Investing in Africa
Silk Invest 3 Frntier Fcus Funded in 08 t prvide access t Africa, Middle East and Frntier Asia Lcal Presence Deep lcal investment pl cvering markets In Regin Institutinal Set-up Custmized t frntiers with 7 ffice and regulated ut f UK & UAE
African Equity Team Daniel Brby - CIO Public Markets & Deputy CEO 25+ Yrs experience United Kingdm Funmi Akinluyi Investment Directr Sub-Saharan Africa and Lead Fund Manager 10+ Yrs experience Nigeria Hesham Saad Investment Directr MENA 10+ Yrs experience Egypt Chris Muller - Investment Directr Suth Africa 30+ Yrs experience Suth Africa Yussef Lahlu - Prtfli Manager Maghreb regin & GCC 5+ Yrs experience Mrcc Mhamed Abdeen - Prtfli Manager Nrth Africa & GCC 5+ Yrs experience Egypt 4 Adele Gikny - Investment Analyst Sub-Saharan Africa 5+ Yrs experience Kenya
Welcme t Africa 54 Cuntries 23 Stck Exchanges 1 Billin Peple Abundant Resurces / Agriculture Mre Develped Stck Market 5 Less Develped Stck Market N Stck Market
Africa s place in the wrld 25% 20% Share f Wrld 20% GDP Africa has been ne f the fastest grwth regins in the wrld Many cuntries achieved GDP grwth f 6% annually in last 10 years 15% 17% 16% Freign Direct Investments 10% 5% 4% 5% 11% 4% 2% 6% Africa has attracted twice the level f FDI f India Africa s FDI was diversified acrss sectrs ranging frm cmmdities t M&A transactins 6 0% Share f Wrld GDP Share f Average Wrld FDI Africa India China Share f Wrld Ppulatin Surce: African Alliance; IMF; Wrld Bank; Silk Invest Nte: Average FDI in 00-10; Ppulatin and GDP as f 2011 Ppulatin 16% f wrld s ppulatin lives tday in Africa By 2030, Africa will accunt fr 23% f wrld s ppulatin
Africa s grwth engines 10 Year annualized grwth (%) 43.0% 32.0% 24.8% 2.5% 2.8% 4.9% 7.5% Ppulatin Labr prductivity GDP per capita Ttal GDP Stck price f tp 40 African firms FDI Mbile Phne Subscribers 7
Japan Italy USA UK Germany Egypt Mrcc Mauritius Kenya Ghana Tunisia Suth Africa Nigeria Lw debt levels Grss Natinal Debt as % f GDP 230% 120% 103% African debt levels are nt a prblem 82% 82% 76% 54% 51% 49% 43% 42% 39% 18% 8 Surce: IMF
Cvered by FX Reserves & Resurces Debt & Reserves as % f GDP Africa s share f wrld resurces 250 235 224 218 90% 80% 78% 200 70% 150 60% 50% 57% 100 50-20 1 3 50 39 Japan US EU Emerging Asia 20 18 Africa 40% 30% 20% 10% 0% 22% 9% 8% Platinum Diamnds Gld Cpper Oil 9 Debt as % f GDP Reserves as % f GDP Surce: IMF; BMCE Nte: Debt is ttal f public and private debt; Reserves are IFS Reserves ex. Gld
Bad perceptin is nt reality Institutinal Strength Ratings 8.0 7.0 6.0 5.0 4.0 3.0 2.0 3.9 3.3 2.8 2.5 2.2 2.2 7.0 6.6 6.6 6.3 5.9 4.6 5.4 5.0 5.6 5.9 3.9 3.9 1.0 - Crruptin Prtectin f minrity sharehlders interests Judicial Independence Ghana Mrcc Egypt Nigeria Kenya Russia 10 Surce: Wrld Bank; WEF; IMF; Silk Invest Nte: 1 is bad and 10 is extremely strng
Ppulatin in millins Africa s Rising Cnsumer 1,600 1,400 1,200 152 185 1,000 800 600 400 200-105 63 911 1,051 43 654 456 35 340 264 194 272 322 293 230 181 1980 1990 2000 2010 2020 2025 Belw Pverty Line Abve Pverty Line & Belw 5k GDP per capita Abve 5K GDP per capita 11 Surce: Wrld Bank; IMF; Silk Invest
Fcus n Cnsumer and Prductivity Cmmunicatins & Technlgy + Demgraphics + Urbanizatin + Cnsumer Patterns + Educatin Mre Cnsumers & Prductivity
Africa s Entrepreneurs Alik Dangte Fd & Cement Sawiris Family (Orascm) Cnstructin, Telecm, Fertilizer Mike Adenuga (Cnil, Glbalcm) Telecm, il 13 Milhud Chaabi (Ynna Hlding, Aswak Assalam) Cnstructin, htels, Reatil, Renewable energy. Jim Ovia (Zentih Bank) Financial Services. Raymnd Ackerman (Pick n Pay Grup) Retailing
