UK
Whether you call this a ‘downturn’, a ‘readjustment’, or on the verge of ‘depression’, is neither here nor there. The sentiment is the same: Europe is struggling. There are still some exceptions to the rule: mezzanine finance, debt origination (well, if you can raise it people want it) and private equity are taking up the slack.
But where should you be looking if you really want the opportunities? Dubai? Sovereign states generally? We have found that although the market in UAE, Oman, Qatar, etc. is very strong and the rewards pretty high, the real excitement is in Africa.
Why? Africa is the Middle East five to 10 years ago. There is an extensive array of opportunities, some with high socio and economic risks attached, but others with relatively low risk and stable business environments in which there are minimal financing abilities.
These are the areas our clients seem really to be looking at seriously: the players in these markets now will be the established players there in five to 10 years’ time. The old-school businesses with a big aversion to risk are avoiding this area, so now is the time for small and middle-tier players to make a name in the market.
The field is open. There are established players who have been there for several years, but the really exciting businesses are those making four to five times returns on investments. These are the new players who are driving from the front with a different attitude to investment (several businesses actually invest with a concern for the environment and the people!).
These ideas are what will differentiate them from the competition in Africa and give them a better name than their UK counterparts in the private equity field, let alone the traditional investment banks.
So now is the time to get in, before the investment banks (with one or two notable exceptions) realise that they should be in there too.
Andrew Pringle is director of CircleSquare Consulting.
Africa? What weed were you smoking last night ?
As a matter of fact, Africa is a continent of interest to more than one area of Financial Services. Many Private Banks are looking at Africa with an increasingly attentive eye and factoring this market in their growth strategies.
It is, however, a very complex continent and lumbering this variety of markets and economies under one name is misleading.
I’d agree. I was in Africa earlier this year and shocked at the number of ex-pats out there working with large US & Eurpean firms. There may not ne as much wealth (or opportuinities) as the middle east at the moment. But the ex-pats seem to be living a much more enjoyable lifestyle than some of their peers in other countries
This has to be one of the most thoughtful and intelligent articles I have read on efinancials in a long while. At last a journalist on efinancials who actually reports whats going on in the world of finance & trade.
How much were you paid to write that KWM?
Bloomberg news channel featured a British lawyer who moved from Dubai to Tanzania due to the high cost of living in Dubai. There may be no tax, but foreigners have to pay a levy on gas and electricity bills that is basically as high as income tax. The place seems overrated.
The Chinese seem to be having their way in Africa at the moment!
So by virtue of not being Europe, America, Middle East, Latam or Aspac Africa must be the next big thing in finance? And not one actual company name mentioned. Somewhat suspect.
How about a few examples?
Guys, how much Russian Renaissance Capital paid you? It is the only bank that looks at that region. I have no objections against Africa, but you guys, i mean the article is pathetic.. btw you know what Rencap tells its staff? Since GS and MS have become regulated banks, they are the biggest investment banking group (with broker dealer) in the world! lol! I like their optimism you know, especially that they had to sell a stake at a firesale price recently.. they also claim following Lehman collapse bankers became cheaper to get. Is this right thing to tell? cheers
That’s all very well….if RenCap survives to the end of this week… looking more and more unlikely I’d say
what a load of cobblers.
Sub Saharan Africa can only get better because it consistently comes bottom on all socio-economic surveys.
Unstable, precious few resources, no infrastructure and grim. Speaking as somebody who’s been there I can tell you that this is no power house of the future!
Glad I’m not paying for CircleSquare’s advice!! What’s next, tell us to by into structured mortgage products?
Well most of the comments seem based on perceptions rather than facts; as one who has been here for the past 4+ years, I can tell you that this region is waiting to happen. Yes, there are huge gaps in terms of readiness, but the corrections are starting to happen and will soon snowball, creating opportunities all over. As Vijay Mahajan seems to be telling us in his latest book, the next decade 2011-2020 should belong to this region.
Well there is one country which is doing well and the middle class and rich live better life than any country in the world.It is South africa,a european outpost in someways with some 700000 people there with british passports.The economy has been growing by 5% per year for while now.Polotically who knows,the ANC might split which would be good.
Having lived in africa for 20+ years I would say I am in a decent place to comment.
Africa can never move forward until corruption is squashed, but I dont see that happening soon. The next president of South Africa didnt even get to secondary school. Awesome.
africa is a great place, with fantastic scenery and is probably the most valuable piece of real estate on the planet, although that may not being say much in the current climate. But I wouldnt go there if you want sleep peacefully at night. Africa is not for sissies.If you want o live in your own self made prison, to worry about your wife and kids being safe when you are not with them, just not worth it. I wouldnt compare it to the middle east, they dont take crime there. africa is run by criminals on the other hand. even the police are corrupt.
good luck to all that venture there. I hope africa proves me wrong.
from my experiences of both continents, negative perceptions of Africa is a past time preoccupation of the Europe and America. Come to Africa and see the banks that have taken the high risks and reaping the rewards ! Furthermore, with the oil producing economies in africa growing at an average rate of 7% p.a where else do youn see that other than india and China !
Speaking as a Ghanaian living and working in London currently, I have to say that there are pros and cons relating to Africa as the next big thing.
Howvere, its a very unsaturated market. It’s actually the only place that I know of where you can pick an idea from Europe, replicate it and reap vast rewards!
The standard of living is very low as compared to Europe. There are a lot of big banks operating outside Ghana for instance (Barclays, SocGen etc) and they have a huge number if expatriates working in the country, who have a good life, are free to go and come as they please.
Of course, crime is there just as anywhere else, but you need to know where to go and where not to go, keep a low profile and enjoy the country.
In the last year I went back home, I have seen growth at an alarming pace…new buildings, facilities, advertisements everywhere, the increase in the number of US and European investment houses, locals with good education being paid in dollars (sometimes to the European pay equivalent but at a fraction of the costs here) and a great increase in entrepreneurs and millionaires.
investors who want to tripple profit within the shortest possible time. No wonder many financial institutions and manufacturing companies to mention a few , are migrating from their original homes in the Europe and America to Africa in other to maximise profit to escape economic crises on going in their original home countries. In Africa, the future of your investment is much brighter.
In fact a peacefull and democratic country like Ghana among other similar promising countries in Africa are very good grounds for investors who want to tripple profit within the shortest possible time. No wonder many financial institutions and manufacturing companies to mention a few , are migrating from their original homes in the Europe and America to Africa in other to maximise profit to escape economic crises on going in their original home countries. In Africa, the future of your investment is much brighter.
Pathetic article. I’m a HH and i know babble when i see it. Any facts?