Emerging Capital Markets in Africa Roelof Horne, Portfolio Manager Africa Investec Asset Management Oslo, September 2011
Investec Asset Management: A global specialist asset manager Investec Asset Management ● Founded in 1991 in Cape Town by current leadership ● Origins are African – presence and perspective is global ● Investment hubs in London & Cape Town ● US$94.3 billion in assets under management ● $38bn investments in Africa, 400 African employees
Investec Asset Management Offices
As at 31 March 2011 *Permanent employees Page 2 | CONFIDENTIAL
Which enables our dedicated teams to optimise opportunity ●
A substantial, experienced and diverse team of high quality: −
Substantial: 66 Investment Professionals focused on Africa
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Experienced: Collective investment experience of 700+ years (over half of which at IAM 390)
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Pan Africa Public Equity
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Proprietary and Fundamental Research
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Internal or External Sector Specialists
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Internal or External Political or Macro Specialists
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Other relationships
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South Africa & Global Fixed Income
AME Equity
We travel often to engage with owners & managers of businesses, as well as other stakeholders (i.e. government officials)
We evaluate investment opportunities by triangulating between
South Africa & Global Public Equity
MENA
Diverse: 14 nationalities, 11 languages, 6 locations
Lasting relationships and high quality networks can only be built over time, and in person −
Resource & Commodities
Specialist Co Investment Africa & EM
Pan Africa Credit
Sovereign Debt Pan Africa Private Equity Special Situations
There are Stock Exchanges from Cape to Cairo BVMAC planned for Gabon Angola stock exchange proposed Algeria re-vamping its bourse
Libya Morocco
Tunisia Egypt
Cape Verde
Sudan
Date established
Botswana
21
4
1989
BRVM
38
6
1998
Cameroon
2
–
2003
Egypt Uganda Kenya
BRVM Cameroon
Benin Rwanda
Burkina Faso
Tanzania
Guinea Bissau
Cote D’Ivoire Zambia Malawi Mali Niger
Market Capitalisation (US$ Billion)
Cape Verde
Nigeria
Ghana
Number of companies
BotswanaZimbabwe Namibia Moçambique
Senegal
Swaziland
Mauritius
2005 1888
30
3
1991
Kenya
55
12
1954
Malawi
14
2
1996
Mauritius
87
9
1989
Morocco
73
67
1929
Namibia
7
1
1992
Nigeria
208
51
1960
South Africa
389
515
1887
5
0.2
1999
Swaziland Tanzania
12
1
1998
Tunisia
57
9
1969
Uganda
7
1
1998
Zambia
29
2
1994
86
4
1974
1,402
766
Total South Africa
Source: Bloomberg and African Alliance Securities Research, 30 June 2011. Market Cap has been rounded to the nearest $1bn Page 4 | CONFIDENTIAL
– 70
Ghana
Zimbabwe
Togo
4 278
Opportunities often arise from the structural characteristics of frontier markets Macro Economic Growth
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Microeconomic Environment
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Stock Market Characteristics
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Our Investment Approach
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Returns
● We believe African markets are: − underpenetrated with less competition − under leveraged (on country, company and consumer level) − have a fast growing demand for goods and services ● There are high barriers to entry for operators (for the time being) − limited competition among many leading corporate suppliers − yielding both pricing power and volume growth − thus potential for faster than average profit growth and high return on equity ● And also high barriers to entry for investors (for the time being) − Information − Travel − Accommodation − Visas
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