In Session 5 for Africa Investors, Richard provides an overview of the ample investment opportunities that Africa offers. Richard challenges common assumptions made about investing in Africa and encourages Faith Driven Investors to consider increasing their involvement supporting Faith Driven Entrepreneurs on the continent.

• Richard emphasizes that the unique attraction of Africa investments is the widespread opportunity to get high returns with high quality impact. 

• Richard contrasts Traditional Private Equity (PE) models in countries like the US with Private Equity in Africa.

  • Traditional PE

    • Lots of competition

    • More efficient businesses

    • Need to take more complicated measures to get value or to squeeze out the last bits of inefficiency

    • Need to add significant financial leverage in order to make a lucrative sale of the company

  • Africa PE

    • Highly inefficient set of markets (fifty-four diverse African countries)

    • Surplus of fast growing businesses with good teams

    • Has innate downside protection due to the diversity of the continent

    • Broad range of returns

• Oftentimes investors think of Africa as a land of “more risk, more return.” Richard makes the case that this idea of high risk is overblown. He argues that when you look at every recent major crisis, Africa as a whole has proven very resilient, since the driver of growth is typically domestic and uncorrelated to global crises. Because of this resiliency, an investor can build portfolios that don’t move together and are more resilient to downside loss. Do you agree or disagree with the idea that Africa is a place that requires more risk for more returns? Why or why not?

• Richard challenges investors to reflect on what other investment opportunities besides Africa have 1) scale, 2) the potential to generate phenomenal returns, 3) does not depend on financial leverage, 4) is not complicated, and 5) can have tremendous impact on millions of lives. In general and then specifically as Faith Driven Investors, why should we consider investing in Africa? Why do most investors shy away from investing in Africa? 

• What other reasons strengthen the case for investing in Africa? What drawbacks are there for investing in Africa?

John 21:4-8

Early in the morning, Jesus stood on the shore, but the disciples did not realize that it was Jesus. He called out to them, “Friends, haven’t you any fish?” “No,” they answered. He said, “Throw your net on the right side of the boat and you will find some.” When they did, they were unable to haul the net in because of the large number of fish. Then the disciple whom Jesus loved said to Peter, “It is the Lord!” As soon as Simon Peter heard him say, “It is the Lord,” he wrapped his outer garment around him (for he had taken it off) and jumped into the water. The other disciples followed in the boat, towing the net full of fish, for they were not far from shore, about a hundred yards.

• Consider the ways that Faith Driven Investors can better partner together in Africa and support local Faith Driven Entrepreneurs. Take an active step towards deepening the community of Faith Driven Investors local to you.