Interview with Laurent Demey (Amethis Finance Managing Partner)

Amethis Finance, created by Luc Rigouzzo and Laurent Demey, an investment company dedicated to Africa, aims to support growing African countries over the long term, by supplying them with a full range of long-term products from debt to equity. 

Created in 2012, Amethis Finance has quickly distinguished itself from conventional investment funds. At the heart of your strategy is long-term thinking. 

This long-term vision is not specific to Amethis, but it is at the heart of our project. We also want to appear, and this term is important to us, as a “partner” for the companies we support. To this end, we only take minority positions, alongside often family-run companies to support them, without calling into question the role of the family and management that have led it to success.

This innovative approach has attracted a great many investors, all private, whether banking, institutional, European or American. In our long-term vision and the diversity of our approach they have seen an appropriate response to Africa’s current needs, and the ideal way of tapping into African growth in all its components.

This shareholder make-up is in itself an innovation, with Amethis being one of the few investment funds in Africa with wholly private shareholders, and mostly held by entrepreneurs. Our partner Rothschild is the main example. Our overarching ambition is to create a major, private player in the long-term financing of Africa.

You say that you have managed to achieve private and ethical financing. In what way?

Africa sometimes suffers from a bad reputation, unfairly, in this respect. It seems to us, having spent over 20 years investing in the continent, that ethics and profitable investment are not at all mutually exclusive, quite the reverse. It is impossible to invest profitably over the long term without complying with the best environmental, social and governance regulations.

Beyond our personal convictions, which are deeply held and founded on our previous experience, this respect for and compliance with the most ambitious regulations is a guarantee of long-term solvency for an investment and a very profitable stake over time. We are therefore extremely strict about these issues, and the concern is completely shared by our partner Rothschild and our shareholders.

Is your USP also the “one-stop shop”, or, in other words, a collaborative effort that ultimately goes well beyond mere financing?

Yes, absolutely. We feel that African finance is developing in silos, with capital investors, senior lenders, junior lenders, consultants, etc. while African companies, i.e. their “customers”, have global long-term financing and collaborative needs. Our previous experience has taught us when an integrated approach can foster a dialogue and enhanced support for companies, which need flexible contacts who are able to adapt to their needs.

We therefore created Amethis, an investment fund, with the desire to be able both to provide and make available long-term financing tools, as well as support companies in their development by putting them at the centre of a business network. This network is made up of our previous contacts having been nurtured from over 20 years working in Africa, and also our shareholders: private companies, banks, entrepreneurs and our partner Rothschild.

Your strength comes from your partnerships, and not insignificant ones. You mentioned the Benjamin de Rothschild Company among others. What do you bring to their table and vice-versa?

The Benjamin de Rothschild Company is part of the Edmond de Rothschild Group, directed by Benjamin and Ariane de Rothschild. Within this partnership we have found a group and a family that has been established and committed to Africa for a long time (the Baroness grew up there) and been convinced of its growth and its potential on the continent.

Together we share values of long termism, strong environmental, social and governance requirements, and a vision of what Amethis can become.  This partnership, without which Amethis would not exist, shows the ability that the great entrepreneurial families have to plan long-term projects and support the continent’s development.

2013 was a year where your power rose through three equity investments in Africa. Why did you decide to concentrate your development outlook on the African continent?

We have since added a fourth equity investment, in Fidelity Bank, the sixth main Ghanaian bank. The decision we made to concentrate on Africa stems from two considerations: first of all, a personal consideration. We grew up in Africa and have devoted the core of our career to it, and we are passionate about the continent, a passion shared by our Rothschild partners. Amethis is the logical outcome of this trajectory.

The second consideration is totally pragmatic: Africa is the continent that is seeing, and will see, over the next few years, the greatest growth, and this undoubtedly offers the best investment opportunities.

This deep change is due principally to the development of its demography on the one hand, and to the structural adjustment and democratisation processes of the 1990s, which are delivering results on the other. Africa, or at least a large part of it, has become an urbanised continent, where an ever-growing middle class is gaining access to consumption tools already available in Asia and Latin America.

This continent of opportunity is still relatively unknown, and, wrongly, still arouses hesitation among foreign investors. Amethis’s role is to act as a bridge between Western (American and Mediterranean) investors and the African continent.

What roles can financing funds justifiably play in the continent’s development?

An extremely important role, for several reasons. The first reason is the African companies’ growing need for financing, against a backdrop of strong growth. African companies, often family run, currently face an explosion in demand and the ever-stronger globalisation of their markets. Bank financing alone is not enough. It has become necessary to increase their capital, often by significant proportions.

Families who have founded companies no longer have the means to meet these needs and must look towards external investors, who are investment funds. From this purely financial need stems other needs, which are of equal importance: by changing size and markets, these African companies must often reinvent themselves, adapt their governance structures, their control mechanisms, access new partner and customer networks, etc.

Investment funds bring both the money required and an involvement in the company; a wealth of experience and networks, which help companies to take the next step as they grow.