Lee Stoetzel, Dictionary (2) 2007 
mahogany and zebrawood
 Artwork Number: LSTO.0032




                                 ...
African opportunity

  “Sustainable economic growth and development is an imperative, and …the creation of a
  climate in ...
Challenges: Africa perceptions and challenges …


  Negative perceptions of …                        •   Trivia …
  •   Di...
Challenges: doing business in Africa today




                                           Source: Standard Bank Economics,...
Opportunities: globalization of investors


                                    R
                                    B


...
Opportunities: new investors from emerging markets/South


        BRIC trade with Africa; share of each country's GDP    ...
Opportunities: understanding Africa’s capital markets




                 •      Africa has led other frontier and emergi...
Opportunities: new investment marketplaces




              •      Stock exchanges are a good proxy indicator of investme...
Opportunities: attractiveness of market to foreign investors


                   LPs’ Planned Changes to EM PE Investment...
Marketplace: materiality of ESG issues – S.African pension funds, 2007


  Q: Please indicate the extent to which you feel...
Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
Opportunities: investment in Africa today
      •        Investors in private, public and philanthropy sectors have roles ...
Lee Stoetzel, Dictionary (2) 2007 
mahogany and zebrawood
 Artwork Number: LSTO.0032




                                 ...
Project team: about Graham Sinclair
                    •      Graham Sinclair is a sustainable investment strategist, ESG...
Credentials: what people are saying about SinCo/Graham Sinclair
           •      “Graham is an exceptional professional i...
Credentials: what people are saying about SinCo/Graham Sinclair

           •      “Graham was instrumental in the plannin...
SinCo helps: leading clients tackle some of the toughest challenges
                                  •      Developed str...
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SIF IWG China In Africa Panel by Graham Sinclair/SinCo 20100518.ppt

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Some commentary to the SIF IWG panel discussion on China in Africa during the one day seminar at the World Bank in Washington DC 18 May 2010.

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SIF IWG China In Africa Panel by Graham Sinclair/SinCo 20100518.ppt

