Preqin Special Report: Natural Resources in Africa

Transcription

1 Content Includes: Land of Opportunity Preqin Special Report: Natural Resources in August 2016 Although fundraising in recent years has proved challenging, there is significant opportunity for firms operating on the continent amid increasing exploration of resources. raising The majority of natural resources funds closed focused on invest in agriculture/farmland. Managers Southern is home to nearly half of natural resources fund managers based on the continent. Investors Investors based in are more likely to make direct investments than other investors worldwide. alternative assets. intelligent data.

2 Preqin Special Report: Natural Resources in Download the data pack: Foreword With much of s abundant natural resources still undiscovered, or barely harnessed, and exploration taking place in a number of countries that aim to increase their output or become first-time producers, there exists considerable opportunity for unlisted firms operating across all commodities and stages to make investments on the continent. While the unlisted natural resources industry focused on n investment showed signs of growth until 2013, recent years have proven more challenging for fund managers, with only six funds closed in 2015 securing $700mn in institutional capital commitments, and no funds closed in 2016 so far. There are, however, 16 funds in market collectively seeking more than $5bn in commitments, which could improve 2016 fundraising figures. This is due to a combination of factors: volatile commodity prices, the exaggerated risk of n investment, the relative youth of natural resources as a distinct asset class, as well as the still nascent private capital industry on the continent. Sixty-nine percent of -based natural resources firms on Preqin s Natural Resources Online are currently raising their first unlisted natural resources vehicle, or have only closed one fund previously; this will have an effect on institutions globally that place long track records in local markets at the forefront of their investment decisions. Investors will be closely monitoring the performance of funds raised by -based managers in order to capture the upside potential of natural resources investment on the continent. Preqin s Natural Resources Online is an indispensable tool for all firms looking to market funds, develop new business or find new partners in the coming months. Behind every data point in this report is a wealth of individual firm- and fund-level data available on Preqin s leading online services. We hope you find this report useful and welcome any feedback you may have. For more information, please visit or contact info@preqin.com. Key Facts $8.5bn Aggregate capital raised by 37 -focused unlisted natural resources funds since Number of -focused agriculture/farmland funds closed since 2008, the most of any strategy. 69% Proportion of -based natural resources firms that are first-time fund managers. 39% Proportion of -based institutions investing directly in the asset class, compared with 2 of all other natural resources investors. Contents -Focused raising 3 Global s Investing in 5 -Based Managers 8 -Based Investors 9 Global Investors Targeting 10 All rights reserved. The entire contents of Preqin Special Report: Natural Resources in, August 2016 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Special Report: Natural Resources in, August 2016 is for information purposes only and does not constitute and should not be construed as a solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent financial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Special Report: Natural Resources in, August While reasonable efforts have been made to obtain information from sources that are believed to be accurate, and to confirm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Special Report: Natural Resources in, August 2016 are accurate, reliable, up-to-date or complete. Although every reasonable effort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Special Report: Natural Resources in, August 2016 or for any expense or other loss alleged to have arisen in any way with a reader s use of this publication Preqin Ltd. /

