The Ledger
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Miah: Africa is currently the most exciting emerging market for investment
“The Middle East where I was based is still predominantly emerging market in terms of trades, and obviously Africa is probably the most exciting emerging marketplace for us.”
Smith: One-third of the investable African equity universe has zero sell-side analyst coverage
“Out of our opportunity set, a third has zero analyst coverage whatsoever.”
Smith: Our portfolio would gain 50% just by re-rating to historical median valuations
“If our portfolio today, just re-rated to their own historic valuations, would be up over 50%. In dollar terms.”
Smith: All Africa Partners avoids Zimbabwe over currency repatriation and liquidity risks
“In terms of picking countries, I mentioned we didn't invest in Zimbabwe at the moment, and that's really on the basis of liquidity. Because we're investing in listed markets, and we promise to give money back to our investors if they ask for it back, we need t…”
Miah: We explicitly avoid commodities to focus on other African macro themes
“Commodities is the only one where we explicitly avoid and everything else is game. Everything else is open to investments, but we do maybe have a bias towards areas or sectors which are exposed to the big themes in Africa.”
Miah: We favor African companies where the founding family retains 20% to 40% ownership
“Generally, we do like companies where the management team are part of the founding family, and they still own 20, 30, 40% because of the alignment of incentives and interests.”
Miah: African equities outperformed other emerging markets in 2022
“Post-nineteen there was COVID, a lot of noise, but definitely this year is the first year in many that you've had outperformance by Africa. And very importantly to us, the bottom line continues to grow. The jaws are widening, but the bottom line continues to g…”
Miah: African equities generated a 7% to 9% USD CAGR from 2002 to 2020
“Between 2002 and 2020 the two decades overall, despite the last five years being quite difficult, it's been a reasonable period. So the market as a whole, if you just took the beta, the two 50 names that we're looking at, And the market grew at seven, eight, n…”
Smith: Our African portfolio trades at half the valuation and triple the yield of MSCI ACWI
“Basically, Ted, our portfolio trades at half the price and triple the yield of ACQUI.”
Miah: All Africa Partners' portfolio generates a 33% ROE at an 8x P/E
“In terms of the portfolio, so our 10 stock portfolio, the current ROE is 33%. Into the dividend yield, we're talking about eight, nine percent dividend yield... And in terms of, again, valuations, the PE of the portfolio is today at eight, nine times PE.”
Smith: Eight of ten All Africa portfolio CEOs were educated in the US or Europe
“Eight out of the 10 CEOs of the companies in which we invest in today were educated in either Europe or the US.”
Smith: South Africa accounts for roughly 60% of investable African equities
“South Africa is a very, very big part of that, about 60% in terms of number of names, as well as market cap.”
Miah: The African investable equity universe totals $500 billion across 260 companies
“The opportunity set, so when we exclude small caps and we exclude commodities, Today, there's around 260 names. In the early 2002, there's about a hundred names. So in terms of names, not significant growth, but when you look at market cap, more importantly, p…”