Joining the Capria Network will help fund managers in Africa access global markets and deliver stronger returns
19th November 2018, Nairobi – With first close of its new $100 million “network fund”, Capria recently launched an investment cycle with a focus on partnering with and investing in fund managers in Africa that invest in early-growth businesses . With 6 of 16 managers in the Capria Network already from the continent, Capria is now looking to expand its network to work closely with additional managers from East Africa, West Africa and Francophone West Africa to help them build world-class globally-connected funds. Capria recently established an office in Nairobi and hired an accomplished Regional Director to head up outreach to new partners and to support the regional network. Applications are open now, with priority consideration provided to those submitting by 28th of November.
Addressing Challenges Across Africa
While fund management is a tough business in all emerging markets, African managers face an extra share of difficult challenges, including building strong deal pipelines, operating efficiently across countries, and finding alternative sources of fundraising.
Finding and Developing a Successful Pipeline
Fund managers have to find strong businesses that fit their investment profile. Many businesses identified look good on the surface, but have issues found once looking under the covers. The resulting lack of investible pipeline slows down the deployment process, reducing investor confidence. More importantly, shallow pipelines limit the choice of investments, potentially leading to compromised selections or overpaying, thus reducing the odds of strong returns. Capria works closely with its partners across Africa to build and execute strategies to increase pipeline depth and apply rigorous investment discipline to ensure only the best deals are made.
Optimizing Cost of Doing Businesses Across Countries
Within Africa, early-growth investments are often lucrative at the top line but can be expensive to transact and manage, substantially depressing net returns. Challenges include dealing with opaque and fragmented laws, leadership capacity building, taxation complexity, and country specific regulatory frameworks. Most LPs prefer to invest in fund managers that are domiciled in tax / regulation friendly jurisdictions, further increasing operating costs for funds. These challenges are just the tip of the iceberg, but if addressed using regional and global best practices, it’s possible to find opportunities for outsized returns.
Effective Regional and Global Fundraising Alternatives
As funds grow, managers need to seek multiple new channels for fundraising; they can’t rely solely on small local family offices and DFIs. The clear option is to go to global investors as well as regional LPs. But these potentially highly-effective alternate fundraising options that would enable managers to keep pace with Africa’s growth potential continue to be out of reach for many. Why? Because managers have not adopted global best practices that regional and global investors expect. Capria helps fund manager partners upgrade their operations to adopt global best practices, across everything from team building to governance to branding. Once operating at a high level, fund managers have a much stronger ability to prevail in the increasingly- competitive world of fundraising from regional and global LPs.
Building and expanding the Capria Network in Africa
Capria invests in venture capital, private equity, and other debt and equity funds backing early-growth businesses in emerging and frontier markets. Capria enhances fund managers’ ability to deliver superior returns through the network effect of collaborating fund managers, a proprietary investment platform backed by deep intellectual property, and long-term partnering and advisory services. Capria sees the pain points and the potential that are unique to Africa and aims to address these through peer learning and collaboration with other Capria Network funds in the region as well as with global peers in Asia and Latin America.
“After qualifying for the first cohort and attending the first-ever intensive, we have received support from Capria with pitch decks, PPMs, industry events, IC memos, media — pretty much everything, and now our first close is now imminent. Capria has made navigating this tricky and demanding maze easier for us”, says, Chai Musoni, Partner, Vakayi SME Fund, Zimbabwe.
Being a part of the Capria Network helps funds across regions engage and enable each other. Each fund manager benefits from, and contributes to shared intellectual property, global and local best practices, original research, and investor connections within the network.
“Capria Network focuses on supporting fund managers and deeply partnering with them to solve the operational challenges as well as adopting investment best practices. Recently, Capria has opened an office in Nairobi that is led by Mercy Mutua, Regional Director, Africa, to expand operations in the region. Capria plans to select 3-5 funds to work closely with, to solve the roadblocks that make it so hard to achieving excellence and great returns”, said Dan Kranzler, Senior Partner, Capria.
Capria is targeting to make aggregate commitments of USD $90 million in the best fund managers across Africa, LatAm and Asia by 2020. Capria is looking to grow current network-wide assets under management from USD $259 million to more than $750M million by 2020, positioning its network of collaborating fund managers to capture part of the USD $1+ trillion “missing middle” opportunity. From over 604 applications submitted, only 16 funds were selected over the last few years to join Capria Network. Capria intends to add 3-5 more fund managers to the network through its next investment cycle. Fund managers can apply here: https://2019.capria.vc/apply
Capria is a global investment firm leading the largest network of fund managers collaborating to deliver superior returns in emerging and frontier markets, using flexible capital, advanced investment systems, and deep partnerships. Through its network fund, Capria invests in venture capital, private equity, and other debt and equity funds backing early-growth businesses. Capria applies global best practices of impact investment and ESG management in order to increase resilience of its portfolio. Capria and its global network deliver profits with scaled impact aligned with United Nations’ Sustainable Development Goals. Capria has offices in Seattle, Bangalore, Singapore, and Nairobi. More about Capria’s Network activities >