3 Download the data pack: Preqin Special Report: Natural Resources in -Focused raising The -focused natural resources fundraising market is relatively small; Preqin s Natural Resources Online contains detailed information on the 37 unlisted natural resources funds closed since 2008 that focus on the continent, securing $8.5bn in institutional capital commitments (Fig. 1). raising reached its peak in 2013 when 10 vehicles raised $5.7bn, far above the average amount raised annually, although the vast majority of this total was secured by just one fund, China- Development. No focused natural resources funds have closed in 2016 so far. However, there are 16 -focused funds in market targeting $5.4bn in capital, and with time still to pass until the end of the year, fundraising for 2016 could yet improve. The majority of -focused funds closed since 2008 target agriculture/ farmland investments: 15 such funds have closed raising a combined $758mn (Fig. 2). However, due to China- Development pursuing a diversified investment remit, the majority of capital has been raised for funds that pursue a broader natural resources strategy across several sectors. International participation in focused opportunities has fluctuated annually, with international fund managers responsible for an average of 43% of all funds closed since 2008 (Fig. 3). From 2008 to 2010, based natural resources firms raised the majority of -focused capital. However, since 2010, international managers have accounted for the vast majority of capital raised (Fig. 4). Fig. 1: Annual -Focused* Unlisted Natural Resources raising, YTD (As at 13 July 2016) Fig. 2: -Focused* Unlisted Natural Resources raising by Primary Strategy, YTD (As at 13 July 2016) YTD No. of s Closed Aggregate Capital Raised ($bn) Agriculture/ Farmland Energy Metals & Mining Timberland Diversified Natural Resources No. of s Closed Aggregate Capital Raised ($bn) Year of Final Close Primary Strategy Fig. 3: Number of -Focused* Unlisted Natural Resources s Closed, YTD (As at 13 July 2016) Fig. 4: Aggregate Capital Raised by -Focused* Unlisted Natural Resources s, YTD (As at 13 July 2016) Proportion of s % % 4 33% 67% 83% 17% YTD Year of Final Close International Managers Domestic Managers Proportion of Aggregate Capital Raised % 17% 89% 83% % 31% 91% 9% 78% 86% 22% 14% YTD Year of Final Close International Managers Domestic Managers *s with a primary geographic focus on or substantial investment in (excl. geographically diversified funds with exposure to n natural resources) Preqin Ltd. / 3

4 Preqin Special Report: Natural Resources in Download the data pack: Fig. 5: 10 Largest -Focused* Unlisted Natural Resources s Closed, YTD (As at 13 July 2016) China- Development Pan n Infrastructure Development Meridiam Infrastructure AMED II Firm China Development Bank Capital Size (mn) 5,000 USD Strategy Agriculture/ Farmland, Energy, Metals & Mining Geographic Focus Final Close Date Headquarters Dec-13 China Harith 630 USD Energy, Water Mar-09 South Meridiam 300 EUR Energy Oct-15 France n Minerals Exploration & Development 300 USD n Agriculture Phatisa Group 246 USD Central Agriculture Vantage GreenX Debt n Renewable Energy GEF Sustainable Forestry AMED I SilverStreet Capital Vantage Risk Capital 215 USD 2,160 ZAR Energy, Metals & Mining Agriculture/ Farmland Agriculture/ Farmland Botswana, Democratic Republic of Congo, Eritrea, Liberia, Mozambique, Namibia, Nigeria, South Aug-14 Luxembourg Sub-Saharan Sep-13 South Malawi, Mozambique, Tanzania, Uganda, Zambia Sep-12 Energy South Nov-13 South Berkeley Energy 200 USD Energy Sep-15 UK Global Environment n Minerals Exploration & Development 160 USD Timberland 150 USD Metals & Mining Gabon, Ghana, Malawi, Mozambique, South, Swaziland, Tanzania, Uganda, Zambia Botswana, Democratic Republic of Congo, Eritrea, Liberia, Mozambique, Namibia, Nigeria, South Nov-11 Dec-12 UK US Luxembourg Fig. 6: 10 Largest -Focused* Unlisted Natural Resources s in Market (As at 13 July 2016) Firm Target Size (mn) Strategy Geographic Focus Headquarters Nigeria Infrastructure Pecora Capital 2,000 USD Agriculture/Farmland Nigeria US Pan n Infrastructure Development II Pembani Remgro Infrastructure Harith 1,000 USD Energy, Water South Pembani Remgro Infrastructure Managers 400 USD Energy, Metals & Mining, Water Tembo Capital Mining II Tembo Capital 400 USD Metals & Mining Acorn Agri Investment Company ARM-Harith Infrastructure GEF Sustainable Forestry II Sub-Saharan, Emerging Markets South Acorn Private Equity 3,000 ZAR Agriculture/Farmland Sub-Saharan South ARM-Harith Infrastructure Investments 250 USD Energy, Water Sub-Saharan Nigeria Global Environment 200 USD Timberland Sub-Saharan US Agri-Vie II EXEO Capital 175 USD Agriculture/Farmland, Timberland Sub-Saharan UK South Infra Plus DSC Investment Partners 150 USD Energy Sub-Saharan South Korea GEF Growth Global Environment 150 USD Energy Sub-Saharan US *s with a primary geographic focus on or substantial investment in (excl. geographically diversified funds with exposure to n natural resources) Preqin Ltd. /

