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Private Equity in Africa A DFI Perspective Kevin Njiraini October 2010

2. *Does not include cancellations and write-offsAll figures based on portfolio as of March 31, 2010. Number of committed:Funds 161Fund Management Companies 16Investee companies>700$ Committed by IFCUS$ 2.7 billion Total Mobilized from investorsUS$ 25.2 billion (through t

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Private Equity in Africa A DFI Perspective Kevin Njiraini October 2010

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    1. Private Equity in Africa A DFI Perspective Kevin Njiraini October 2010

    2. 2 IFC Private Equity Funds – Global (Q1 2010)

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    5. 5 African PE: Fundraising 2005-2009

    6. First investment in a private equity fund in Africa in 1994 Currently, IFC has invested in over 30 funds in Africa with commitments totaling over $640 million These funds have invested in over 230 companies The portfolio is a mixed bag of high performing and developmental funds 6 IFC Private Equity Funds - Africa

    7. Private Equity requires: businesses in which to invest access to equity stakes with influence over the business Supportive trends: Move to market-based economies since the 1990s The opening of trade and capital flows since 2000 Reduced identification of family status and wealth with direct ownership 7 The Opportunity in Emerging Markets

    8. 8 What do we look for in a Fund? Quality of Fund Manager: Local presence/access to deal flow Team: background and experience Track record (PE/other) and exits Alignment of interests/fund terms IFC Role and Additionality Development impact: Growth capital and value-addition Fit with IFC’s strategy: IFC priorities (SME, IDA, agribusiness/infrastructure/ climate change…), region specific objectives There are three filters on fund selection. Additionality – what do we bring that is unique? Can the fund be raised without IFC? Back office advice – e.g. cash management, reporting, governance Stamp of approval Extension into other countries Industry advice 2) Commercial Viability. Local team vital. As growth is the driver, not leverage, operating skills are more valuable in a GP than financial skills. As much prior track record as proof of concept as possible (but then with a lot of proof of concept, role becomes an issue) 3) Strategic fit: This is about Reach. SME. Frontier. Sustainability. Infrastructure.There are three filters on fund selection. Additionality – what do we bring that is unique? Can the fund be raised without IFC? Back office advice – e.g. cash management, reporting, governance Stamp of approval Extension into other countries Industry advice 2) Commercial Viability. Local team vital. As growth is the driver, not leverage, operating skills are more valuable in a GP than financial skills. As much prior track record as proof of concept as possible (but then with a lot of proof of concept, role becomes an issue) 3) Strategic fit: This is about Reach. SME. Frontier. Sustainability. Infrastructure.

    9. 9 Value Add to Funds: Fund structuring to international standards Catalyst for other institutional investors Active participation through advisory boards and committees IFC regional/industry expertise Promotion of environmental and social sustainability There are three filters on fund selection. Additionality – what do we bring that is unique? Can the fund be raised without IFC? Back office advice – e.g. cash management, reporting, governance Stamp of approval Extension into other countries Industry advice 2) Commercial Viability. Local team vital. As growth is the driver, not leverage, operating skills are more valuable in a GP than financial skills. As much prior track record as proof of concept as possible (but then with a lot of proof of concept, role becomes an issue) 3) Strategic fit: This is about Reach. SME. Frontier. Sustainability. Infrastructure.There are three filters on fund selection. Additionality – what do we bring that is unique? Can the fund be raised without IFC? Back office advice – e.g. cash management, reporting, governance Stamp of approval Extension into other countries Industry advice 2) Commercial Viability. Local team vital. As growth is the driver, not leverage, operating skills are more valuable in a GP than financial skills. As much prior track record as proof of concept as possible (but then with a lot of proof of concept, role becomes an issue) 3) Strategic fit: This is about Reach. SME. Frontier. Sustainability. Infrastructure.

    10. 10 IFC’s Experience in EM PE Very broad opportunity Emerging markets private equity is less risky than commonly perceived Successful investing requires more than traditional due diligence There are three filters on fund selection. Additionality – what do we bring that is unique? Can the fund be raised without IFC? Back office advice – e.g. cash management, reporting, governance Stamp of approval Extension into other countries Industry advice 2) Commercial Viability. Local team vital. As growth is the driver, not leverage, operating skills are more valuable in a GP than financial skills. As much prior track record as proof of concept as possible (but then with a lot of proof of concept, role becomes an issue) 3) Strategic fit: This is about Reach. SME. Frontier. Sustainability. Infrastructure.There are three filters on fund selection. Additionality – what do we bring that is unique? Can the fund be raised without IFC? Back office advice – e.g. cash management, reporting, governance Stamp of approval Extension into other countries Industry advice 2) Commercial Viability. Local team vital. As growth is the driver, not leverage, operating skills are more valuable in a GP than financial skills. As much prior track record as proof of concept as possible (but then with a lot of proof of concept, role becomes an issue) 3) Strategic fit: This is about Reach. SME. Frontier. Sustainability. Infrastructure.

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