Africa’s growth gap

Four investment professionals discuss whether funds targeting Africa’s ‘missing middle’ – businesses whose funding needs are too large for microfinance but too small for other institutions – are just development projects in disguise or an investment opportunity not to be missed.

Africa’s “missing middle” is the subject of much debate.

At PEI’s inaugural Africa Forum, which took place in London this month, four investment professionals with involvement in the African mid-market came together to discuss this segment of the market: arguably the heartbeat of the African economy. Does it offer a genuine commercially viable investment opportunity? Or is it simply window-dressing for an aid agenda?

The four panellists are:

Coco Ferguson, partner at Maris Capital, describes how these smaller funds can be considered the “truffle pigs”, sourcing tomorrow’s deal flow for the more established funds. Maris operates in post-conflict and frontier African markets, such as South Sudan and Mozambique;

Tom Cairnes, founder and director of ManoCap, which also invests in post-conflict and emerging African nations, such as Sierra Leone;

Piers Cumberlege, president of advisory firm Straightview, which is currently helping establish a SME-focused fund for Lundin for Africa, the philanthropic arm of the Lundin Group of Companies;

Alexander Dixon, vice president of Africa for Small Enterprise Investment Funds (SEAF), a global private equity and mezzanine fund management firm focused on the emerging markets.

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