5 Download the data pack: Preqin Special Report: Natural Resources in Global s Investing in The unlisted natural resources fundraising environment focused exclusively on is relatively small (see page 3); however, there are many natural resources funds that have reached a final close that operate with a globally diversified investment remit that may include as part of wider geographic focus. As can be seen in Fig. 7, global-focused funds make up the vast majority of the funds closed and aggregate capital raised that may target investment in. Solely -focused funds represent on average 21% of funds closed since 2008, but only 4% of aggregate capital raised. In total, 121 vehicles with a global investment remit have reached a final close since 2008, securing $135bn in capital commitments; the greatest amounts of capital were raised in 2012 ($21.6bn), 2013 ($25.5bn) and 2016 so far ($19.3bn, Fig. 8). Large and experienced natural resources firms are able to attract vast sums of capital for their global funds, with Brookfield Asset Management s most recent vehicle a major contributor to the 2016 total, securing $14bn for III in July There are currently 47 unlisted funds on the road with a globally diversified focus, collectively targeting $42.9bn in capital, including Global Infrastructure Partners III which is seeking $12.5bn. Fig. 7: Global-Focused Unlisted Natural Resources raising* as a Proportion of All raising Targeting Investments in, YTD (As at 26 July 2016) Fig. 8: Annual Global-Focused Unlisted Natural Resources raising*, YTD (As at 26 July 2016) Proportion of Total % 9 96% 97% 92% 83% 82% 76% 72% 71% 6 98% 87% % YTD Year of Final Close No. of s Closed Aggregate Capital Raised YTD Year of Final Close No. of s Closed Aggregate Capital Raised ($bn) Fig. 9: Five Notable Global-Focused Unlisted Natural Resources s* Closed, YTD (As at 21 July 2016) Firm Headquarters Size (mn) Final Close Date Brookfield Infrastructure III Brookfield Asset Management Canada 14,000 USD Jul-16 Riverstone Global Energy and Power V Riverstone Holdings US 7,713 USD Jun-13 EIG Energy XVI EIG Global Energy Partners US 6,000 USD Dec-13 Blackstone Energy Partners II Blackstone Group US 4,500 USD Jan-15 Energy & Minerals Group III The Energy & Minerals Group US 4,081 USD Jun-14 Fig. 10: Five Notable Global-Focused Unlisted Natural Resources s in Market* (As at 21 July 2016) Firm Headquarters Target Size (mn) Global Infrastructure Partners III Global Infrastructure Partners US 12,500 USD Riverstone Global Energy and Power VI Riverstone Holdings US 7,500 USD Energy & Minerals Group IV The Energy & Minerals Group US 4,000 USD Carlyle Energy Mezzanine Opportunities II Carlyle Group US 2,500 USD Bastion Infrastructure I Bastion Infrastructure Group Canada 2,000 USD *Includes funds that may have exposure to Preqin Ltd. / 5

6 See how investors measure up... Investor Analyst: The True Perspective

7 ...gain a new perspective. Leveraging Preqin s detailed investor data, Investor Analyst allows you to generate custom visual reports comparing an investor s allocations, preferences and investment plans against a tailor-made peer group: alternative assets. intelligent data.

