1. Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier Director, FSD Africa Mark@fsdafrica.org

2. Agenda Why undertake this survey? Who participated? What are the key findings? Discussion

3. Who participated? RESPONDENTS BY FIRM TYPERESPONDENTS BY LOCATION n = 118

4. Finding 1: Use of offshore jurisdictions is standard practice for SSA’s PE industry Offshore Onshore

5. Finding 2: The prevalence of offshore structures is largely due to tax efficiency

6. Finding 3: The vast majority of the industry views Mauritius favourably “South African tax authorities treat Mauritius with suspicion no matter what the tax treaties say.” “We have concerns over the level of expertise and availability of professionals in private equity.” “The partnership law remains untested.” “High overhead costs.” “The industry has found a very safe model in Mauritius that works and that everybody loves.” “Mauritius has wholeheartedly embraced FATCA, so it is ahead of other jurisdictions on that front, as well as on money laundering, anti-bribery and other investor protections. Mauritius has really tried to be at the forefront of these issues.”

7. Finding 4: Concerns about Mauritius appear to be stronger amongst DFIs

8. Finding 5: The majority of respondents are open to funds domiciled onshore GP PERSPECTIVESLP PERSPECTIVES

9. Finding 6: South Africa is viewed as the most attractive onshore domicile

10. Finding 7: Legal / regulatory conditions inhibit the use of onshore domiciles RankMarketTop Factors Inhibiting Greater Use of Domicile (% of Votes) 1 South Africa 2 Kenya 3 Botswana

11. Finding 8: Third-parties should work to enhance legal & regulatory / tax reforms

12. Discussion