Zim holds huge potential in private equity, venture capital

Zimbabwe holds immense investment potential in the private equity and venturecapital segments of the economy due to its abundant resources, fast economic growth, and a young, entrepreneurial population.

This came out at the Zimbabwe Private Equity and Venture Capital Conference,held recently under the theme “In Search of Alpha: Uncovering Private Equityand Venture Capital in Zimbabwe,” which provided a platform for market players tonetwork, share insights and explore potential partnerships.

The inaugural event marked the first conference of its kind in Zimbabwe, bringing together key stakeholders to explore the opportunitiesand challenges in the private equity and venture capital space.

It was organised by the Zimbabwe Private Equity and Venture Capital Initiative (ZIMPEVC).

The conference brought together a diverse group of stakeholders, including regulators, asset managers, private equity firms, Governmentagencies, academics, and consultants from various fields.

This diversity of perspectives facilitated engaging conversations and provided valuable networking opportunities. More than 20 companies were represented.

“Discussions highlighted the opportunities present inZimbabwe, with participants agreeing that the country offers significantpotential for returns in the private equity and venture capital space,” Mr JohnVengesa, the chief executive of the ZIMPEVC said.

“Risks were also explored, and the use of innovative structures such as blended finance to manage risk was discussed.

“We also gained valuable insights into the evolving asset allocation strategies by limited partners, such as pension funds, and how theyare incorporating private equity and venture capital into their investment portfolios.”

The event featured two panels, focusing on private equityand venture capital.

Three presentations were also delivered, covering essential topics such as Environmental, Social and Governance, private equity regulation and the global and African private equity outlook.

Old Mutual head of alternative investments Mr Davies Musoso underscored the unique advantages of private equity, explaining that it offers access toopportunities not typically available on the public stock market.

By investing in private companies, he said investors could diversify their portfolios and potentially achieve higher returns.

Mr Lameck Tarupuwa from Lamcent Capital emphasised thelong-term nature of private equity investments.

He stressed the need for patient capital and careful risk management throughout the investment lifecycle.

Mr Tarupuwa also highlighted the significant opportunities that Zimbabwe presents for private equity investors, given the country’sabundant natural resources and growing economy.

Zimbabwe Association of Pension Funds director general Ms Sandra Musevenzo discussed the evolving asset allocation strategies of pension funds.

She noted that pension funds were required to allocate 5 percent of theirassets to unquoted equities, including private equity.

However, she emphasisedthe importance of rigorous due diligence and strong business cases to justify suchinvestments. Mergers and acquisition assistant director from theCompetition and Tariff Commission Mr Tatenda Zengeni shed light on theregulatory framework governing mergers and acquisitions in Zimbabwe.

He highlighted the importance of obtaining approval from theCCTC for deals exceeding US$1,2 million.

Mr Tino Kambasha, the chief executive officer (CEO) of the National Venture Capital Fund of Zimbabwe (NVCCZ) underscored the Government’scommitment to supporting the venture capital ecosystem.

The NVCCZ invests in various stages, from start-ups to early-growth companies, utilising a flexible approach to deal structuring.

With Government funding, the NVCCZ is actively deploying capital and fostering innovation. Mr Kambasha described Zimbabwe’s venture capital as “exciting”and full of potential.

Small to Medium Association of Zimbabwe CEO MrFarai Mutambanengwe highlighted a critical challenge; the lack of financing options for early-stage companies.

Traditional sources like banks and crowdfunding often fallshort in meeting the unique needs of these businesses, he said.

To capitalise on the opportunities, Mr Mutambanengwe pointed out the importance of capacity building within the venture capital space toattract and effectively deploy capital.

Mr Blessing Chipfunde from Escrow Group showcased howtechnology is revolutionising the financing landscape.

Finsec’s GEM portal enables enterprises to apply for fundingand possible listing online. With a significant pipeline of deals valued atapproximately US$12 million, Chipfunde emphasised the ongoing demand forcapital and the potential for further growth.

Mr Vengesa said ZIMPEVC had lined up initiatives and activities.“We are excited to build on the momentum from this inaugural event and host an even bigger and better conference in 2025,” he said.-herald