Today’s Top Entrepreneurship and Business Stories (29 June)
Funding Show For Entrepreneurs Returns To Riversands
Riversands Incubation Hub is set to host its second FundEX event at Riversands on Thursday 17 August 2017.
The inaugural FundEX held in November 2016 attracted more than 500 entrepreneurs seeking practical advice on securing funding for their business. This year’s one-day conference and expo builds on last year’s success and will once again highlight funding opportunities available from banks, government funders and alternative funding platforms.
“Access to finance remains a major frustration and growth inhibitor for small business. Yet, there is funding available. This event aims to provide guidance for entrepreneurs on what finance is available, what funders are looking for and how to better prepare for funding. While Riversands does not provide funding whatsoever, we believe that we can play a role in bringing together many players in the funding space,” says Jenny Retief, CEO of Riversands Incubation Hub.
Also back due to popular demand is the funders lounge where entrepreneurs book a one-on-one consultation with a funding expert. “Despite the array of information online, speaking to a funder face-to-face is incredibly valuable. We are looking to extend the funders lounge in 2017 to accommodate more entrepreneurs.” Appointments with funders can be booked on the day, with the lounge opening at 10h00 and running to 15h00.
The one-day event runs from 9am to 5pm and is open to the public, with tickets available online at http://www.fundex.co.za with tickets priced at R200 per head.
Capital Returned To Private Equity Investors More Than Double – SAVCA 2017 Private Equity Industry Survey
South African private equity capital returns to investors increased by 123.2% in 2016 to R18.3 billion, up from R8.2 billion the previous year. This was one of the most significant themes reported in the SAVCA 2017 Private Equity Industry Survey, the annual survey of private equity activity in Southern Africa which was released to the industry on 28 June 2017.
CEO of the Southern African Venture Capital and Private Equity Association (SAVCA), Tanya van Lill, said that over the period, trade sales were reported as the most popular exit route in value terms whilst sales to management were the most popular by volume. “The average proceeds per exit was R176.3 million in 2016, compared to R48.1 million in 2015. Realisations (returns to investors) in 2016 reflected a times money multiple of 2.0, an increase of 1.4 times reported in 2015.”
To obtain survey results, SAVCA, along with research partner KPMG South Africa, surveyed 61 managers, representing 96 funds, with a mandate to invest in South Africa and in other African markets.
The SAVCA 2017 Private Equity Industry Survey results also revealed that Southern Africa’s private equity industry, including both government and private funds, had R171.8 billion in funds under management at the end of 2016, an increase from R158.5 billion in 2015. Of these funds under management in 2016, R58.2 billion is available for investments, of which R7.4 billion is for early stage investments.
Van Lill says that this growth in funds under management represents a compound annual growth rate of 11.4% since 1999, when the SAVCA survey first began. “This growth is reflective of a growing industry and an increased interest from investors to invest in South African private equity.”
The cost of investments made during 2016, analysed by new and follow-on investments, totalled R15.5 billion – up from the R12.5 billion reported in 2015. Of the investments made during 2016 (574) and classified into sectors by value, 14.2% were in the real estate sector, 11.0% in the information technology sector, 11.0% were in the energy sector, 10.3% in the services sector and 9.7% in the manufacturing sector.
The average deal size for new investments was R29.5 million, while average deal size for follow-on investments was R23.3 million.
In terms of fund raising activity, the total of third-party funds raised by the industry in Southern Africa in 2016 reached R10.2 billion, a significant decrease from the R27.5 billion reported for 2015. By regional source, R7.5 billion (73.5%) of total funds raised in 2016 were from South African sources (2015: 28.4%).
McKinsey’s Latest Report Shows China’s Economic Involvement In Africa Bigger Than Previously Reported
China is Africa’s largest economic partner, and a new report by McKinsey Africa finds that its involvement is bigger and more multifaceted than previous studies suggest.
Through a study conducted across eight countries that together make up about two-thirds of Sub-Saharan Africa’s GDP, the report finds that there are already over 10,000 Chinese firms operating in Africa—four times the previous estimate. About 90 percent of these are private firms, of all sizes and operating in diverse sectors, with about a third in manufacturing. These firms are bringing capital investment, management know-how and entrepreneurial energy to the continent, and in so doing, are helping to accelerate the progress of Africa’s economies.
Across trade, investment, infrastructure, financing and aid, China is a top five partner to Africa—no other country matches this level of engagement. The China-Africa relationship has ramped up over the past decade with trade growing at around 20 percent per annum. FDI has grown even faster—at an annual growth rate of 40 percent. China’s financial flows to Africa are 15 percent larger than official figures suggest when nontraditional flows are included. China is also a large and fast-growing source of aid and the largest source of infrastructure financing, supporting many of Africa’s most ambitious infrastructure developments in recent years.
Operating across many sectors of the African economy, in addition to manufacturing, a quarter is in services and a fifth in trade and in construction and real estate. Chinese firms already handle 12% of Africa’s industrial production—valued at $500 billion a year in total. In infrastructure, Chinese firms’ dominance is even more pronounced, having cornered nearly 50 percent market share of Africa’s international EPC (engineering, procurement and construction) market. Chinese firms are making healthy profits.
Nearly a quarter of the 1000 firms surveyed said they covered their initial investment within a year or less. A third recorded profit margins of over 20 percent. These firms are agile and quick to respond to new opportunities. They are primarily focused on serving the needs of Africa’s fast-growing markets rather than on exports. Chinese firms have made investments that represent a long-term commitment to Africa. Of the Chinese firms surveyed, 74 percent said that they are optimistic about their future in Africa. (via APO)
Tap Into Diaspora’s Economy To Boost Intra-African Trade, Says Afreximbank
African Export-Import Bank (Afreximbank) president, Benedict Oramah, said on Wednesday that the African diaspora constituted a large economy outside the continent, and that Africa needed to develop strategies to attract it back into trading within its borders.
Oramah decried the lack of market knowledge stating that it was a challenge for African countries, hence they were missing out on vast economic and trade opportunities with their neighbouring countries.
“We want to expand trade within Africa and with Africans in the diaspora. In fact, we must take the diaspora as the 55th country of Africa,” Oramah said.
“We need to integrate 16 million Africans in the diaspora who generate U.S.$63 billion in remittances for the continent and save U.S.$50 billion annually. We want to bring that economy back to Africa.”
Oramah was speaking during the opening of Afreximbank’s 24th Annual General Meeting (AGM) under the theme “Trade as a catalyst for industrialising Africa” in Kigali, Rwanda.
Trade growth spells are shorter and few and far between in Africa. At 15 percent, intra-African trade represents the lowest regional trade figures compared to 62 percent in Europe and 45 percent in Asia.
Oramah said that intra-Africa trade currently being conducted informally was worth between U.S.$40 billion to U.S.$60 billion a year, adding that Afreximbank wanted to make Africa relevant in the global arena by prioritising all sectors that boost intra-African trade.
“Declining demand for African commodities has left Africa vulnerable. We need diversification and structural transformation,” Denys Denya, executive vice president of Afreximbank, said.
“Afreximbank will support trade within Africa with its Resource Mobilisation Unit with U.S.$10 billion over five years to recover from commodity shock.”
Denya said Afreximbank’s new IMPACT 2021 Strategy would address old and new challenges facing African countries’ development.
Afreximbank has provided U.S.$155 million direct financing to Rwanda in support of various development projects, including financing industrial parks, aviation expansion, trade and the public sector. (via African News Agency)