As a former employee of Proparco, like the other Amethis Finance founders, you joined the company in April 2013 as Investment Director. In other words, you are in charge of sniffing out bargains.
Not necessarily sniffing out bargains, but rather setting out Amethis’ strategy in the financial sector in sub-Saharan Africa and to identify attractive investment opportunities there. We have already made three investments in the banking sector. Our strategy really spans across the financial sector and we thus aim at investing in the insurance, brokerage, and financial services sectors. The diversified range of instruments that we can offer, as well as our long-term vision, ensure a certain flexibility in our approach and increase our attractiveness to the players in these sectors. However, we must insure a certain consistency in the constitution of our portfolio and in the identification of our targets. Creating long-term added value as well as synergies between companies in our portfolio is the main driver in our investment strategy in the financial sector. The selection of our targets as well as the type of investment we offer them must respond above all to these criteria. Our approach is truly pan-African: we do not confine ourselves to set geographical areas but rather we search for targets that are well-established in their domestic market, with strong growth potential, and distinguished by their positioning.
The banking and financial sector, in full swing on the continent, is of specific interest to Amethis…
The African continent is today characterised by strong population growth and above all by an emerging urban middle class, developing various consumption needs away from basic necessities. However, this part of the population is generally excluded from classic financial services. Banking penetration rates in sub-Saharan Africa are amongst the lowest in the World. The growth potential for the sector is therefore promising.
Our strategy will be based on two pillars. Firstly, an active stake in companies with strong growth potential through minority equity investments, but with a strong involvement on our part in the governance of these companies so as to foster long term value creation. Our aim is thus to help them strengthen their positioning and support their local or regional growth. The second pillar of our strategy in this sector will be based on providing long term debt financing to financial institutions in order to provide them with the resources required to expand their business operations and activities.
To that end you have just concluded a deal with Edmond de Rothschild Europportunities Management II (“ERES”) to acquire a minority stake in Fidelity Bank Ghana Limited…
This deal perfectly illustrates our strategy in the sub-Saharan African banking and financial sector. Fidelity Bank is the sixth largest bank in the Ghanaian banking sector (in terms of deposits), characterised by strong growth and with niche positioning. Our aim is therefore to support the bank as it grows and in its ambition to become a real national champion. This deal, which we see as a real long-term partnership, is very important to us, and for several reasons: our ability to have been able to gain the confidence of the Edmond de Rothschild Group on this investment, which is the first for the Group in Africa; the positioning, the performances and the visibility of Fidelity, which make it one of the best Ghanaian banks with a significant growth potential; the added value that we are going to bring through our network and our expertise in the sub-Saharan African banking sector as well as the Edmond de Rothschild Group’s contribution to support the bank in the development of new initiatives and activities.
The deal, amounting to a total of around USD 70 million (of which our contribution with the Edmond de Rothschild Group is around USD 35 million), further constitutes one of the largest fundraising ever completed in the Banking sector in West Africa (outside of Nigeria) and thus symbolises the emergence of the banking sector on the continent.
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