1. Private Equity Investing
in Healthcare
Africa Health Fund:
Building Sustainable
Businesses In Healthcare
1

2. Investing in Private Healthcare in Africa
Trends and Opportunities
• Improving investment climate Breakdown of Private
• Increasing political stability
Investment Opportunities in
Africa
• Experiencing continual GDP growth
• Foreign investment in Sub-Saharan 100%
Medical
Africa increased from $6b in 2000 to 90% Education
$18B in 2005
80%
• Demand exceeds supply - need to 70% Risk Pooling
expand capacity of sector
60%
• In Uganda, over 65% of the population 50% Life Sciences
uses private health care
40%
• Need $11B-$16B in new health care
30% Distribution
investments to meet growing demand
20% and Retail
10%
Health
0% Services
*Source: IFC Health in Africa Report Provision
By Sector

3. Overview of Financing Options
Debt vs. Equity
Debt Equity
• Source: Banks • Source: Private investors
• Provides loan to company • Provides funding to company
• Bank is not involved in in exchange for equity stake
company, but loan is made (example: $5M for 30% stake
against an asset and must be in company)
paid in good and bad times
How the Bank Makes its Return: How the Private Investor Makes its
Return:
• Receives principal and interest • Sells shares back to company or
payments over a set time period another buyer
• Receives dividends from company

4. Differences Between Debt and Equity
Clear distinction between the two sources of capital
DEBT EQUITY
Interest Rate Yes No
Interest Payments Yes No
Principal Payments Yes No
% of Equity in Business No Yes
Dividend Payments No Yes
Seat on Board of Directors No Yes
Sell Shares to Another Buyer No Yes

5. Spectrum of Equity Financing
Based on Company’s Stage in Development
Early Stage: Venture Capital Later Stage: Private Equity
Startup Stage Later Stage
Seed Stage Expansion Stage
• Financing available from venture • Financing available from private
capital firms (VCs) equity (PE) firms
• VCs prefer start ups and are willing • PE firms prefer
to take on more risk in exchange for established, profitable companies
a higher return • Not willing to take on high
• Examples: Bridgeworks risk, expect lower returns than VCs
Africa, Bioventures • Examples: Aureos Capital, Abraaj

6. Why You Should Consider Private Equity
Private equity can accelerate your growth
• Have flexibility if there is an economic downturn
• Company’s credit rating improves and it becomes more attractive to
banks and investors
• Improved governance practices
• Private equity firms have networks that you can tap into
• Technical assistance is provided
• Follow on funding can be provided to support your growth

7. The Africa Health Fund (AHF)
Aureos Committed to Private Health Care Investment
Overview Objectives
Fund Size: US $105.4 million - Invest in socially responsible and
financially sustainable private health
Investors: IFC, Gates Foundation, African care companies in Africa.
Development Bank, DEG, Elma - Expand health care services and
Foundation, Maria Wrigley products so that low income
Trust, ASN Bank, Proparco, populations in Africa have access.
Norfund, DBSA
Deal Size: $250K - $5M
Deal Type: Equity and Quasi-Equity
(Debt+Equity)
Deal Term: 3-7 years

8. Health Fund Investment Profile
Aureos in the Health Sector in Africa
Target Investee Profile Subsectors of Focus
• Privately owned
• Operating at least 2 years Healthcare
Delivery Risk Pooling
• Generating at least $1M in turnover Service
• Profitable
Diagnostics Manufacturing
Retail
Distribution
Pharmacy
Health ICT
Business
Services

9. Technical Assistance Facility
Further Support for Portfolio Companies
• Provides a range of business development services to portfolio companies by
strengthening and developing business growth strategies, including:
• Strengthening of financial controls
• Enhancement of operations, finance and management systems
• Building and strengthening management capabilities
• Assisting with product and services development
• Performing feasibility studies, industry research, maintain international health related
compliance standards
• Appointment of experienced practitioners/advisers at board or senior management
level
• Technical Assistance Facility will enable the Fund to:
Provide guidance, training and value addition in portfolio companies’ key operational areas
Maximise impact of increasing access to quality healthcare within low income populations

10. Thank You
Contact Information:
Shakir Merali
Partner
Aureos Kenya Managers Limited
Tel: + 254 20 222 8870
Email: shakir.merali@aureos.com
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