Asante Capital releases Spotlight on Africa, highlighting macro trends in the region and global emerging market comps, fx fluctuations, LP sentiment and sources of capital, among other data points.

1. Spotlight on
Africa
Asante Capital is a leading independent
private equity placement and advisory group
focused on partnering with best-of-breed fund
managers in both developed and emerging
markets.
AFRICA MACRO OVERVIEW
WHY AFRICA?
 Great strides in governance and
political stability
 Increasing urbanisation and a
growing middle class have led to
fast growth in consumer spending
 African consumer economy could
be worth $30 trillion by 2025
 Rapid growth in total population
will be accompanied by a growth in
the working-age population
 Structure of African economies
shifting in favour of the resources
and services sectors
 Economies arguably less correlated
to the rest of the world economy
than other emerging markets
 Countries becoming more
welcoming to international
investors
WHY AFRICA PE?
 Local stock exchanges do not
always represent all sectors and
components of GDP
 PE is still in nascent stages;
region is expected to continue
attracting investments buoyed
by expectations of high returns
 PE penetration still low
 Marked improvement in
acceptance of PE as a viable
alternative to debt financing
 Increasingly sophisticated and
experienced local managers
 Growing number of companies
that can benefit from more PE
ownership – professional
management, strategy
refinement, changes in capital
structure, and the know-how
and capital to become regional
or global players
Sub-Saharan Africa
growing in the face of
China and Brazil’s
shrinking GDP projec-
tions. Sub-Saharan
Africa estimated to
grow YOY, while India’s
growth remains
stagnant.
FX risk remains a key risk for investors.
Major emerging market economies
have taken large FX hits in the past 12
months. Collectively, Black Monday &
the Chinese slowdown, falling com-
modity prices and a focus on when the
US will raise rates have contributed to
the weakening of the currencies
highlighted above.
CURRENCY CHANGES
AGAINST THE DOLLAR IN
THE PAST 12 MONTHS
FX RISK ACROSS
EMERGING MARKETS
GDP GROWTH: MARKET COMPS
-3.9%
-6.3%
-10.9%
-11.3%
-23.1%
-32.4%
Source: McKinsey
Source: IMF Overview of World Economic Outlook ProjectionsSource: Asante Capital Research

2. Post-crisis
fundraising takes hit
$7b
$5.3b
$10.6b
FUNDRAISING
THROUGHOUT
CYCLES
Pre-crisis levels of capital are
yet to return to Africa, with
less than 3/4 raised in the last
2 years compared with the
2006-2008 period in the
region. Aggregate capital
raised in the years post-crisis
dropped by 50%.
2011-2012
2014-2015 YTD
2006-2008
WHAT CAN GPS DO TO
APPEAL TO LPS?
NARROW THE FOCUS
In the current fundraising
environment, it is critical for GPs to
avoid racing through funds to
maximize AUM. Investing and
delivering tangible results in Africa
takes time and your existing LPs
understand that.
GPs should continually look to evolve;
developing buy & build strategies,
building out specialist operational
teams, or narrowing scope into sector
specific strategies are all potential
strategic outlets for managers to
explore in the region.
What will ultimately win the day is
consistency—of team, strategy, and
ultimate returns to LPs. Africa needs
to build up the trust of the
international institutional LP base by
delivering consistent realized returns.
LP SOURCES
OF CAPITAL
SUB-SAHARAN AFRICA CONSISTENTLY RAISING LEAST
AMOUNT OF CAPITAL AMONG LEADING EMERGING
MARKETS
 In recent years, local capital
accounts for significantly less of
overall capital allocation to Africa
 Europe consistently contributes
roughly half total quantum of capital
to the region
 North America incrementally gaining
comfort in the region
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2011-2012
2014-2015
Source: Preqin: Historical Fundraising, Africa
Source: Preqin: Historical Fundraising, Africa
Yet this capital is split among greater number of funds
Source: Preqin: Funds: Fundraising Statistics; * Excludes GPs with HQ outside of the region investing in the region
Source: Preqin: Funds: Fundraising Statistics