Bulls n Bears Entrepreneurship Zone :: The journey so far: Carolyn Campbell, partner, Emerging Capital Partners

Mon Dec 24 07:44:41 CAT 2018

 <http://www.nedbank.co.zw/> 

Carolyn Campbell is a founding partner of Emerging Capital Partners (ECP),
a pan-African private equity fund which has raised more than US$3bn in
growth capital through funds and co-investments. Campbell serves on the
firm’s executive committee and investment committees.

1. Tell us about one of the toughest situations you’ve found yourself in as
a business owner.

Since founding ECP 18 years ago, we raised more than US$3bn for investment,
invested in more than 60 African companies and fully exited from 43 of them.
As you can imagine, we have faced no lack of challenges during those years.
We have weathered the Jasmin Revolutions in North Africa, the global
financial crisis and several commodities downturns, which have an outsize
effect on several African economies.

The way ECP was designed from the start helped us overcome these
challenges. Rather than time the market, we spread our investments over
several years which allows us to be patient and exit at the right time. We
also have a wide geographic scope and we invest in multiple currency zones.

Our ability to work in both Francophone and Anglophone Africa also helped
us to achieve balanced diversification. We are one of the few funds to have
such a penetration in both zones, and we have made some of our best deals in
Francophone Africa.

2. Which business achievement are you most proud of?

I am proud of the lasting and important companies we have built. When I
land in a key African airport, I am pleased to see a café or bank that we
grew from often a smaller concept into a national brand. I am also proud to
have built a diverse team of investment professionals hailing from 15
countries with different languages and cultures. And we have managed to
develop genuine camaraderie that shows in our investment approach. We have
invested in more than 40 countries and pioneered in key markets such as
Kenya and Côte d’Ivoire.

Today, ECP’s two large offices in Nairobi and Abidjan allow us to cover
much of the continent and our organisation around these two poles. This is
key to understanding our success. This footprint has enabled our companies
to take advantage of Africa’s integration and generate economies of scale by
building platforms. We built regional platform companies in many sectors
including banking, cellular towers, insurance and energy. ECP portfolio
company Orabank, for instance, is present in 12 West-African countries, and
Eranove, one of Africa’s leading electricity and water utilities, has built
a significant presence in three key countries while developing fast in many
more.

3. Describe your greatest weakness as an entrepreneur.

I would not dare speak for myself. But there is a fundamental weakness in
our business that emanates from investors’ perception of Africa.

When we started fundraising in 2000, we met large international investors
whom we knew from our previous careers as emerging-markets investment
specialists. The amounts we were looking for were completely unheard of for
African markets. Many had never seen anything positive going on in Africa.
Some investments had been undertaken here and there but never before on such
a scale. I can tell you people were sceptical.

Emerging markets at the time meant mainly China, or India, in the best of
cases. The work required to convince new capital to invest in our space has
been difficult, and I would like to say that this has changed today, but I
wish I had more success at injecting my enthusiasm into investors in New
York and London.

4. Which popular entrepreneurial advice do you disagree with?

The notion of “just do it” in our space. The private equity investing space
is very regulated, time-consuming and expensive. Only a few institutional
investors will be willing to invest – and following the advice to “just go
for it” will not succeed. You had better be prepared for intense scrutiny,
which will come, and you only get one shot at it because investors have long
memories.

Another convention we often hear at investor conferences on Africa is that
you have to have “boots on the ground”. This is certainly true and this
explains why we have several offices throughout Africa. But the truth is you
need a balance between your local presence and your institutional framework
from a centralised headquarters.

Everyone in our founding team had worked at global firms in emerging
markets before and we brought with us a wealth of experience from our
relationships with the international financial community. As a private
equity investor in Africa, you need to have institutional experience, best
practices and a regulatory framework that inspires confidence.

5. Is there anything you wish you knew about entrepreneurship before you
got started?

A few thoughts here: how difficult it is to fundraise – keeping your focus
on your investment strategy while being attuned to what investors want. But
you have to keep fundraising continually, and you have to be successful in
the face of market cycles. Whatever you anticipate about fundraising, it
will take twice as long and cost twice as much and you don’t have the luxury
of timing the market.

You also need to get the concept and the people right, and once those are
in place the journey becomes sustaining and self-reinforcing. One sure thing
about entrepreneurship is that you keep learning all the time. There is not
a day when I say to myself, this was just another day at the office. Life as
an entrepreneur in the African space is full of “if only I had known this!”.

But then you learn and, as long as you learn, you are better prepared for
the next exciting challenge.

6 Name a business opportunity you would still like to pursue.

We are actively looking at a few overlooked targets and sectors. One is
tech-enabled logistics. I am not talking about shared rides in urban
centres, but integrated logistics, for instance, in the transport, consumer
supply and natural resources industries.

Tech allows for radically better customer relationship management, constant
monitoring and cashless transactions. This is a revolution that happened in
Asia – and I am sure it will spread across Africa in no time. The
opportunity to deploy tech in Africa is now, as we know from having invested
in cellphones and cellphone companies for the past 15 years.

Tech is already fundamentally changing education and this is having huge
consequences for businesses and governments alike. We are following these
developments closely as we think we can play a more important role in
accelerating the spread of technology in Africa.

This has already been the case in the past looking at game-changing deals
such as the one we made in IHS, the biggest towerco on the continent. It
helped the whole sector to mature. IHS had about 800 towers at the time we
invested and now has more than 23,000 and is in the top 11 in the world. –
Howwemadeitinarica 

Carolyn Campbell

Invest Wisely!

Bulls n Bears 

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