Emerging Capital Partners: Blue Chip Investing

Emerging Capital Partners has been investing in Africa since 2000 and has raised more than $1.8bn for investment in seven funds. It is based in the US but has employees working in Abidjan, Casablanca, Douala, Johannesburg, Lagos, Paris, Tunis and Washington DC, giving deep reach into African markets and including nationals from seven African countries. This enables the firm to gain superior insight into the region’s local economies and select companies to deliver exceptional returns.

The current funds which are still in commitment period include: ECP Africa Funds III ($613), ECP MENA Growth Fund ($150m), Moroccan Infrastructure Fund (MD800m) and ECP Africa Fund II ($523m). It is in post-commitment period with Central Africa Growth Sicar (€22m) and AIG African Infrastructure Fund ($407m). It has also exited one fund.

The track record includes over 50 investments, 20 exits which have generated an average of three times the invested capital, and investee companies operating in more than 40 countries.

The strategy is growth equity, with little reliance on leverage. ECP either takes a controlling stake or a significant minority shareholding and provides management and operational help, seeking companies that operate in business environments where there is limited competition or in sectors where Africa has either a comparative advantage or an unmet need.

This strategy keeps the investment portfolio diversified and provides investors with superior, risk-adjusted returns. The investments are roughly split 26% in financial services, 23% telecommunications, 21% natural resources and 8% each in utilities and agribusiness, with other investments including transport logistics and petrochemicals. ECP believes telecommunications and financial services still offer growth and that new opportunities are emerging in alternative energy and real estate.

ECP is a signatory to the United Nations’ Principles for Responsible Investment and says it “seeks to build extraordinary companies that will shape the future of Africa”. It has directly supported more than 50,000 jobs, boosting the development of technical and managerial skills and fostering workforce skills.

Companies it has invested in include telecommunications giants Celtel and MTN, fish processor Thunnus Overseas Group, financial services firms Group NSIA, Continental Re, and Financial Bank (now Oragroup), consumer products Société d’Articles Hygiéniques and entertainment and communications firm Wananchi Group. In June 2011, New African magazine voted co-CEO Vincent le Guennou one of the 100 Most Influential People of Africa.