8 Preqin Special Report: Natural Resources in Download the data pack: -Based Managers The largest proportion (47%) of the 32 -based natural resources fund managers profiled on Preqin s Natural Resources Online are based in Southern, although notable proportions are also located in Western (2) and Northern (19%) (Fig. 11). Fig. 11: -Based Natural Resources Managers by Headquarters Location Northern 19% Sixty-nine percent of -based natural resources firms are first-time fund managers, while a further 27% have closed two or three funds previously (Fig. 12). Furthermore, 57% of based managers have raised less than $100mn for unlisted natural resources funds in the last decade, although there are still some large players in the market that have secured $1bn or more in commitments from institutional investors (Fig. 13). Western 2 Central Southern 47% Eastern 9% Fig. 12: -Based Natural Resources Managers by Experience Fig. 13: -Based Managers by Total Capital Raised for Unlisted Natural Resources s in the Last 10 Years 6 57% 27% 4% 69% First-Time Manager 2-3 s Raised Previously 4 s or More Raised Previously Proportion of Managers % 14% Less than $100mn $ mn $ mn $1bn or More Total Capital Raised in Last 10 Years Fig. 14: Five Largest -Based Managers by Aggregate Capital Raised for Unlisted Natural Resources s in the Last 10 Years Firm Headquarters Total Capital Raised in Last 10 Years ($bn)* No. of s Closed in Last 10 Years Pamodzi Investment Johannesburg, South Harith Johannesburg, South Kenana Agriculture Khartoum, Sudan EFG-Hermes Private Equity Cairo, Egypt Phatisa Group Johannesburg, South Preqin Ltd. /

9 Download the data pack: Preqin Special Report: Natural Resources in -Based Investors Preqin s Natural Resources Online contains detailed profiles for over 2,000 institutional investors targeting natural resources, including 40 based in. As with fund managers, institutional investors are mainly headquartered in Southern, which is home to almost half of the region s investors (Fig. 15). Investment companies, banks/investment banks and insurance companies make up half of the based investor pool, although private sector pension funds and sovereign wealth funds also constitute notable proportions (Fig. 16). Fig. 15: -Based Institutional Investors in Natural Resources by Headquarters Location Western 2 Northern 13% Central Eastern 1 Compared with all other institutions worldwide, natural resources investors based in are more likely to invest directly in the asset class, but show less of a propensity for investing through unlisted vehicles (Fig. 17). Thirty-nine percent invest in the asset class directly, compared with a fifth of all other investors, while 61% of institutions based in invest through unlisted funds, compared with 86% of all other investors. Southern 48% Fig. 16: -Based Institutional Investors in Natural Resources by Type Fig. 17: Institutional Investors by Route to Market: - Based Investors vs. All Other Investors 3% 8% 12% 12% Investment Company Bank/Investment Bank Insurance Company Private Sector Pension Sovereign Wealth Public Pension Asset Manager Endowment Plan Government Agency Wealth Manager Proportion of Investors % 86% 39% 2 18% 14% Unlisted s Direct Investment Listed s Route to Market -Based Investors All Other Investors Fig. 18: Sample -Based Institutional Investors Targeting Unlisted Natural Resources in the Next 12 Months Investor Type Headquarters Investment Plans for the Next 12 Months Eskom Pension & Provident n Development Bank Private Sector Pension Bank Johannesburg, South Abidjan, Ivory Coast o Soberano de Angola Sovereign Wealth Luanda, Angola Looking to invest ZAR mn in a new renewable energyfocused unlisted natural resources fund. Planning to invest in -focused unlisted natural resources funds in the next 12 months. Will target unlisted natural resources funds dedicated to making investments in mining, timber and agriculture Preqin Ltd. / 9

