Henshaw Capital Partners, organisers of the Nigerian National Private Equity Initiative, will on Thursday host a seminar in Lagos for private equity fund managers on private equity fund registration.
The seminar aims to raise awareness of the requirements, processes and support available to register a private equity fund and fund manager in Nigeria and is the 15th private equity seminar the company has organised in Nigeria.
The seminar is co-sponsored by the Securities and Exchange Commission (SEC), which is a regulator of the private equity industry in Nigeria and will feature Agusto & Co, Nigeria's foremost credit rating agency and K & L Gates LLP, a leading US law firm.
The Nigerian National Private Equity Initiative to raise awareness of private equity and venture capital finance to grow businesses and create jobs is supported by the Federal Ministry of Finance.
Barbara James, former Managing Director of the African Venture Capital Association and founder and CEO of Henshaw Capital Partner, in a statement yesterday, said: "Nigeria has the capacity to build a $20 billion private equity industry by 2020, but to achieve this, we estimate Nigeria needs to produce 15 to 20 new SEC registered private equity fund managers a year in the next few years.
"This is why we are organising this seminar, to inform aspiring and existing fund managers of the private equity opportunity in Nigeria and the requirements for fund registration. Private equity fund managers who do not register with the SEC cannot access the over $1 billion currently available for private equity from local Nigerian institutional investors.
"Also international institutional investors are more likely to invest in funds that can secure local institutional investment, so at Henshaw, we encourage existing and new private equity fund managers to go and register with the SEC. By attending the seminar, they will learn what they need to do to register and be able to ask questions about any part of the registration process."
Private equity is a special type of finance for businesses that have the potential to grow exponentially. The private equity financier provides finance in exchange for shares in the business being financed.
Unlike loans, there was typically no interest, collateral or monthly repayment involved in private equity finance. The financier makes their profit when they sell their shares in the business for more than they bought it, typically after a few years.
South Africa has the largest private equity industry in Africa with over 80 fund managers managing about $11 billion. Brazil has about 100 private equity fund managers managing over $34 billion.
Private equity is an important component of a country's financial landscape, especially in Nigeria where access to finance for business was a key barrier to private sector growth.
Nigeria's bank lending and market capitalisation of listed companies as a percentage of GDP was 20.8 per cent and 21.5 per cent respectively, compared to South Africa's which was 151.1 per cent and 159.3 per cent respectively.