Fund management companies offering private equity capital have expressed a significant interest...
25-11-2009

Fund management companies offering private equity capital have expressed a significant interest in setting up in Botswana, chief of Botswana International Financial Services Centre (IFCS) has said.

"We are seeing significant interest from new investment funds and fund management companies seeking to domicile in Botswana, to deploy private equity capital into existing and emerging investment opportunities within the SADC region and the rest of sub Saharan Africa," Allen Boshwaen said at a stakeholders conference in Gaborone last week.

Currently some of the IFSC investment funds companies include African Alliance, Vantage Mezzanine Fund (II) and newly accredited Ariya. "The former has been accredited to the Botswana IFSC to provide investment management and other related consultancy and financial services initially and primarily to its Jersey based parent company, Ariya Capital Group Limited (ACGL), and a new $150 million private equity fund focused on sustainable investments in Sub-Sahara Africa. Ariya will provide four essential services in relation to the Southern Africa Sustainable Investment Fund, namely deal or pipeline origination, due diligence, value creation and exits," the IFSC website says.

The IFSC has developed a revenue generation strategy whose main intervention is to develop an integrated financial services cluster property in Fairgrounds area via a joint partnership. "Its details are being finalised," Boshwaen said.

To implement the strategy, the IFSC aims to grow the number of its accredited companies more than five-fold from the current 30 by the end of March 2014. "We will be banking on the commitment and support of our key stakeholders to realise this key milestone," Boshwaen said.

To integrate its strategy with the government hubs, the IFSC has targeted business development initiatives to build a support structure around the Diamond Hub. The first significant success came with the setting up of one of the world's leading diamond industry financing bank ABN-AMBRO in September.

"The Innovation Hub, through faster voice and data communications is very crucial to all international businesses operating here and that the centre is working closely to fast track it," says the IFSC. The IFSC has embarked on an initiative to create a suitable and enabling legislative framework. It aims to benchmark the legal framework against international comparator financial and business centres.

"Our priority is to see the IFSC legislation improved so that it unlocks value for us to lure more companies to domicile here and to pursue other long-term strategies," Boshwaen said.

If the legislation is improved, the IFSC will be able to attract more international funds such as diamond financing. Boshwaen said it has become clear from their efforts to lure investors to Botswana that the cost and time of doing business in the country need to be reduced as a matter of urgency.

The IFSC launched a revamped website, which gives background information on Botswana's political, economic and financial background. the IFSC held its first ever stakeholder engagement forum and released a corporate video with testimonies from some of the accredited companies' experience on doing business in Botswana.