McLean Partnership

Johannesburg Private Equity Trip

November 22, 2019

On a recent visit to South Africa, Edward King, McLean’s private equity partner caught up with several of our global fund clients. After a tough few years for the private equity industry in Africa, McLean found the general mood to be one of cautious optimism for 2020. This follows a period of active hiring during 2019 as firms look to maximise their management talent for the years ahead.

 

Background context:

Buoyed by a growing middle class, African Private Equity hit the headlines several years ago as a growth market for private investors.  What followed was a rush of new private money into the market and several significant first time private equity fund raises. However, in recent years, a combination of foreign exchange challenges, geopolitical uncertainty and a period of sustained growth in the US public markets resulted in weaker relative returns for Africa centric funds, especially those raising first time money. Following recent meetings, we found the majority of our clients now feel the market is starting to pick up again, particularly for funds who have capital to deploy.  As one global manger explained “With a mixture of preferential currency conditions and some great businesses to partner with, now is ironically a good time to be investing”   

 

Executive recruitment market:

From a human capital perspective, during 2019 we have witnessed first-hand how more sluggish economic conditions in western European economies have encouraged talented senior business professionals to look further afield for their next challenge. For funds investing in founder led companies in southern Africa, now is an excellent time to persuade candidates with international business expertise to join these local businesses and help enhance and build further value in partnership together.

Rightly, it is great to see investors prioritise a diverse and ethnically balanced management team, an understandable priority for all the companies they invest in.

 

Ethical and Socially responsible investing:

The importance of ESG as an influencing factor over investment decisions is now at the forefront of decision making. McLean already have extensive experience running global searches for ESG professionals on behalf of both listed and private equity funds, in both traditional and frontier markets. Whether operating as an impact investor or not, a high majority of funds are now looking at environmental and socially responsible criteria prior to making initial or further investments.  It has become a real influencing factor and not just paid lip service. Long may this continue as a powerful tool in financial services to help ensure a more sustainable, healthier and wealthier outcome for both employees, communities and investors.

 

McLean Africa Private Equity 2019

So far this year McLean has been involved in securing senior management and board members for businesses in the following sectors: Pharma, Healthcare, Food & Ingredients, Technology and Infrastructure, Consumer Retail.   People have been hired to work in South Africa, Nigeria and Uganda amongst other nations.

For a confidential discussion on McLean’s Private equity capabilities and track record in Africa, please contact Ed King on 0203 597 6404/07970 492265 or on EdwardKing@mcleanpartnership.com