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:This year’s Mining Indaba has been less buoyed compared to previous years.

Chinese government officials visiting South African gave away little about the Asian giant’s intent, instead focusing on what they said would be better times ahead in what is a highly-cyclical industry.

Zhao Caisheng, a division director at China’s national land and resources ministry, forecast a relatively optimistic outlook for mining, on the back of developed economies re-industrialising and increasing spending on capital projects, and emerging economies accelerating the industrialisation push.

It is a business-as-usual approach by Beijing that was visible at the summit with China seeking to reassure the continent’s mineral exporters that the turbulence has just been a bump in the road of their long-haul bilateral billion-dollar partnership.

But China is entering a ‘New Normal’ of medium-speed growth - the country is rebalancing towards a more consumption and services-heavy economy.

Kenya doing well to attract more investments

  • Kenya has in recent years seen a big increase in investment activity and deal interest
  • Certain sectors are active in the private equity and mergers and acquisitions space — fast-moving consumer goods, financial services (especially banks, microfinance and insurance companies) and manufacturing
  • The real estate and energy sectors have also seen significant activity. UK-based Old Mutual Property recently invested 6.4 billion Kenyan shillings (US$6.4m) in the holding company of Centum’s Two Rivers Mall

SA private equity resilient amid volatile financial market

  • The latest RisCura-SAVCA South African Private Equity Performance Report, which tracks industry data up to September 2015, reveals that, despite long-term returns retreating from the positive trend enjoyed in recent quarters, private equity continues to outperform listed equity over a ten-year period