We operate in a dynamic environment with cyclical occurrences and reasonably predictable events. Each cycle triggers different behavioural responses from clients, and the choice of instruments depends on the parameters favoured by the cycle. For example, as the earnings season approaches, investment-savvy clients seek market intelligence to enable them take strategic positions in stocks that have demonstrated potential for significant returns whilst employing strategies to hedge against downside risk. During this season, there is a high demand for equities. This ramps up activities for equities trading and complimentary capital market activities, as investors seek positions in stocks with sound fundamentals and good dividend-paying history with a view to maximize returns. In recent times, there has also been a surge in demand for treasury instruments as investors take advantage of the high interest rates. However, our corporate finance, project finance, and advisory activities are all year-round engagements since companies are constantly going through restructuring or raising funds. Our consultancy and training services, particularly risk management, and asset-management services are also year-round.
May. 12, 2019
Group CEO, Kedari Capital
Managing Director, Eczellon Capital
Our services are in two main divisions of corporate finance and advisory services. Corporate finance involves everything to do with financing and raising capital and is divided into capital markets and corporate finance. Teams working on the former deal with raising finance in Nigerian capital markets and across Africa. We have assisted governments and corporations on debt issues, be it new issues or restructuring of existing notes, and have advised on various equity issues for corporate businesses, including public offerings, both initial and follow, and private placements. The other division deals with private project financing and structured finance. Meanwhile, the advisory services division is grouped into financial advisory and business advisory services. We have advised and helped clients execute strategic initiatives such as mergers and acquisitions, capital restructuring, and many other initiatives to reposition themselves and enhance performance. Though we are sector agnostic, in recent times our transactions have been skewed to a few sectors. Since 2016, for example, we have been engaged in public sector and PPP capital market issues. In the corporate private sector, we have had mandates in automotive manufacturing, financial services, oil and gas, power, and education.
Managing Partner & Co-Founder, Verod Capital
Verod is a private equity firm investing predominantly in SMEs in Nigeria and Ghana. We started about 10 years ago and have made close to 16 investments to date and aggregate our investments in portfolios or funds. Our first portfolio has a vintage of 2008, and by 2013 we had invested in eight companies at a total of USD50 million. In 2014, we raised our first institutional fund, the Verod Growth Capital Fund II, which had commitments of about USD115 million. We have invested significantly across the consumer goods space as well as the education, healthcare, manufacturing, financial services, and agribusiness sectors. We invest in bread and butter consumer products and sectors that touch everyday Nigerian and Ghanaian consumers. We do not invest in areas such as oil and gas, which are significantly larger transactions and involve a commodity risk. Nor do we invest in real estate, a different asset class. We have been particularly active in education, where we have invested in K-12 schools in Nigeria and a university in Ghana, which also includes investing in teachers and professors. We have also invested in pharmaceuticals.
CEO, Nigeria Renaissance Capital
We are in what looks like the second year of recovery, and we have registered progress that merits optimism. However, the reality is that we are comparing with a low base, and if you take an absolute base, that optimism should be tempered. To a great extent, 2018 was in a wait-and-see year due to the election season. Now that the political situation seems clearer, we hope to see a stir up in M&A and capital market activity. That being said, Nigeria does have an advantage over other frontier markets thanks to its current account surplus, and the economy has benefited from favorable oil prices throughout 2018 as the oil and gas sector remains the main driver of the economy. Growing foreign currency reserves and domestic products make position Nigeria well for further progress. While there are many companies with “firepower” looking for assets, there has been a significant gap between bids and asking prices, which explains the lack of M&A action in the oil and gas sectors. That said, we do see opportunities in the space.
Group Managing Director, Afrinvest
Our strategy to give our clients more access to the market is technology. While we can argue that the capital market is not that liquid or people are not interested, the biggest challenge is really one of getting the investment opportunities in front of people in a convenient and cost-effective manner. The target investors, the millennials, do not want to come to branches; they want to do it from their smartphones. The bottom line is we are investing in technology that allows us to talk to our customers in a manner that they are used to. Afrinvest made a commitment in 2017 to invest in an IT platform and develop an app that allows any client of Afrinvest to log in and see their investments. We also want the app to allow customers to view both their brokerage and asset management portfolios. While the brokerage account is run by Afrinvest Securities, the asset management account is run by Afrinvest Asset Management.