ALGERIA Tuesday 4, April 2006 Promoting Africa’s Private Sector in Energy Development Through Alternative Investment Vehicles O. Paul ANDREW [email protected]

Agenda1. Africa: Upward Look

Africa’s Economic Environment

Economic Policy Indicators

2. The Alternative Investments

AIVs

Private Equity / Hedge Funds

AIV Index Funds

3. Developing Pan-African Alternative Investments

AMETInvest Fund

10th Africa Oil & Gas Trade and Finance Conference. Algiers 2006

Africa in brief…

• Africa’s Economic Environment

• Economic Policy Indicators


Africa- ILPL

The transforming posture of the global economic arena has opened the door for developing countries to catch up with the dynamics of the global economy brought about by globalization. This has also translated to opportunities for domestic financing mechanisms and delivery

Inward Look-Power Look Approach (ILPL)

Estimated sum of $107 billion of Nigeria’s private wealth are offshore, far larger than what is invested domestically.

Reappraisal of issues relating to increase dependency on foreign funds, expertise, technology and continued decline in skilled manpower. There is need for a reversal approach as such could be developed inwardly

Development of Alternative Financing Mechanisms- the rise of hedge funds that wants to do long and short


Economic policy indicators in Africa include: - Deregulated foreign exchange market- Privatization and commercialization programme- Deregulation of the interest rate regime- Deregulation and internationalization of the capital market, Fresh investment capital inflows have increased with democratization, signifying the identification of growth and investment opportunities in some African countries.

Following the recent debt forgiveness, cancellation and reduction by international creditors, Africa’s economy now has “Fresh air” to breath, creating a platform for new structural reform and stability. This still would require the support of developed economies to maintain stability and growth.

Prior to debt forgiveness and recent aids, Africa’s economy is constrained by huge total external debt. For instance there is an over-dependence of the economy of Nigeria on the oil sector and this causes a spate of imbalance in economic activities, eliciting a programme of economic diversification.

Economic policy indicators


The Alternative Investments

AIVs

Private Equity and Hedge Funds

The AIV Index Funds


Alternative Investment Vehicles consists of traditional forms of Alternative investments (real estate, commodity, venture capital, buyouts, distressed debt) and new forms of Alternatives through Hedge funds and commodity trading advisors (CTAs).

The low correlation between hedge funds' performance and the market's ups and downs is the main reason why such funds are valued as alternate investment vehicles

Additional Alternative Investments include the followings: Commodity, Managed Futures, and Hedge Fund Indices

Hedge funds thrive on innovation and are focused on discovering and exploiting new investment opportunities. They are highly effective

AIVs


What Alternative Investments offers

Support creative and innovative financial structure

Strong liquidity base

Help to strengthen local capacity and competency

Open Africa’s investment arena to the rest of the world


Developing PEF and HF/FoHFS in Africa

The Alternative Investment Vehicles (AIV) is made up of investments in various asset classes designed specifically- according to each asset class, to meet its long-term performance objectives.

As a performance and purpose-driven funds, it will have a mix of customized and standardized funds-of-funds, direct investments, joint investments, joint venture and separate accounts.

AIV will seek investments from both institutional (public or private), and individuals (wealthy, venture capitalists etc) with the assistance of investment experts/consultants that will be engaged to provide advice regarding specific Asset Classes and Sub-Asset Classes.


10th Africa Oil & Gas Trade and Investment Conf. 2006

AIV- Index FundIndex Investing: Index Fund as alternative investment vehicle.

The need for index fund in Africa is crucial to the growth of AIVs

Stimulate healthy financial environment towards the development of indeginous companies seeking finance for projects, particularly in the energy sector.

The potential benefits of a hedge fund index are essentially the same as for any other asset class

Developing Pan-African Alternative

Investments

Increasing Africa’s Private Sector Participation in the Energy Sector through Alternative Investments

www.ametgroup.com

10th Africa Oil & Gas Trade and Investment Conf. 2006

AME&T Group is a Swiss based enterprise development and Investment advisory/management company backed by strong professionals in investment as well as private banking.

AME&T Group has a portfolio of bankable, world class projects.

Supporting Africa’s investment drive whilst encouraging local players to participate actively in the energy sector, AME&T Group is developing a Private Equity Fund for Private projects in emerging economies. The fund has a strong focus on African markets

AME&T Group 1/2


The Fund is an emerging market focussed investment vehicle for Small, Medium-sized and Large Companies

The fund provides avenue for investors to have direct access to high-yield investment portfolio.

The Fund is the engine of sustainable development in emerging economies

AME&T Group 2/2


Fund Strategy

The Fund follows a long-only strategy with a focus on emerging market private equity

To permit a quarterly liquidity, a soft restriction of a maximum of 60% in illiquid private equity investment is imposed to the Fund.

Other investments to include cash, emerging market bonds, private placement of publicly traded companies, public companies listed on emerging countries exchanges and emerging market funds.


Investments in private equity is expected to range from $500k to $25m depending on the assets under managements in the Fund and opportunities at hand.

The Fund may invest in any position in the life cyle of the company from seeding the first round to pre-IPO investments.

The investment committee will seek diversification along four lines: countries, sectors, life cycles and financial instruments.

Private Equity Holdings


Risk Management

Risk management ensures that liquidity in the Fund matches forecasted subscriptions and redemptions.

No meaningful leveraging of positions is employed.

Illiquid positions are valued by an independant party.



Board of Directors

InvestmentCommittee

AdvisoryCommittee

Risk Committee

AME&TGroup

World MarketsExternal Consultants

Sponsor

Structure

Our Common Agenda…“Africa is a wonderful, diverse continent with an extraordinary, energetic and resilient people. But it is also plagued with problems so serious that no continent could tackle them on its own”

- Mr. Tony Blair, Prime Minister of Great Britain.

In conclusion…


www.ametgroup.com

Thank You And God Bless


http://www.ametgroup.com/

Documents

ALGERIA Tuesday 4, April 2006 Promoting Africa’s Private Sector in Energy Development Through Alternative Investment Vehicles O. Paul ANDREW [email protected]