Enormous, diverse, rich in resources but historically underserved and overlooked by the financial services sector, Africa has a Muslim population of over 400 million. A nascent Islamic finance industry is gradually emerging across the continent, invigorated by the strengthening of economic links and increased trade between Africa and the rest of the world. – with the Middle East especially playing an important role in bringing vital investment into rapidly developing countries. Patrick Colegrave and Joanna Hossack look at the current climate for the industry, and how this can continue and increase in the coming years.
Raymond Davern, Dennis Ryan and David Pytches look at the ways in which the various types of trust products in each jurisdiction may be of interest to MENA families as succession planning vehicles.
Basheer Oshodi believes that the Islamic finance global growth of over 15% per annum may not make much impact in Africa if the continent is unable to solve its poverty challenges.
There has been much talk of the poor performance of Africa’s development and governance indicators when compared to other regions. Attention has also been focused on Africa’s poor performance in meeting the Millennium Development Goals and the inability of the region to meet its 2015 targets. Others have stressed the national economic empowerment and development strategy: designed to implement economic and institutional reforms, poverty alleviation, wealth creation, employment generation and value reorientation.
The most important initial decisions for an investor are whether a hedge fund allocation is suitable for their portfolio and, if so, what the size of the allocation should be. It would be prudent to obtain expert financial advice when making this decision. The next step is how to access the opportunity set of available hedge funds, and here investors can choose to invest directly in one or more single-manager hedge funds, or use the multi-manager approach and invest in a fund of hedge funds. A fund of hedge funds is a diversified portfolio of individual hedge funds.
Private equity investment in Africa has been active for many years, with solid track records emerging in the last decade. The most successful deployment of private equity in Africa has applied best practices, including identifying risks, defining the path to liquidity, and anticipating changes in judicial and regulatory frameworks. Understanding these factors is critical to ensuring that private equity investments in Africa will generate attractive returns over time.
As the pace of business in the Middle East and North Africa accelerates, family businesses are looking to raise funds, sell out, restructure or offload non-core assets. Deregulation is opening new opportunities for Greenfield investment. Governments are increasingly willing to divest assets in privatisation sales. The list goes on.
Going forward, this means a growing number of private equity deals will originate from situations in which trust, transparency and good corporate governance are vital. As origination streams diversify beyond the usual sources, savvy industry players will embrace the reality that the full alignment of interests of all parties is becoming the key to sustainable growth.
With limited partner interest increasing towards Africa as a whole, it’s hardly surprising that West Africa is seeing a dramatic increase in funds being raised for investment there. It is, according to CDC investment manager and Togo national Jean-Marc Savi de Tove, “one of the most dynamic regions in Africa”.
Real estate in India is a classic bubble, even though the real estate folks might not want to believe this. Like in the last days of the dot.com boom, real estate developers tend to dismiss you and say ‘you don’t get it’ if you ask them tough questions.” This is the view of Gaurav Dalmia, founder and chairman of Landmark Holdings, who interestingly enough is a financial investor in real estate projects.
We asked 16 managers, based around the world and overseeing absolute return Asia Pacific strategies, their views of where is the best location to establish a hedge fund. We gave each of them the same 12 questions (reproduced below), which centered on the investment process and capital raising. Their answers were remarkably similar, suggesting that there may be a clear formula which new, and arguably some established, managers should follow.