Aureos africa health fund presentation at uhf may conference


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Aureos africa health fund presentation at uhf may conference

  1. 1. Private Equity Investing in Healthcare Africa Health Fund: Building SustainableBusinesses In Healthcare 1
  2. 2. Investing in Private Healthcare in AfricaTrends 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. 3. Overview of Financing OptionsDebt 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. 4. Differences Between Debt and EquityClear distinction between the two sources of capital DEBT EQUITYInterest Rate Yes NoInterest Payments Yes NoPrincipal Payments Yes No% of Equity in Business No YesDividend Payments No YesSeat on Board of Directors No YesSell Shares to Another Buyer No Yes
  5. 5. Spectrum of Equity FinancingBased 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. 6. Why You Should Consider Private EquityPrivate 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. 7. The Africa Health Fund (AHF) Aureos Committed to Private Health Care Investment Overview ObjectivesFund Size: US $105.4 million - Invest in socially responsible and financially sustainable private healthInvestors: 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, DBSADeal Size: $250K - $5MDeal Type: Equity and Quasi-Equity (Debt+Equity)Deal Term: 3-7 years
  8. 8. Health Fund Investment ProfileAureos 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. 9. Technical Assistance FacilityFurther 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. 10. Thank You Contact Information: Shakir Merali PartnerAureos Kenya Managers Limited Tel: + 254 20 222 8870Email:•This financial promotion is issued by Aureos Advisers Limited which is authorised and regulated by the Financial Services Authority (“FSA”). AllAureos Funds (the “Funds”) are defined as “Unregulated Collective Investment Schemes” (“UCIS”) and the promotion of a UCIS either within theUK or from the UK is severely restricted by statute. Consequently, this document is only made available to professional clients and eligiblecounterparties as defined by the FSA and also to persons of a kind to whom the Fund may lawfully be promoted by an authorised person by virtueof Section 238(5) of the Financial Services and Markets Act2000 and COBS 4.12.1R. Shares or Interests in the Funds should only be purchasedby persons with experience of participating in unregulated schemes and any other person who receives this document should not rely upon it.