Conduits of Capital

TAKING ACTION: STRENGTHENING THE
POTENTIAL FOR ONSHORE DOMICILES
Industry stakeholders who are interested in catalysing
greater capital flows into private equity funds focussed on
Sub-Saharan Africa recognise that fund domiciles matter
in the capital allocation process (see Spotlight: Do Fund
Domiciles Drive LP Allocation Decisions?).
“I think that a big part of the solution—and I say this as an
African—is for us to make our jurisdictions better, full stop.
This all comes back to the fundamental business environment.
We as Africans need to take ownership of this issue
and fix it.”
– Local LP Perspective
Mirroring the findings on the most important considerations
in a fund domicile and the factors inhibiting greater use
of the most attractive
onshore African domiciles,
respondents suggest
that the top two actions
an interested third-party
could take to enhance the
use of onshore domiciles
are strengthening legal
and regulatory reforms
and implementing tax
reforms, which received 69% and 56%, respectively, of
survey respondents’ selections.
One segment witnessing a notable difference of opinion is
that between local sources of capital and international LPs.
Sub-Saharan Africa-based LP respondents attach greater
value to strengthening legal and regulatory reform as well
as supporting professional and technical skills development,
while global investors favour tax reforms and access to
better market information.
PERSPECTIVES ON THE MOST NECESSARY
ENHANCEMENTS BY FIRM TYPE
When segmenting responses by type of firm, the general
consensus for legal and regulatory reforms remains;
however, GPs and SPs attach greater significance to the
necessity of implementing tax reforms than LPs, who remain
most concerned about
the legal and regulatory
environment. In
addition, LP and GP
respondents would
value access to better
market information
and the development
of local human capital.
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