  1. 1. Lee Stoetzel, Dictionary (2) 2007 
mahogany and zebrawood
 Artwork Number: LSTO.0032 SIF IWG 2010 18 May 2010 The Role of China in Africa Snapshots from the Edge Graham Sinclair Principal ESG Investment Architect graham.sinclair@sinclairconsult.com SinCo sinclairconsult.com REGULATORY INFORMATION No part of this proposal suggests or should understood to suggest endorsement or advice on any investment approach, strategy or offering. The rights and obligations of the investor are set out in the relevant policy contract. Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested. Past performance is not necessarily a guide to future investment performance. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  2. 2. African opportunity “Sustainable economic growth and development is an imperative, and …the creation of a climate in which business, big and small, can thrive”. -address by Nelson Mandela, President of Republic of South Africa to FICCI, CII and JBC, Delhi, India, 26 January1995 “Together, we can partner on behalf of our planet and prosperity and help countries increase access to power while skipping - leapfrogging - the dirtier phase of [invest]ment”. - Barack Obama, 44th president of USA address to parliament, Accra, Ghana, 11 July 2009 Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  3. 3. Challenges: Africa perceptions and challenges … Negative perceptions of … • Trivia … • Dictatorial regimes • 54 countries/territories • Political instability • 2nd largest continent, 30m km2 • Civil strife • +/- 1 billion souls • +/- 2,000 languages • Absence of rule of law • Business in: English, French, • Economic mismanagement Portuguese, Spanish • Corruption • Economic depression • Starvation • Deadly diseases Nonetheless…  Africa is not a country, but continent – a patchwork of risk  South Africa is in Africa  Over the past 15 years conflict has declined significantly  Increasingly, African peace-keeping forces are playing a leading role in maintaining peace  Economic gains of the recent past are threatened by the global economic meltdown:  Commodity price boom since 2002  Best in a generation economic growth and inflation rates  High, but falling external debt burdens  Booming FDI inflows  Less volatile currency cross rates Source: The IDC: Doing business on the continent, Thokoane Tsolo, Head: Africa Unit, presentation to Legae - African Markets Roundtable Discussions, 5 November 2009 Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010 3
  4. 4. Challenges: doing business in Africa today Source: Standard Bank Economics, Presentation to IDC/Legae African Investment Rountable, IDC Sandton, Standard Bank Africa, Wilhelm Levin, 5 November 2009 Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  5. 5. Opportunities: globalization of investors R B I C BRICs now rate as Africa’s top trading partner; ZAF ranks as 10th largest Source: IMF, WTO cited in THE AFRICAN PRIVATE EQUITY LANDSCAPE Cape Town Masterclass 10th February 2010, Matthew Hunt, South Suez Capital Limited, Medine Mews, Chaussee Street, Port Louis, MAURITIUS Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010 5
  6. 6. Opportunities: new investors from emerging markets/South BRIC trade with Africa; share of each country's GDP BRIC trade with Africa; share of each country's GDP 1980 2008 Poverty transforms a free man into a slave. - Oji, West Africa Source: Standard Bank Economics, Presentation to IDC/Legae African Investment Rountable, IDC Sandton, Standard Bank Africa, Wilhelm Levin, 5 November 2009 Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  7. 7. Opportunities: understanding Africa’s capital markets • Africa has led other frontier and emerging markets in developing ESG indexes. The JSE SRIX launched in 2004 as the first exchange-led SRI index and first in emerging markets. Egyptian SX launched the first MENA ESG index in 2009 in partnership with CRISIL, S&P and Hawkamah Institute. Source:African listed equities 2009, from mckinsey.com/mgi quoted in JSE Africa Board YOUR GATEWAY TO AFRICAN CAPITAL MARKETS presentation to CITI/Securities Africa AFRICA INVESTMENT CONFERENCE LONDON – 16 MARCH 2010, Maureen Dlamini, Executive Head, Africa Board, Johannesburg Stock Exchange Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  8. 8. Opportunities: new investment marketplaces • Stock exchanges are a good proxy indicator of investment marketplaces. Sustainable development in Africa needs more SMMEs [small, medium, micro enterprises] to grow and succeed. Local stock exchanges can offer local businesses opportunities to raise the capital needed to grow. Stock exchanges - like the AfricaSIF network - are necessary investment infrastructure in Africa. Source: Investec Asset Management analysis, Bloomberg, April 2009 Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  9. 9. Opportunities: attractiveness of market to foreign investors LPs’ Planned Changes to EM PE Investment Strategy Over the Next 2 Years ND==,.O*/C MH26+8<F2,?. *998@,-?8JD2K7LB I,004789.=6 CHD6+8<F2,?. CDE!C.+.2.-8<F2,?.8@7A8CG8<F2,?.B >.6,-8<:72,?.8@7A812.3,4B 56+7289:72;,-;8<=,. 12.3,4 /-0,. *+,-. !"#$ #$ "#$ %#$ &#$ '#$ (#$ )#$ Respondents (%) 9AP.-08,-Q7=6:7-6 17;,-8,-Q7=6,-; R7?27.=78H28=6HP8,-Q7=6,-; Source: EMPEA/Coller Capital Emerging Markets Private Equity Survey Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  10. 