1. Private Equity and Agriculture: Challenges and Investment Opportunity in Africa October, 2010 Financing agriculture in Southern Africa Malawi SOUTHERN AFRICA REGIONAL DEVELOPMENT BRIEFING N° 3

2. 1 Private Equity: Securitisation of agriculture as a salable product and as a business.

3. 2 Presentation Structure Introduction Challenges Opportunities Capital formation. Conclusion.

4. 3 Introduction Joint venture between Emergent Asset Management of UK and Grainvest of South Africa. Private equity fund management business. Sub-Sahara Africa focus. Value chain-Primary producer, food distribution, food processing. Products include: grains, banana, tea, macadamia, livestock, fruit & vegetables. Unique structured operational model. Asset Manager Agriculture operating company Regional hubs-shared resources

5. 4 Challenges Risk aversion translating to high financing costs. Market imperfections. High cost of doing business. Institutional voids. Unpredictable geo-politics Government and policy inconsistency Land tenure systems Poor infrastructure Community involvement Technology, skills transfer, education & literacy Blending all stakeholders -private, public, communities and channelling funds to grass roots level

6. 5 Opportunity Taking the lead to extract value and on sell. Innovative strategic partnerships utilising existing equity, structural capacity and value chains. Transmission of technology and best practise. Full endorsement of a sustainable agenda. Participation on the whole value chain Social Responsible Investment funds Trade liberalisation and Regional integration and harmonisation Entrepreneurship- Spotting and filling institutional voids Entrepreneurial approach to farmer organisation-ability to execute outgrower schemes.

7. 6 Capital Formation Private EquityDebt Developmental Finance Institutions Banks Private Equity Social Responsible Investment Funds Private Equity Take the lead utilising own equity creating collateral and track record. Brings together multiple financial participants with larger investment appetite. More hybrid structures inclusive of all stakeholders such as NGO’s, communities and government.

8. 7 Conclusion Key role of intermediating financial players role initiating and stimulating further investment and funding from other players. Private equity as a credible transmission mechanism: o Attracts and fosters agriculture investment and participation. o Economic development. o Accountability corporate government. o Capacity building. o Generates economies of scale Smallholder access to inputs and to markets. Community upliftment and poverty alleviation.

9. 8 Zikomo Thank you