PRIVATE WEALTH MANAGEMENT AFRICA FORUM

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1 23RD MAY EKO SIGNATURE L A G O S, N I G E R I A TIME: 10:00-15:30 Hotel Venue Olusegun Paul ANDREW Chair, African Wealth Report

2 Theme: Banking Africa s Wealthy and Family Offices HNWI- UHNW in Africa- Opportunities and Challenges Africa, is a huge market for wealth management Africa is by far, one of the most attractive and, simultaneously, difficult markets to penetrate and develop from a wealth management point of view, specifically with regards to Ultra High Net Worth individuals. Africa cannot be looked at as a single market, a common mistake made by a large number of international banks and financial institutions looking to benefit from the wealth creation that is taking place across the continent. The origin of the accumulated private wealth, the distribution of this wealth and the economic and political climates, vary from country to country. Additionally the ethnic and cultural diversity present within individual countries mean that having a strong understanding of the specificities of each market is crucial to doing business on the continent. The African continent is composed of 54 countries with a total population of circa 1.3 billion people at the end of Total African GDP reached a combined USD 2.3 trillion as at the end of GDP per capita varies from USD 400 per head to a whopping USD 25,900 per head. The Future of Wealth Management in Africa It goes without saying that many African countries are not yet in a position to be attractive to WM firms and will not be in the nearfuture due to their still emerging economies. Some countries may appear at first, from an economic point of view, to have good potential for WM services. However, other factors such as a polarized distribution of wealth with a relatively small middle class or non-transparent groups, mean that time is still needed before they become attractive for wealth managers. Regardless of the situation, firms also need to assess the appetite for WM services and devise an entry strategy before establishing a local presence in any given African country. More importantly, the needs of a large number of entrepreneurs and business individuals would be better serviced, at least initially, by local and regional African groups rather than bulge bracket and international investment banks or wealth managers. When it comes to establishing a local presence in African countries, WM firms should be patient and not expect an easy road. Since the 2008 economic crisis there has been decreased confidence in the WM industry worldwide and these effects are still being felt today, with African HNWI not excluded from this sentiment. Investors are becoming increasingly sophisticated and demanding more transparency. Added to this, certain additional risk factors attributed to many African countries including high levels of bureaucracy, corruption and political instability, mean that WM firms seeking to operate in these markets should allow for a substantial adjustment period before expecting to achieve significant results

3 KEY FACTS KEY FACTS GLOBAL WEALTH Industry is a $100trillion AUM at the moment AFRICA accounts for les than 3..7% of that sector (AWR research and intelligence) NIGERIA is about 0.4% of the GLOBAL WEALTH CONCENTRATION AWR AFRICAN WEALTH CONCENTRATION by Oliver Williams, Co-Founder of WEALTHINSIGHT and Board Member of AWR concluded his research and survey of Six Top Cities in Africa and here is the latest update: WEALTH CONCENTRATION IN AFRICA HNWIs : 25,535 UHNWIs: 312 JOHANESBURG HNWIs :13,426 UHNWIs: 159 CAIRO HNWIs : 9,846 UHNWIs: 143 CAPE TOWN HNWIs : UHNWIs: 120 HNWIs : 5,771 UHNWIs: 75 HNWIs :2,069 UHNWIs: 25 LAGOS NAIROBI ABUJA HNWIs : 2,001 UHNWIs : 16 MARRAKECH

4 Differentiating Asset Management from Wealth Management Asset Management and Wealth Management share a common activity in the name of financial analysis. The latter is obviously the source of confusion many people fall into when discussing the two notions. To illustrate the differences, let s have a look on figure 1 which describes Asset Management. Figure 1 Asset Management Fund Management Investment Decisions Public/Private Markets Financial Analysis Analysis Asset Evaluation Reports Figure 1 simplifies as much as possible the area of influence for Asset Management: Financial Analysis and Fund Management. The financial analysts observe, analyse and evaluate public and private markets. Their reports are used by fund managers to facilitate their investment decisions. Such process is called Asset Management.

5 Figure 2 summarizes Wealth Management. Figure 2 Public/Private Markets Financial Analysis Analysis Asset Evaluation Reports Client Relationship Management Private/Institutional Clients Analysis Risk Profile Reports Copyright AME&T Group S.A. Author: Alexandre Rado Investment Decisions Optimal Portfolio Selection Wealth Management

6 As one can see, the common ground shared by Wealth Management with Asset Management is Financial Analysis. By adding a new dimension to the financial analysts reports, risk, a wealth manager is able to carry forward his duty of tailor making the management of a client s portfolio through a process of optimising return and risk. As a result, the role of the client relationship manager is to gather information on the investor s risk profile, used and often quantified by the wealth manager before selecting the optimal portfolio. Figure 3 summarizes these activities observed in many private banks. Figure 3 Figure 3 could easily be the start point of a bank which decides to reorganize to tackle the very profitable field of wealth management. If well organized, i.e. taking the maximum of all possible synergies available, a universal bank could increase profit margins at a level never experienced before entering the wealth management golden universe.

7 Why AMET? AMET is the investment advisory and management firm and the key driver of the African Wealth Report (AWR) AMET has worked with some of the finest and leading wealth managment firms in Switzerland Our family office advisory offering is served with experienced wealth advisors from Switzerland, advising on over 40bn USD AUM. AMET has advised multi family offices in Switerland with an AUM over over 50 USD AUM, and worked with a family office to launch the first Africa Fund in 2008, prior to the 2008 financial crises. AMET Board members also include those who have worked to improve the global financial regulatory landscape and promote investor protection.

8 IN A W R 2015 CONTENT BLOG N e w s WEALTH SURVEY AWR Wealth Survey offers a holisitc perspective on wealth accumulation, consumption and preservation of UHNWIs in the continet. Its in-depth analysis on trends, patterns and economic sectors prompting such wealth is clinical. AFRICAN CITIES AWR insightful viewpoint on African cities prompts its specific view-point on prime property locations, commercial property, real estate investments and infrastructure developments in each City of the continent. RESTRICTIVE INVITATION SPECIAL AWR, PwC and Capital Club Lagos GALA DINNER will feature at the CAPITAL CLUB LAGOS «Africa is reshaping the face of wealth creation and conservation. The story should be Reported accurately and fairly! AWR is reporting the dynamics of African Wealth made and distributed in Africa» O. Paul Andrew, Chief Responsibility Officer, AWR- AMET LUXURY INVESTMENTS WEALTH DISTRIBUTION F O L L O W U S AWR looks at various luxury investments as well as its demand and supply trend within Africa s economic empowerment scope. Africa has become the new bride and a new destination for ultraluxury goods with increasing appetite for luxe statement AWR provides up-to-date intelligence on wealth distribution and accumulation pattern of key economic drivers and sectors. African Wealth is mostly driven by young and skillful entrepreneurs who are changing Africa s economic landscape African Wealth & Luxury Report is a publication of AWR and PwC. AMET Netherlands B.V. The logos of PwC, AWR and AMET are registered trademarks of the entities represented. For further enquiries on the event please enquiry@ng.pwc.com or info@africanwealthreport.com. All rights reserved.