10. Marketplace: materiality of ESG issues – S.African pension funds, 2007 Q: Please indicate the extent to which you feel the following ESG issues are important in evaluating the likely performance of investments: 75% 25% Corporate Governance 69% 6% 25% S us tainability 56% 16% 28% Infras tructure Development 50% 25% 25% HIV/Aids 50% 22% 28% BE E and Gender E mpowerment Is s ues 47% 28% 25% E mployee Relations 44% 22% 34% E nvironmental Management 34% 31% 34% Human Rights 31% 28% 41% Health Is s ues 25% 31% 44% Climate Change 22% 44% 34% Very Important S omewhat Important Not Important NOTES: telephone interview with pension fund trustees and principal officers H1 2007; n = 32. SOURCE State of responsible investment1 in South Africa in 2007? UNISA/UNEP Fi/NOAH Financial, Oct 2007. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  11. 11. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  12. 12. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  13. 13. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  14. 14. Opportunities: investment in Africa today • Investors in private, public and philanthropy sectors have roles to play in applying ESG factors to investment across private equity, listed equity, debt and all assets classes. • Sustainable investment better matches the need for longer term investment approaches building businesses capacity to compete locally and regionally. Opportunities often arise from the structural characteristics + Micro Economic + Stock Market + Investment = Macro Economic Growth Returns Environment Characteristics Approach • African markets are: – under-penetrated & under-leveraged (on country, company and consumer level) – have a fast growing demand for goods and services • African businesses benefit from long term • There are high barriers to entry for operators (for the time professional and value adding investors being) • African Markets are attractive to private equity – limited competition among leading corporate suppliers investors – yielding both pricing power and volume growth – thus faster than average profit growth and high return on equity • Economic growth and barriers to entry • And also high barriers to entry for investors (for the time • Restricted access to capital being) • Current market conditions allow for disciplined – Information, travel – Accommodation, visas investment strategy by long term private equity investors SOURCES: Chris Dirksen, Investec Private Equity Africa presentation to PE Congress Masterclass 10 Feb 2010, Cape Town, S.Africa Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  15. 15. Lee Stoetzel, Dictionary (2) 2007 
mahogany and zebrawood
 Artwork Number: LSTO.0032 Thank you Graham Sinclair SinCo graham.sinclair@sinclairconsult.com CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission is strictly prohibited. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  16. 16. Project team: about Graham Sinclair • Graham Sinclair is a sustainable investment strategist, ESG architect and global project leader at Sinclair & Company [SinCo]. Graham has eight years specialist experience in sustainable investment globally after six years in pensions consulting and investment banking in Africa. Recent consulting engagements in sustainable investment include: – Leading IFC-funded research into private equity and liquid equity ESG strategies in sub-Saharan Africa in South Africa, Kenya and Nigeria to be published in Q2 2010. – Developing innovative financing mechanisms strategy and ESG index architecture for developed, emerging and frontier markets for a Swiss-based international organization. – For a global institutional investment firm in New York with a USD 1 trillion AUM portfolio, designing ESG architecture across private equity, liquid and global real estate portfolios covering philosophy and process innovations and investment strategies. – As consultant to the UN, developed strategy for 25 emerging markets and launched PRI in Emerging Markets project in Q3 2007, creating a network infrastructure, building relationships with 108 investor stakeholders including in Africa through 2008. – Lecturing on ESG in investment strategies at investment practitioner symposia and leading business schools in Europe, Africa and the US. Currently developing case studies on ESG investment in emerging markets for his forthcoming book. • Before starting his eponymous investment advisory boutique SinCo in 2006, he was Product Manager at KLD Research & Analytics, Inc, based in Boston. He is a former contributor to the CSR Initiative at Harvard Kennedy School, Distinguished Member of Net Impact, alum of WWF One Planet Leaders programme and the Tallberg Forum New Leaders Program. He holds diplomas in retirement funds and insurance law, and in 1998 he was one of the youngest ever dual-FILPAs. He currently leads the AfricaSIF Project building a not-for-profit Africa Sustainable Investment Forum network. • Graham earned his MBA on scholarship at Villanova University USA where he co- managed the Arnone-Lerer SRI Fund equity portfolio in 2004. He holds a B.Com from the University of Natal and LL.B from its Howard College School of Law as well as numerous industry specialist certifications. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  17. 