Due Diligence: Spotting opportunity in Africa’s frontier economies

Sebastien Boye

How we made it in Africa’s ‘Due Diligence’ series asks top players in Africa’s private equity industry about how they are mastering the art and science of profitable dealmaking and fundraising. Doing the due diligence on those who do due diligence for a living.

This article is published in association with Africa Private Equity News, a one-stop source for industry-related information. Stay up to date by downloading the free Africa Private Equity News app: Android | iOS | Scan QR code from desktop


Investisseurs & Partenaires (I&P) is an impact investment group dedicated to African SMEs, with a strong focus on hard-to-reach and fragile countries. Through several investment vehicles, I&P invests between €50,000 to €3 million as a minority shareholder. Since 2002, the firm has backed around 100 companies in 16 sub-Saharan African countries.

In an interview with How we made it in Africa, Sebastien Boye, I&P’s chief investment officer, discussed the investment opportunities in frontier economies and revealed the one deal he wishes he invested in. Below are slightly edited excerpts.

What is the greatest investment lesson you’ve learnt?

If I had to pick one, I would say the quality of management. It is not the most original answer but by far the most important factor for success (or failure). This is even truer for the young and high-growth companies in which I&P invests. Being a successful entrepreneur in a difficult environment, such as the countries where we operate, requires extraordinary talent, resilience and commitment.

Identify an untapped opportunity for private equity investors in Africa.

In most of the countries in which we operate, we are the only investor targeting small caps. If you are targeting an investment ticket size of more than $5 to $10 million, it is very difficult to invest in countries like Mali, Burkina Faso, Cameroon or Madagascar, for instance, simply because there are very few local companies that are mature enough to attract such investments. And yet there are great entrepreneurs and great opportunities (and low competition). But you have to be ready to invest smaller amounts, and this will eventually hurt your net IRR. At I&P we believe, however, that we can offer our investors extra value through the impact we create … by fostering entrepreneurship in these difficult countries.

What is the biggest misconception about your job?

Being an impact investor does not mean that you are going to compromise on value creation. Our choice to focus on small deals means that we have to be very good at delivering very strong gross IRRs to be able to serve decent net IRRs to our investors. It means that we only invest in companies that can create significant value by their growth potential and the strategic position they build in these underserved countries.

Name the one deal you wish you invested in.

Azalaï Hotels is a fantastic entrepreneurial story, started by Mossadeck Bally, a great Malian entrepreneur. [Ed note: Mossadeck Bally is one of the entrepreneurs featured in How we made it in Africa: The book. Get your copy here.] He understood very early that the lack of hotels targeting African businesspeople in West Africa was a great opportunity. He started by buying a state-owned hotel in Bamako in the late 90s and built a West African leader managing 10 hotels and competing with international groups who are increasingly targeting the continent. This is a great example of the kind of opportunities that can exist in the Sahel, which is not a region which is seen as attractive.

What are the skills needed to succeed in Africa’s private equity industry?

Resilience, humility and the ability to keep it cool. Most of the companies in which you will invest will face a crisis at some point, especially if they are fast-growing and still small. Crisis management is a key element you have to be ready to cope with, and obviously as an active investor supporting management, your support is key during these difficult times.


This article is published in association with Africa Private Equity News, a one-stop source for industry-related information. Stay up to date by downloading the free Africa Private Equity News app: Android | iOS | Scan QR code from desktop