African private equity lobby group adds advisers

The African Private Equity and Venture Capital Association has bolstered both its board and advisory council as fundraising for Africa-focused funds hit a six-year high.

AVCA has appointed advisers to its council and board

AVCA has appointed advisers to its council and board

The AVCA announced the appointment of Vicki Fuller, chief investment officer of the New York State Common Retirement Fund, to its advisory council as well as the appointment of Sev Vettivetpillai, partner at the Abraaj Group, to its board of directors.

The AVCA is the pan-African industry body, founded in 2000, responsible for promoting and enabling private investment in Africa. Its members are a combination of institutional investors including the European Investment Bank, private equity firms such as the Carlyle Group and professional service firms such as lawyers Clifford Chance.

Its advisory council is comprised of institutional investors who provide strategic leadership and advice to the association and the board. Meanwhile, its board of directors, which is largely made up of fund managers, overseas the day-to-day operations of the association.

At the New York State Common Retirement Fund, Fuller is responsible for developing and implementing investment strategies for the fund, which is the third-largest pension fund in the United States. The fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. It currently holds audited net assets of $ 184.5 billion, according to its most recent public filings made on March 31, 2015.

Vettivetpillai manages private equity firm the Abraaj Group’s sector-focused funds including healthcare, real estate and energy infrastructure. The Abraaj Group currently has $ 9 billion in assets and focuses on investing in the growth markets of Africa, Asia, Latin America and the Middle East. The private equity house held a final close of their Africa fund III on $ 990 million in April 2015.

The amount of capital raised by private equity funds with an African focus hit a six-year high in 2015, more than doubling from $ 1.9 billion in 2014 to $ 4.3 billion in 2015, according to a report released by the AVCA in February 2016. The largest fund to close was Helios Investors III, which held a final close on its $ 1.1 billion hard cap in January 2015.

This increased appetite from investors for the region was echoed by Fuller in a statement. She said: “Since joining [the AVCA], we [the New York State Common Retirement Fund] have increased our commitments, and are looking to do even more.”

The NYSCRF first joined the AVCA in 2015 after investing through a fund of funds in an Africa-focused fund. It has subsequently invested directly in two funds, a spokeswoman for the AVCA said.

The spike in fundraising should provide a boost to the number and size of deals done in the region after a weak 2015, in terms of the value of deals completed in the region. The total value of private equity deals in Africa fell from $ 8.1 billion in 2014 to $ 2.5 billion in 2015.

Nick Hughes, a partner at law firm Clifford Chance, said: “A closer look at the underlying data confirms that it was the absence of larger deals (above $ 250 million) which resulted in total 2015 deal value falling significantly, with the total value of smaller transactions actually increasing compared with 2014.”

He added: “Further oil price falls, geopolitical uncertainty and the devaluation of many emerging market currencies against the dollar impacted particularly strongly on South Africa and Nigeria, Africa’s two largest economies, which have together historically accounted for around half of the continent’s private equity activity.”

These events, coupled with the elections and a drawn-out cabinet appointment process in Nigeria, caused the largest private equity investors with dollar-based funds to adopt a “wait and see” approach during 2015, Hughes continued.

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