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Directorate and investment committee members: Rudolf Pretorius
Brendon Jones
Brett Childs
Date of incorporation: March 2016
Preference shares in issue: 4 125 000*
Auditor: Morison Mauritius
Preference share market capitalization: USD 4.1 million
Number of equity investment holdings: 3
Net asset value per preference share: USD 1.00
* APEO received further subscriptions for preference share capital equal to USD 425 000 for the quarter ended 31 December 2016, bringing the total preference share capital raised to date to USD 4 125 000.


The Company’s objective is to generate above average investment returns from the investment opportunities the Directors introduce through their involvement with various investment structures and/or corporate networks, mainly in Africa. The Company evaluates investment decisions with the aim to deliver a total USD portfolio return of at least 12,5% per annum above the annual change in the United States Consumer Price Index over the lifetime of the investment. The Company may invest in any asset class, listed or unlisted, in any investment market and in any currency provided 75% of its effective investment exposure (other than cash) is in PE Assets. Any individual investment (at cost) may not comprise more than 30% of the total portfolio value at the time, or USD 8.0 million whichever is the greater.



2016 n/a n/a -2.01% 1.64% -0.40%



(USD’000) Novare II Alphamin Addis Pharma Equity total Liquid assets Total %
Nigeria 439 - - 439   439 10%
Zambia 55 - - 55   55 1%
Mozambique 148 - - 148   148 4%
DRC - 1,033 - 1,033   1,033 25%
Ethopia - - 249 249   249 6%
Liquid Assets - - - - 2,291 2,291 54%
TOTAL 642 1,033 249 1,924 2,291 4,215 100%



(USD’000) Novare II Alphamin Addis Pharma Equity total Liquid assets Total %
Mining   1,033   1,033   1,033 25%
Property 642     642   642 15%
Manufacturing & Distribution     249 249   249 6%
Liquid assets       - 2,291 2,291 54%
TOTAL 642 1,033 249 1,924 2,291 4,215 100%



APEO made one additional new investment in the quarter ended 31 December 2016 for USD 250 000 into Addis Pharma, bringing the total number of equity investments to three. The current portfolio comprises of:

Novare Africa Property Fund II (“Novare II”)

An investment commitment of USD 2.0 million was made towards Novare II on 30 June 2016 during the fund’s final closing. Novare II is a USD 350m fund that develops retail and commercial developments in major African cities. A third of the investment commitment towards the fund had been drawn down by 31 December 2016. We expect that the remainder of the undrawn commitments will be called for in equal portions over 2017 and 2018 as existing and new building projects come on stream. In the meantime, we are holding the cash requirements for future capital calls in a money market/short dated bond fund which achieved a USD 6% return in 2016.

The process of diversification of the Novare II from a pure Nigerian portfolio into Zambia, Mozambique, and on a newly approved Senegalese development is progressing well with a number of sites under construction in Zambia and Mozambique. Novare II’s first completed shopping mall in Lekki, Lagos was launched in August 2016, the opening of which was attended by two of APEO’s directors. Notwithstanding the current dire economic circumstances in Nigeria, the mall’s anchor tenant, Shoprite reported good trading results during December 2016. Given the short period that the Lekki mall had been open for trading, the fact that shop fitting for smaller tenants took longer than expected, and the high volatility of the Naira against the USD, the first revaluation of the mall will only be performed in the next quarter.

The Novare II investment is valued conservatively in APEO’s accounts at Novare’s cost less management fees drawn by the manager since inception of the fund in 2014, resulting in a loss of 9% for APEO. The J-curve return profile projected by the Novare II manager remains intact and will reflect as building projects come on stream and malls are revalued and/or sold.

Alphamin Resources Corporation (“Alphamin”)

Alphamin, a Toronto listed tin mining company is gearing up to build a 10 000 ton per annum tin mine in 2017 at Bisie, North Kivu Province, in the DRC. The Bisie tin deposit is one of the largest and most significant tin deposits in the world. Alphamin continues to make good progress in raising the debt and equity components of the capital required for the formal mine construction planned to commence during 2017.

Tin was one of the strongest performing metals during 2016, and if the current tin price of around USD 21 000 per tonne is maintained the mine is forecast to repay its capex requirement in two years. The political situation in the DRC remains tense, but the Northern Kivu Province appears to be stable. Alphamin has recently received an official endorsement of North Kivu Government support with the establishment of a North Kivu Government Support Committee for the Development of the Bisie Tin Project.

Alphamin’s share price closed at CAD 0.34, against APEO’s subscription price of CAD 0.30 in the 3rd quarter of 2016.

Addis Pharmaceutical Factory Share Company ("Addis Pharma")

PEO invested USD 250 000 in October 2016 for a small share into Addis Pharma, a leading pharmaceutical manufacturer in Ethiopia when a co-investment opportunity presented itself. Addis Pharma manufactures a large number of products across different therapeutic categories that it supplies to both the Government and private sector in Ethiopia.

We were attracted by the fast growing Ethiopian economy which is growing at 8% pa with a population of nearly 100 million, the profitability and high historical and forecast growth rate of the company, a strong management team, and the fact that the investment is managed by private equity firm that has already had considerable success in Ethiopia.

The investment is currently reflected in APEO’s books at cost.



Our existing investments all remain on track to better our underwriting criteria of US inflation plus 12.5% over the next few years. We are pleased with the portfolio diversification that we have achieved across countries and industries so far. APEO currently has uncommitted capital held in short dated bond/money market funds equal to USD 1million. We are looking at a number of opportunities to deploy this capital in the next six months.


Phone | +230 269 4166
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