Q&A: Experienced Investment Banking & Private Equity professional in Nigeria

What are the biggest differences between African PE and Europe/US/Asia? What are the hidden gems you look for? And sorry to be that guy, but what is comp like? Thanks!

if you’re in USD and work in nairobi (or whatever the currency is) aren’t the returns destroyed by conversions when you have to return capital / deploy capital, etc?

what observations have you made that you can generalize about getting into investing in developing economies / the difficulty (e.g. China, India, etc) - what’s the barrier to entry for someone who’s a smart investor in US say going and investing in Africa? the DD requirements are probably much higher to invest in USA but what’s the trade off in Africa

also what about dictatorship economies harms your investments / political unruliness / risk profile and if that’s not how you think about it what assumptions do outside investors make about investing in Africa that are wrong / scare people off easily

in general what does your expected return threshold need to be in order to invest and what kind of returns do you shoot for? e.g. 3x-10x MOIC/CoC or 20-50% IRR etc

What did you do to stand out in your recruiting process?

Side note, I once met Shaka Kariuki (co-CIO of Kuramo for those unfamiliar with the matter) at a non-work-related event. For the life of me, I could not impress that guy whatsoever hahaha. He said some fascinating stuff, his work ethic sounded unparalleled, but it literally sounded like he was quoting motivational videos 1/2 the time - straight up regurgitating tons of Tony Robbins quotes. I felt like I couldn't have a real conversation with the guy. What's the culture really like at your firm?

can you break into funds like this out of undergrad? if not what should I be doing as a sophomore to put my self in the right position when the time comes.

Quite tough but not impossible. From my observation most PE shops don’t have the man power or the will to train raw entry analysts the way IBs will train them. But PE shops are attracted to experienced juniors that can hold their own on a deck and valuation model with minimal support.

Not impossible to be an entry level hire straight out of undergrad if you can demonstrate the skills I mentioned above. This is usually through internships at BB IBs or Boutique advisory shops or if you are lucky a solid PE shop with enough deal flow to improve your learning reps.

In sophomore year, I’ll say try your hands at an internship at one of the type of shops mentioned above. If all else fails, crack on with financial modeling courses, corporate finance courses and of course the time consuming CFA level I.

All the best!

Very interesting AMA, thanks for doing this. I know you said you’re based in Nigeria - what is your fund’s investment mandate? All of Africa? Only sub-Saharan? Is it “anything goes” in terms of countries or are you focused on more stable economies?

Also, what sorts of industries do you mostly invest in? I imagine a lot of deals in Africa are in infrastructure / energy / power. How do you navigate the political risk there?

Very interesting stuff you're working on. Do you think there would be any possibility of doing an internship at a sizeable African PE (3-4 months), preferably in Nairobi? 

Not necessarily at the fund you work at, but more broad. 

Short about me:

I am a Dutch national currently pursuing two master degrees in Finance and Law at Erasmus University. I already done an internship at a MM M&A boutique, and have an internship lining up at an EB in Amsterdam. I have studied at the University of Cape Town for a semester and have developed a large interest into Africa. 

Thanks