with Ali Khalpey, Exotix

Author: Gilly Wright
Ali Khalpey, partner and head of equities at Exotix

The World’s Best Investment Banks 2015
Winners Profile


Global Finance: What are the hottest opportunities in Africa right now?

Ali Khalpey: We had a pretty interesting 15-month period in Africa. Nigeria continues to be on the top of investors’ minds for both good and bad reasons—the political and macro scenario has transformed over the past three months, and the forthcoming elections and quasi-devaluation of the currency has resulted in quite a lot of opportunities for investors—so we’ve seen many of our clients participate and take advantage of some very cheap valuations. The market continues to be quite volatile, certainly in the banking sector, which has always been mercifully impacted in valuation terms, trading at very distressed levels—and that woos a lot interest. There are also the usual blue-chip multinationals operating in Nigeria—the high-quality companies with long-term growth potential. A lot of our investors, who believe in the African story, participated quite aggressively in Nigeria over the past few months.

A lot of our clients are looking at Tanzania, since restrictions were lifted on foreign direct investment. We’re particularly excited by Ethiopia, which has very good demographics and a very untapped market. It’s very difficult to [invest in] Ethiopia in any meaningful way, but there are lots of opportunities evolving over the next twelve months.

GF: How important is local market knowledge when investing in emerging markets?

Khalpey: We’re a global house with local footprints, precisely set up this way to help our investors with local, on-the-ground cover, local access, local color, local feel, local insight—we set ourselves up this way to assist and facilitate better interaction with local market teams and policymakers on the ground.

GF: What is the next phase for private equities in Africa?

Khalpey: The most prominent is infrastructure and power assets across Africa. A number of countries are looking for energy infrastructure or road and rail investments, and that will continue to be the theme, whether it’s places such as East Africa, with the launch of their $5 million East Africa Railway, or Nigeria, where power generation is less than 6 kilowatts for a population of a 100 million people.

Another big theme is financial penetration—including mobile banking and insurance services. If you look at the recent M&A activity across Africa, insurance has been quite interesting, with some large local and South African insurance companies trying to get involved in Nigeria.

We saw a big wave of corporate investors enter the sub-Saharan market, but the landscape has changed dramatically—we’ve got a lot more participants looking for the same assets. Regional companies in both East and West Africa are looking to expand outside their borders, there are external private equity investors, and domestic private equity investors are also quite active.      

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