The African continent, as an emerging and relatively underdeveloped market, displays a significant lag in investment, particularly in primary sectors such as infrastructure. This presents a unique opportunity for investors with a focused approach wanting to generate superior returns, says private-equity business Agile Capital CEO Tshego Sefolo.
However, he notes that research and development (R&D) initiatives to gauge investment safety, trade and investment opportunities and associated legislation, as well as bureaucracy, are critical for business in Africa, as these provide a framework for investment in the various markets on the continent.
“One of the issues that becomes apparent for an investor is that African countries are not homogenous and present country-specific risks, such as political or financial risks. In some instances, safety R&D, ensuring that there is proper legislation in the country to safeguard investors, is required. This is something that we are passionate about and continue to support where possible,” notes Sefolo.
The most challenging issue regarding investing in the continent is mitigating investment risk in markets where a business does not have any geographic presence as an investor. “You cannot manage investments by remote control. You need to be involved or, alternatively, partner with trusted associates”.
Despite the current challenging economic environment, Agile Capital continues to see growth in some sectors of the economy on the African continent, including in energy and environmental management services.
“With a disciplined approach to investing, investors can still generate superior returns. This, however, needs to be accompanied by a robust risk management approach, coupled with Agile management teams who are able to navigate tough trading environments in a competitive landscape,” Sefolo maintains.
Agile Capital, as a diversified investment company has, of late, invested aggressively in the specialised environmental management sector. “With increased consciousness towards the environment, this will prove to be compelling,” he outlines.
Also, the company is exploring a number of other investments, particularly in the services sector. Sefolo notes that such businesses, if well positioned, could be significantly scaled up to become more dominant players in the various markets.
“We are aggressively looking for investment opportunities through our recently raised R500-million, which is a private-equity fund. Owing to this, we are able to conclude investments in diversified sectors in the economy. Our approach is to invest in business with good growth potential, coupled with a demonstrable record of outperformance,” he concludes.