Written by Coenraad Bezuidenhout
Attracting European institutional investors to Africa is a critical endeavour for the continent's economic growth and sustainable development. At the recent Europe-Africa Impact Investing Summit held in Cape Town, South Africa, experts highlighted seven essential strategies for African impact investment funds looking to draw the interest of European institutional investors.
1. Prioritize Corporate Governance:
Good corporate governance is like a first impression—it matters. To attract European investors, ensure that your investment projects are well-managed, transparent, and adhere to strong governance practices. Transparency, regular audits, and protection of shareholder rights are key elements that build confidence in your investments.
2. Align with Sustainable Development Goals (SDGs):
Incorporate the United Nations Sustainable Development Goals (SDGs) into your investment strategy. European investors increasingly seek opportunities that align with specific SDGs, reflecting their commitment to social and environmental impact. Clearly demonstrate how your projects contribute to these global goals.
3. Foster Transparency and Trust:
Transparency is the foundation of trust in the investment world. Build trust with European institutional investors by providing transparent reporting, clear decision-making processes, and a commitment to ethical business practices. A strong track record of integrity can set you apart.
4. Address Infrastructure Challenges:
Infrastructure is a critical driver of economic growth. Work on overcoming infrastructure challenges, such as reliable internet connectivity, to facilitate remote work and investment opportunities. European investors value infrastructure that supports business operations.
5. Study the European Investor Landscape:
Invest time in understanding the preferences and priorities of European institutional investors. Identify specific sectors or niches that attract them, such as energy, water, or waste management. Tailor your fundraising approach and project selection accordingly.
6. Design Investment Products for European Preferences:
Consider the fund structures, currency preferences, and risk management approaches that align with European investors' expectations. Offering investment products that match their criteria can make your projects more appealing.
7. Build Long-Term Relationships:
Invest in nurturing relationships with potential investors, even if your current projects don't align perfectly with their needs. Building trust over time can lead to successful future fundraises. Remember that trust and reliability are key in the world of investments.
Attracting European institutional investors to African impact investments is a complex but rewarding endeavor. By prioritizing corporate governance, aligning with SDGs, fostering transparency, addressing infrastructure challenges, studying the European investor
landscape, designing investor-friendly products, and building long-term relationships, African investment funds can successfully draw European capital to drive sustainable development on the continent.
The panel discussion was moderated by independent board chair and Brussels-Africa Hub board member Kameel Keshav CA (SA), with participation by Co-Managing Partner and Founder at Infra Impact Investment Managers Morne Edas, One Group CEO and Co-Founder Revel Wood, and Finance Director at Norsad Capital Mpho Rathladi.