The Street Notes Recent ‘Boost’ From Africa

A recent article from The Street notes the recent boost which investors have seen from funds which are invested in Africa and the Middle East, noting that many of the economies in these regions are ‘booming.’

The article highlights the fact that:

“Boosted by high oil prices, petroleum producers are enjoying some of the best results… In addition, consumer companies are achieving record sales as millions of people leave impoverished villages and join the urban middle class. In 2011, Sub-Saharan Africa grew 4.9%, and the World Banks says that the region should grow 5.3% this year.”

We at Nile Capital Management believe that this strong growth represents the ‘new normal’ for Africa for many years to come.  Given the dual economic drivers of natural resource demand and an expanding consumer class, we believe that the economic growth in many of Africa’s nations will remain strong. 

In addition, the article points out that:

“The recent strong showing of African stocks represents a big change from last year. Markets throughout the region plummeted early in 2011 as investors feared that the protests of the Arab Spring would spread and disrupt businesses. Stocks suffered again when the European crisis intensified in the summer, and investors lost their appetite for risky shares in the emerging markets. Lately the fears have dissipated as investors worry less about instability in Europe and the Middle East.”

2011 was undoubtedly a challenging year from a geopolitical perspective.  However, we continue to feel strongly that Africa’s growth trajectory remains unchanged, and that now is an excellent time to invest there.  In fact, it is interesting to note that the challenges that Africa’s markets saw in 2011 largely came from outside factors.  Despite that, growth in Sub-Saharan Africa in particular remained strong.

Finally, the article highlights a handful of opportunities which Nile Capital Management finds particularly compelling, especially from a valuation standpoint.  To read more about some of the value opportunities we see in Africa, please request a copy of our most recent White Paper “Digging Deeper into Valuations in Africa” from our research library.

For more information, please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown

Brazilian Firm Announces Largest Africa-Focused Private Equity Fund To Date

In recent articles in Forbes and the Wall Street Journal it was announced that Brazilian investment firm BTG Pactual is launching the largest private equity fund to focus on Africa to date.  With  a $1BN mandate, the fund expects to invest in areas such as infrastructure and energy, and will be open to domestic and international investors alike. 

This announcement comes on the heels of similar interest from firms like Helios and Carlyle, who have recently raised $900MM and $500MM funds respectively to focus on the continent.  These and other funds are indicative of the growing interest amongst the investment community in opportunities across Africa, and have positive implications for the growth of many key businesses and sectors – many of which we follow as well.

For more information about investing in Africa please contact Nile Capital Management at 646-367-2820 or info@nilecapital.com

Nile Capital Management – We know Africa: From Cairo to Cape Town

New York Times Highlights Looking to Frontier Markets for 'Next Big Thing'

A recent article in the New York Times ("Looking to Frontier Markets for Next Big Thing in Investing") has once again highlighted the opportunity which investors are noticing for investing in frontier markets in general, and Africa in particular.  The article notes that:

"The difficulty with investing in the next big thing is that it is often not recognized as that until after it has become a current or former big thing. Before its arrival, it tends to be seen only as a crazy, risky thing or nothing at all."

But also points out that:

"the case for the region and frontier markets elsewhere is precisely that they have just set out on the path to economic and social progress and still have a long way to go. That is the same journey made by the big emerging economies of today. It’s barely four decades since Chinese farms were decollectivized, for instance, and less than two decades since Brazilian inflation was running at more than 40 percent a month."

In addition, the article highlights the three themes which Nile Capital Management's team focuses on, noting that: 

"Whenever other investors decide to join them, there are three themes that fund managers expect to drive returns for years to come: growth of a middle-class consumer society, with all the products and services that are its trappings; production and export of natural resources; and development of infrastructure, including the transportation and communication networks required for the success of companies involved in the other two themes."

We would encourage you to read the article, which again can be found here.

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown   

Nile Capital Management Featured on CNBC: Africa is "Single Best" Equity Region

Larry Seruma, CIO & Managing Principal, Nile Capital Management LLC digs deeper into investing in Africa in a recent CNBC interview. He explains the difference between the valuation matrix of Africa's vast resources and that of other large countries like Russia and Canada. He also tells us why he's positive on the continent.

Click here to watch the interview.

For more information please contact Nile Capital Management at info@nilecapital.com or 646-367-2820.

Nile Capital Management - We Know Africa: From Cairo to Capetown