International financial consultancy and investment advisory group, deVere, has identified Africa as having the most potential for their business, according to Craig Featherby, head of the deVere Group’s Africa operations. The group, which has been steadily expanding across sub-Saharan Africa since it first entered the continent five years ago, has noticed an increase in the number of high net worth individuals across Africa.
Featherby has been the group’s African head since 2008 when deVere first entered South Africa. “Competitors here in South Africa said, ‘Craig, you’re mad, the opportunities do not exist in South Africa and Africa, there are no people with money’,” Featherby told How we made it in Africa. “Well that’s very different because we found an incredible amount of people operating within oil and gas industries… just complete commodity-driven industries that are making more and more money.”
The continent’s natural resources and commodities have caught the attention of large multinational players who have been trickling into various African markets over the past few years.
“And if you think about it – with the overall attraction to commodities in Africa – that brings foreign owned companies, which brings foreign employees. And these employees are paid exceptionally well because internationally there is still this idea that there are lions and tigers running around the streets of Johannesburg and therefore I have to pay you four times more to go and live in Johannesburg than to live in Dubai,” he explained. “So for the last five years that we have been here in Africa we have seen a huge demand in terms of high net worth individuals.”
Featherby said that as an offshore financial advisory firm, most of their clients have typically been expats or internationally minded individuals. However, what is interesting for deVere’s business on the continent is the growth in the number of local high net worth individuals in Africa.
“We are now seeing a dramatic shift towards the local population,” he said. “The local population are looking for more; they are looking for better opportunities; they are looking to engage in the international markets, and therefore they are looking for an international broker that can take them there.”
He added that when deVere first entered Africa, 90% of their high net worth clients were expatiates. However, while deVere’s clients are now roughly 60% expats and 40% local, Featherby reckons that in two years this will shift the other way round, in favour of local clients.
Africa’s growth potential
Over the last five years, Featherby has assisted with deVere’s expansion across seven markets in Africa – South Africa, Botswana, Angola, Mozambique, Zimbabwe, Uganda and Ghana – with further plans to open 10 more offices across the continent over the next five years.
“We believe that Africa represents truly the last sizeable investment opportunity for international investors,” said Featherby. “We believe that Africa is where the Far East was 25 years ago… the next 25 years is really going to be a lot of fun.”
He added that deVere has experienced “phenomenal growth” in South Africa. “We currently manage R1.3 billion [US$136 million] worth of private client assets… which is a large number. We experience – in some years – over 100% growth and therefore the biggest surprise for me was that I came into the industry with people telling me that it can’t be done and now I’ve experienced what we have done. So South Africa to me has been a phenomenal experience and I have enjoyed it… but we have actually only really scratched the surface here in South Africa.”