Ghana Private Equity and Venture Capital Ecosystem Study
Posted On: 21 Aug 2019
This paper discusses the landscape for private equity and venture capital financing in Kenya. It provides an overview of the private equity and venture capital market in the country, describing key players, including funds, fund managers, investors, and public sector entities. The paper provides an analysis of key market drivers and impediments, as well as legal/regulatory/taxation drivers and impediments that affect Kenya’s private equity and venture capital industry.
The objective of this study is to assess the private equity/venture capital (PE/VC) ecosystem in Ghana. PE/VC firms are investment managers that mobilize fixed pools of capital to invest in a variety of companies, often across many industries. These firms typically comb the market for high potential investment opportunities through their network of intermediaries, and by developing business linkages and competencies in specific sectors. Apart from providing financing, PE/VC funds tend to take a “capital plus” approach, in that they help the companies in their portfolios to enhance management capacity, improve market focus and presence, strengthen governance, and manage growth. Although PE investment styles may vary considerably, many firms seek financial returns by supporting and financing the growth of the companies in their portfolios. As such, these firms are widely linked to job creation.
Given the high value-added that PE/VC firms can bring to the economy, this study aims to identify barriers to PE/VC investment in Ghana by assessing the private equity and venture capital ecosystem in Ghana. Specifically, it focuses on the market impediments faced by domestic and foreign fund managers and investors in this ecosystem as well as the legal and regulatory framework and tax environment related to PE/VC funds and their managers. While the study does not aim to assess specific initiatives, it discusses the role of public sector initiatives, such as the Venture Capital Trust Fund that aim to facilitate PE/VC investment.