These are the views of Paul Boynton, CEO of OMAI, Africa’s largest private alternative investment manager, about the year ahead for African private equity and the major global equity markets.
Paul Boynton says:
African Private Equity
“We have a positive outlook for African Private Equity next year. With a mountain of cash in the system, we expect deal flow to be significantly enhanced in 2018. We are anticipating plenty of activity in transport, power, agriculture, large house building and educational establishments, plus – in Africa’s more developed economies – we expect rising consumer spending to drive retail, tourism and lifestyle businesses.
“There will be stiff competition among GPs chasing the best deals which will squeeze up project valuations. The GPs with the strongest networks on the ground and solid project availability, as well as transparency on their fee structures and performances, will win the lion’s share of the work.
“We expect even stronger momentum among PE investors for reliable comparison data on what were once the “softer” issues such as corporate social responsibility. Environmental concerns are also going to be foremost, particularly energy consumption, but frankly all aspects of ESG have never been more important to fund managers.”
Global Equity Markets
“After a nine-year bull run, it’s likely there will be some loss of upward momentum in the major equity markets. On the whole, we support the views of respected international fund manager Jeremy Grantham who raises the possibility of a market correction but only over the medium term.”
Paul Boynton agrees with Grantham that should company PERs begin to come under pressure in 2018 from either lower company profit margins or rising inflation, or possibly both, a correction at some point later in 2018 is a possibility.