Urbanisation in Africa will increase significantly, compared with the rest of the world, and this will result in several significant investment opportunities, says fully black-owned private-equity company Agile Capital CEO Tshego Sefolo.
These investment opportunities will manifest in the telephony, electrification, accommodation, education, infrastructure and retail sectors, which “will make for a compelling investment proposition for any long-term investor looking to generate superior returns”, he tells Engineering News.
Agile Capital is actively looking to invest in new opportunities in Africa if the company finds “the right business”.
Sefolo points out that, for Agile Capital, the right business should meet the company’s investment criteria – the size of the business is critical, and businesses with earnings before interest, taxes, depreciation and amortisation of more than R40-million will be considered.
The company’s investment approach is premised on the key investment pillars of investing in businesses with sustainable records; supporting entrepreneurial management teams; investing in high-margin, cash-generating businesses; and businesses with demonstrable and tangible growth prospects.
“Agile Capital has aggressively pursued investments north of our borders through our portfolio of companies. Our approach is to partner with local operators in the markets we have penetrated using the skills and expertise we developed in South Africa,” highlights Sefolo.
The company is considering opportunities in the services sector, medical industry, specialised manufacturing industry and automotive industry. Further, he points out that Agile Capital has recently observed interesting investment opportunities in the media sectors in Nigeria, Ghana, the Democratic Republic of Congo and Tanzania, which the company will explore.
Some of the challenges Agile Capital faces when doing business in Africa include finding the right investment partners and, ultimately, building a long-term investment history with them.
The regulatory frameworks in some African markets, such as challenging taxation requirements where enforcement of the law and achieving consensus with regulators are not always straightforward, as well as the legitimate repatriation of proceeds, are also challenging, he adds.
“. . . we mitigate these challenges by being proactive and partnering with local businesses in respective markets to ensure that we navigate some of the potential challenges presented.”
Agile Capital’s medium- to long-term plan is to deploy capital while ensuring that it remains disciplined in the selection of assets in which to invest in.