Cmpany examples Nigeria & Kenya Largest cement cmpany in Africa. Market capitalisatin f N1.86bn ($13 billin). Jewel in Alhaji Alik Dangte s $20bn cmmercial empire. Merger between Benue Cement and Dangte Cement. Cmbined 70% f Nigerian market. Als in Suth Africa, Zambia, Senegal, Ethipia and Sierra Lene. Plans t raise Nigerian capacity fivefld by 2015, gaining sales frm imprts and expanding market. 2012 PE 6.0x 2012 Div Yield 10.0% With ver 5.7 millin accunts, accunting fr ver 57% f all bank accunts in Kenya, Equity Bank is the largest bank in the regin in terms f custmer base It perates als in Uganda and Suthern Sudan. Micr-lender with rural distributin and technlgy edge (MPESA). Kenyan remittances tripled in 2010 t $ 1.9 bn. 2010 EPS up 52% 2012 PE - 7.6 2012 Dividend Yield 5.0% 14
Cmpany examples Egypt & Mrcc Leading emerging markets industrial cmpany with slid business lines in cnstructin, cement, fertilizers and energy Funded by ne f Africa s mst impressive and successful crprate leaders Emplys currently 80 thusand persns acrss Africa, Middle East, Asia, Nrth America and Africa Active grwth strategy cmbining rganic grwth and strategic acquisitins 2012 PE 9.5x 2012 Div Yield 5.3% Mrccan leader in the Real Estate sectr, with fcus n lw cst husing segment Innvative apprach by prviding a cmplete slutin frm financing t husing Hlds ne f the largest land reserves at strategic lcatins all ver the cuntry estimated at mre than 63 millin square meters Dubled revenues in 2010 and is targeting a further grwth spurt in 2011 2012 PE 9.3x 2012 Div Yield 5.9% 15
Silk African Lins Fund Cuntry Breakdwn Sectr Breakdwn Btswana 0.41 Banks Basic Materials 6.62 21.37 Egypt 19.23 Building Materials 11.89 Ghana 5.98 Cnglmerates Cnstructin & 7.5 8.79 Kenya 10.59 Cnsumer Services 1.16 Mauritius 2.84 Diversified Energy 0.96 5.4 Mrcc 10.89 Fds & Beverage 12.17 Nigeria 21.64 Husehld Industrials 1.18 5.2 Suth Africa 22.44 Insurance 3.73 Tunisia 3.67 Retail Telecmmunicati 2.23 7.68 Cash 2.32 Transprtatin 1.79 16 Luxemburg UCITS Fund with Daily Liquidity Diversified Prtfli fcused n cnsumers and key African cuntries
N benchmark...fcus n African pprtunity 17 Fcus African cuntries which make up 80% f ppulatin and 90% f FDI
Perfrmance Track Recrd Jan Feb Mar Apr May Jun Jul Aug Sep Nv Oct Dec Ttal 2009 3.53% 5.81% 2.57% 2.27% 0.62% 1.98% -0.75% -1.77% 3.05% 18.45% 2010 6.19% 2.30% 5.62% 2.43% 0.94% -0.90% -2.30% 1.00% -3.01% 1.61% 6.08% 1.13% 22.64% 2011-4.85% -3.03% -4.09% -1.45% 3.54% -3.74% -1.85% -9.61% -5.77% 0.32% -1.21% 2.87% -25.92% 2012 4.80% 2.94% -0.16% 7.71% Fund perfrmance (in Eurs) 150 130 110 18 90 03/2009 06/2009 09/2009 12/2009 03/2010 06/2010 09/2010 12/2010 03/2011 06/2011 09/2011 12/2011 03/2012
Bttm-up target returns f clse t 58% Dividend Yield 2012 (%) PE rati 2012 Fund 6.7% Fund 9.4 Btswana 11.2% Nigeria 12.7 Nigeria 10.7% Suth Africa 11.2 Egypt 8.9% Tunisia 10.9 Mrcc 7.5% Kenya 10.1 Ghana 6.5% Mauritius 9.9 Kenya 6.1% Mrcc 8.7 Tunisia 5.7% Ghana 7.7 Mauritius 2.6% Egypt 6.2 Suth Africa 2.0% Btswana 4.7 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% - 5.0 10.0 15.0 120.0% 100.0% Bttm-up Ptential Returns (%) 91.8% 94.5% 105.5% 80.0% 60.0% 57.5% 65.2% 57.8% 40.0% 31.2% 33.5% 37.6% 20.0% 18.1% 19 0.0% Suth Africa Tunisia Kenya Mauritius Nigeria Ghana Egypt Mrcc Btswana Grand Ttal
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