness value chain, rather than directly in the farming industry. It offers an opportunity for potential investors to tap into this growing African market and gives strategic assistance to the owners of agri businesses.

The fund recently had its first close at R330-million, with initial investments from the insurance industry and development finance institutions such as the Development Bank of Southern Africa (DBSA), Industrial Development Corporation (IDC) through the Risk Capital Facility - a fund established by the European Community and the government of South Africa and managed by the IDC - and the US-based Kellogg Foundation. The fund is open to other investors until May 2009.

Pieter Kriel, chief executive of Sanlam Private Equity, said that agribusiness is the mainstay of the economy in most sub-Saharan countries. “On average the gross domestic products in sub-Saharan Africa have grown between six and seven percent in the past three years and the number of democracies has more than doubled since 1999. The resultant effect is that these countries offer exceptional opportunities for investors.”

The fund will look at businesses which offer value-added components along the agri-business value chain. “We will not invest in farms, but rather in the processing and marketing of farming outputs such as food, certain beverages and fibre products. By following the route of expanding the industry, it will ultimately create new growth opportunities for existing and emerging farmers. In addition, Agri-Vie's mandate includes investment into ecotourism in the context of integrated rural development,” said Kriel.

Emile du Toit, the divisional executive for private equity at DBSA said, “Agribusiness is an important contributor to economic growth in the region and is poised for significant expansion. Given the significant lack of equity risk capital to finance agribusiness transactions, the DBSA’s participation in this fund allows it to play a catalytic role in developing financial infrastructure to provide access to much needed long-term risk capital in this critical sector.”

Du Toit added that sustainable investment in agriculture can make a significant contribution to socio-economic development, in keeping with DBSA’s development mandate. “I believe that several countries on the continent have comparative advantages in agriculture, which provide a logical base for economic growth.”

Agri-Vie investors have appointed an active management structure, led by Herman Marais of Strategy Partners, which comprises members from Sanlam Private Equity and a women-led agricultural investment group, Makotulo Agricultural Company, among others.

Marais said that Agri-Vie is a true business partner for agribusiness entrepreneurs. “The fund contributes risk capital and management know-how to fully unlock the potential of businesses.”

He said, “Over and above the opportunities associated with the prevailing global food and commodities cycle, there is growing demand globally for various African exports such as organically grown vegetables, fruit and flowers, processed natural fibre for industrial applications as well as natural supplements and health products. However, there are numerous existing agri-enterprises across the African continent which are not performing to their potential - mainly as a result of lack of access to capital, limited market knowledge and infrastructure limitations.

“Agri-Vie aims to be a catalyst to unlock this potential to the advantage of the enterprises concerned, their host communities and the fund’s investors. Agri-Vie believes that sustainable development is best brought about by the disciplines of investment rather than aid grants.”

Kriel said that the fund had a strong empowerment focus. “Our involvement was partly spurred by the Financial Sector Charter which designates agri as an area of ‘targeted investment’. Both Sanlam Private Equity and Strategy Partners truly believe in the business and investment potential of agribusiness in South Africa and on the continent and are delighted to be playing a role in realising it. The South African portion of the fund was started with the express purpose of empowering agri-businesses and playing a key catalyst role for BEE in the agribusiness sector.”

Agribusiness women such as Ntombi Msimang and Jean Davidson are among the directors of the Makotulo Consortium. Kate Moloto, a shareholder in Agri-Vie’s investment management structure, says “Women are far behind with regard to participation as owners and managers in agribusiness. Through Agri-Vie, we intend to make a meaningful contribution to empowering women in this sector.”

Marais said the fund had found a niche in Africa and was already experiencing healthy transaction flow. “We have had significant interest from international investors and have formed a parallel structure to the South African portion of the fund – a separate entity domiciled in Mauritius which is focused on investment in sub-Saharan countries outside of South Africa. We are already evaluating more than 20 possible investments in South Africa and the Mauritius structure of the fund is looking at a similar number in countries such as Botswana, Tanzania, Uganda and Kenya.”

Venture Capital and SME Tax Incentives

The sections which are relevant to the small business sector / venture capital are outlined below - section 12J (Venture Capital Companies) and the Sixth Schedule (Presumptive Turnover Tax).

Venture Capital Companies: pages 46 - 51 of the Bill (and 54 - 58 of the Explanatory Memorandum);

Presumptive Turnover Tax: pages 102 - 113 of the Bill (and 43 - 53 of the Explanatory Memorandum).

The SAVCA VC Development Sub-Committee will be meeting with National Treasury to discuss these proposed incentives.

Full details can be found on the SAVCA website

Business Partners to Welcome New Managing Director

JOhann Rupert, chairman of Business Partners Limited – leading financier of small and medium enterprises in South Africa – announced at the company’s annual general meeting yesterday that Nazeem Martin has been selected to become Managing Director on 1 January 2009.

Mr Martin, currently deputy managing director will succeed Jo’ Schwenke, who will retire as MD on 31 December 2008.

“I am pleased to announce the selection of Nazeem Martin as succeeding Managing Director,” says Johann Rupert, “Nazeem is a talented and experienced leader, who has already made a significant impact on the small and medium business environment in South Africa. Business Partners is an extraordinary company, and I am certain that Nazeem will lead this company to new levels of success, despite the current difficult economic environment.”

At present, Martin heads up the company’s iKapa Business Unit, based in Cape Town. “It is an honour to be entrusted with the responsibility of leading a company that had such a positive impact on the SME environment,” he says, “and it is a privilege to succeed Jo’ Schwenke, under whose leadership and vision, Business Partners grew into a company respected and acknowledged internationally for its unique solutions to the challenges SMEs face.” Martin concludes by saying “our stability and success as a nation depends in large part on a vibrant, enabled and productive entrepreneurial sector,” says Martin, “and it is our intention at Business Partners to be one of the continent’s most significant forces for innovative entrepreneurial development.”

During the twelve years of Jo’ Schwenke’s tenure, the company’s investment portfolio has grown organically from R564 million at the end of the 1997 financial year to R1 672,1 million. It was also during this time that, under Schwenke’s vision and leadership, a unique investment model, which makes use of equity, royalty and loan financing, was developed. The Business Partners investment model for SMEs is internationally recognised as one of the most effective for use in developing economies.

“It is with a sense of satisfaction that I approach the end of my term,” Schwenke says, “and I believe the company will continue to build on its success under Nazeem’s able leadership. Nazeem’s solid educational background, previous business experience and excellent track record make him the perfect person for the job.”

www.businesspartners.co.za