17. Credentials: what people are saying about SinCo/Graham Sinclair • “Graham is an exceptional professional in all that he does. His work is at the crossroads of business intelligence, finance and investments and sustainability. His ability to clarify objectives and execute on solutions has demonstrated the fruitful success of the business case for sustainability.” – Director and Senior Investment Analyst, global institutional asset manager, New York City. • Graham served as a strategic adviser to a large US Asset manager as we worked together on developing their sustainable investment strategy. He provided on-going support to their internal team and served as a knowledgeable and helpful sounding board as their staff tried to move sustainability forward – - Senior Client Relationship Manager, Global ESG ratings and research provider, London • Graham is a very focused, passionate and results driven promoter and believer in the change role that a shift to of Responsible Investments can and will effect in our globalising world. He is comfortable with holding a strong opinion yet cable of being a consensus builder – - Portfolio Manager, Responsible Investment equity portfolio, Cape Town. • "For many investors, getting to grips with ESG issues in emerging markets is a top priority. [He] was crucial in encouraging new partnerships in diverse markets..." – Clean tech private equity fund manager and former Executive Director, ASRIA, Hong Kong. • Graham has shown a fantastic drive and commitment to the PRI initiative. He clearly helped promote the ESG thematic to the top of our priorities. – - Chief Risk Officer, hedge fund-of-funds investment house, Zurich. • “Graham is a hard-working, dedicated investment professional. He approaches his work with a creative pragmatism and is committed to promoting the importance of Responsible Investment thoughout the value chain. – - Project team member, Principles for Responsible Investment, Geneva. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  18. 18. Credentials: what people are saying about SinCo/Graham Sinclair • “Graham was instrumental in the planning, kick-off and growth stages of AIG Investments' multi-phased strategy of factoring ESG analysis into the investment decision process. His deep knowledge of sustainability issues, business strategy, risk assessment, and stakeholder engagement helped to form the basis for a highly successful integration of robust environmental, social and governance analysis. Graham quickly mastered our internal needs and requirements, understood our culture, and made broad contributions in equities, fixed income, real estate and alternatives. He was generous in sharing his ideas and stepping up when we needed his expertise, which was transferable across sectors and asset classes.” – Vice President, Asset Management for major global institutional investor, New York. • “Graham has one of the most fantastic international networks that I've ever encountered. His understanding of, and passion for, responsible investment makes him one of the most knowledgeable in the field. I've always been impressed with his delivery and focus.” – - Head of Governance and Sustainability, pan-African banking group & UNEP FI member, Sandton. • "Graham was extremely helpful in helping get up the curve on our sustainability initiative. Graham was very knowledgeable and insightful and allowed us to quickly get up the curve on Sustainability." – Chief Administrative Officer, Global Real Estate, trillion-dollar global institutional investor, New York. • "Graham is one of our leading thinkers on SRI. The work that Graham is doing will transform SRI and take it to the next level." – Managing Director, equity investment manager, Boston. • "Graham Sinclair's work is excellent." – Executive Diretor, billion-dollar global foundation, Philadelphia. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
  19. 19. SinCo helps: leading clients tackle some of the toughest challenges • Developed strategy for assessing innovative financing mechanisms to attract new capital in new ways. Designed global ESG index architecture for developed, emerging and frontier markets covering nutrition sector. • Prepared strategy and lead the Africa Sustainable Investment Forum (AfricaSIF) project team developing pan-African network for investment stakeholders. AfricaSIF • Supported stakeholder engagement connecting investors, analysts and companies assessing practice of investment valuation globally. • Lead responsible investment prescribed assets working group exploring positive role for economic development regulations for investment industry in S.Africa. • Designed sustainable investment ESG architecture across trillion-dollar AUM, 200 analyst private equity, equity, fixed income and global real estate asset classes. • Provided peer benchmarking for ESG strategy and developed change management program for multi-office, multi-region ESG roll-out. • Developed sustainable investment masterclass for seminar at leading MBA programs from 2006; currently teaching in US and Europe. • Developed strategy for 25 emerging markets in 2007 and launched EM project for sustainable investment by institutional investors. Created network infrastructure, stakeholder relationships and built PRI in EM through 2008. • Conducted seminal study of sustainable investment in sub-Saharan Africa [S.Africa, Nigeria, Kenya] across PE and listed equities in 2010 in partnership with RisCura; conducting primary research interviewing over 50 investors. Sinclair & Company LLC The Leading ESG Investment Architect in Emerging Markets sinclairconsult.com ©2010
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