conduits of capital onshore financial centres and their relevance to african private equity private...
TRANSCRIPT
![Page 1: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/1.jpg)
Conduits of CapitalOnshore Financial Centres and Their Relevance to African Private Equity
PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015
M a r k N a p i e rD i r e c t o r , F S D A f r i c aM a r k @ f s d a f r i c a . o r g
![Page 2: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/2.jpg)
Agenda• Why undertake this survey?• Who participated?• What are the key findings? • Discussion
![Page 3: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/3.jpg)
Who participated?RESPONDENTS BY FIRM TYPE RESPONDENTS BY LOCATION
39%
21%
15%
14%
4%7% Sub-Saharan Africa
United States of America
United Kingdom
Western Eu-rope excl. United Kingdom
Asia-Pacific
Other
n = 118 n = 118
![Page 4: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/4.jpg)
Finding 1: Use of offshore jurisdictions is standard practice for SSA’s PE industry
Offshore
Onshore
![Page 5: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/5.jpg)
Finding 2: The prevalence of offshore structures is largely due to tax efficiency
![Page 6: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/6.jpg)
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.”
![Page 7: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/7.jpg)
Finding 4: Concerns about Mauritius appear to be stronger amongst DFIs
Pension Funds*
Funds of Funds
DFIs
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
11%
32%
Does Mauritius raise concerns as a fund domicile?% of LP respondents by type
YesNo
![Page 8: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/8.jpg)
Finding 5: The majority of respondents are open to funds domiciled onshore
GP PERSPECTIVES LP PERSPECTIVES
![Page 9: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/9.jpg)
Finding 6: South Africa is viewed as the most attractive onshore domicile
![Page 10: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/10.jpg)
Finding 7: Legal / regulatory conditions inhibit the use of onshore domiciles
Rank Market Top Factors Inhibiting Greater Use of Domicile (% of Votes)
1
South Africa
2
Kenya
3
Botswana
![Page 11: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/11.jpg)
Finding 8: Third-parties should work to enhance legal & regulatory / tax reforms
![Page 12: Conduits of Capital Onshore Financial Centres and Their Relevance to African Private Equity PRIVATE EQUITY IN AFRICA | LONDON | 28 OCTOBER 2015 Mark Napier](https://reader036.vdocument.in/reader036/viewer/2022062409/5697bf9c1a28abf838c937fb/html5/thumbnails/12.jpg)
Discussion