10 Preqin Special Report: Natural Resources in Download the data pack: Global Investors Targeting The unlisted natural resources market in is still developing, with significant amounts of capital directed to the continent from more geographically diverse funds based in other areas (see page 3). Preqin s Natural Resources Online contains detailed information on 101 institutional investors globally that have a preference for natural resources investment in, the largest proportion (38%) of which are located in the US (Fig. 19). Investors based in Switzerland (7%), Norway (6%) and the United Arab Emirates (6%) also make up notable proportions of the investor pool. Of the investors with a preference for -focused investment, government agencies represent the greatest proportion (16%), most likely as many are set up with the mandate to invest on the continent (Fig. 20). Foundations and investment companies also constitute notable proportions, representing 13% and 12% of investors respectively. These investors represent a significant pool of capital available to fund managers targeting -focused investment, Fig. 19: Global Natural Resources Investors with a Preference for by Location 31% 3% 6% 6% 7% with their combined assets under management (AUM) reaching $4.4tn. This is due to some very large institutions seeking exposure to -focused natural resources opportunities, with a fifth of the population holding $50bn or more in assets (Fig. 21). However, 38% US Switzerland Norway United Arab Emirates Denmark UK Belgium Other owing to the relatively large share of foundations which are typically smaller investors by AUM 28% of institutions outside with a preference for the region hold less than $1bn in AUM. Fig. 20: Global Natural Resources Investors with a Preference for by Type Government Agency Fig. 21: Global Natural Resources Investors with a Preference for by Assets under Management 3 6% 7% 7% 12% 8% 9% 16% 13% 12% Foundation Investment Company Private Sector Pension Public Pension Asset Manager Family Office Bank/Investment Bank Endowment Plan Wealth Manager Other Proportion of Investors % Less than $1bn 29% 8% 1 2 $1-4.9bn $5-9.9bn $ bn $50bn or More Assets under Management Data Source: Preqin s Natural Resources Online contains detailed information on over 100 institutional investors worldwide with a preference for investing in. Profiles feature information on current and target allocation to the asset class, strategy and geographic preferences, future investment plans, previous natural resources fund commitments and much more. For more information, please visit: Preqin Ltd. /

11 Source new investors for funds Identify potential investment opportunities Conduct competitor and market analysis Track trends in the industry Develop new business Register for demo access to find out how Preqin s Natural Resources Online can help your business: alternative assets. intelligent data.

12 Preqin Special Report: Natural Resources in August 2016 Preqin: Global Data and Intelligence If you want any further information, or would like a demo of our products, please contact us: With global coverage and detailed information on all aspects of the natural resources asset class, Preqin s industry-leading Natural Resources Online service keeps you upto-date on all the latest developments in the natural resources universe. Source new investors for funds Find the most relevant investors, with access to detailed profiles for over 1,800 institutional investors actively investing in natural resources, including information on their current fund searches and mandates, direct contact information and sample investments. Find out which investors are specifically targeting investments in agriculture/farmland, energy (including oil & gas), metals & mining, timberland or water. Identify potential investment opportunities View in-depth profiles for over 1,400 natural resources funds, across all natural resources strategies. Profiles include information on investment strategy, geographic focus, fundraising progress, service providers used and sample investors. Find active fund managers in natural resources Search for firms actively targeting natural resources investments. View information on firm background, key contacts, fundraising, and applied strategies of the firm. Analyze the latest natural resources fundraising activity See which firms are currently on the road raising a natural resources fund and which will be coming to market soon. Analyze fundraising over time by fund type, manager location and regional focus, and conduct competitor analysis. Benchmark performance Identify which fund managers have the best track records with performance benchmarks for natural resources funds and performance details for over 440 individual named funds. Conduct competitor and market analysis Keep track of all activity in the natural resources industry, with access to in-depth market intelligence and a wide range of analytical tools. Stay up-to-date on the activity of competitors and drill down to areas of interest to analyze trends in specific sectors, regions and markets. Find out how Preqin s natural resources products and services can help you: New York: One Grand Central Place 60 E 42nd Street Suite 630, New York NY Tel: Fax: London: 3rd Floor Vintners Place 68 Upper Thames Street London EC4V 3BJ Tel: +44 (0) Fax: +44 (0) Singapore: One Finlayson Green, #11-02 Singapore Tel: Fax: San Francisco: One Embarcadero Center Suite 2850 San Francisco CA Tel: Fax: Hong Kong: Level 9, Central Building 1-3 Pedder Street Central, Hong Kong Tel: Fax: Manila Pascor Drive Sto. Niño Parañaque City Metro Manila 1700 Philippines info@preqin.com Web: Preqin Ltd. /