Atta Africa Financial Update

Key commercial and political activity in Africa for private equity investors by DCE Partners, UK Private Equity advisors to Atta.

Executive summary

We have often reiterated the wealth of opportunity that exists on the African continent - and we believe that the time is right for these opportunities to be realised and capitalised from both within and outside the boarders. Small and medium sized enterprise in Africa are mostly family-run, and play an important role in employment creation and economic development. In Africa, family-run businesses tend to be less formal or institutionalised than their counterparts in the developed economies. They sometimes lack the history, expertise and government support found in other parts of the world and as a result, these businesses have a tendency to be short lived and rarely pass to a second generation of owners. Moreover, and by definition, they do not always find it easy to secure capital and value adding partners.

However, the African economic landscape, business climate, communities and industries are in the midst of rapid transition which is unlocking new opportunities, consumer value, strategic challenges and competitiveness - driven in no small part by the increase in professional investors and capital providers on the continent.

Angola has created five new venture capital funds worth US$1.4 billion

  • The Angola Sovereign Fund has set up five venture capital funds for high-growth industries and the economic and social development of Angola and sub-Saharan Africa
  • Investments are to occur in the next three to five years in projects in the mining, logging, agriculture and health sectors
  • One of the funds structured as a mezzanine fund is intended to support entrepreneurs where financing through traditional debt does not apply, providing US$250 million over the next five years

Mauritius trying to establish itself as a centre for international arbitration

  • Arbitration is widely used as a means of dispute resolution in cross-border deals, preferred by investors to becoming entangled in domestic courts and arguments over jurisdiction
  • Mauritius, which has already established itself as a hub for financial flows and fund administration, is planning to move into the arbitration business
  • Now two years old, the Mauritius International Arbitration Centre (MIAC) aims to establish itself as an alternative for companies looking for an African centre for dispute resolution