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Date of incorporation: March 2016
Preference shares in issue: 7 225 987
Auditor: BDO Mauritius
Preference share market capitalization: USD 7.4 million
Number of equity investment holdings: 7
Net asset value per preference share: USD 1.023


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 -2.0% 1.6% -0.4%
2017 5.9% 4.0% 3.7% -10.9% 1.7%
2018 3.1% -1.2% 2.0% -2.8% 1.0%


(USD’000) Novare II Alphamin Addis Pharma African Alpha NewLook betPawa Hastings Equity total Cash total Total %
Nigeria 857 - - - - 19 - 876 - 876 12%
Zambia 386 - - - - - - 386 - 386 5%
Mozambique 276 - - - - - - 276 - 276 4%
DRC - 1,037 - - - - - 1,037 - 1,037 14%
Ethopia - - 256 947 - - - 1,203 - 1,203 16%
Kenya - - - - - 1,331 - 1,331 - 1,331 18%
Uganda - - - - - 525 - 525 - 525 7%
United Kingdom - - - - 565 - 480 1,045 - 1,045 14%
Cash & net working capital - - - - - - - - 820 820 11%
TOTAL 1,520 1,037 256 947 565 1,875 480 6,680 820 7,500 100.0%


(USD’000) Novare II Alphamin Addis Pharma African Alpha NewLook betPawa Hastings Equity total Cash total Total %
Mining - 1,037 - - - - - 1,037 - 1,037 14%
Property 1,520 - - - - - - 1,520 - 1,520 20%
Manufacturing & Distribution - - 256 947 - - - 1,203 - 1,203 16%
Retail - - - - 565 - - 565 - 565 8%
Fintech - - - - - 1,875 - 1,875 - 1,875 25%
Insurance 480 480 480 6%
Cash & net working capital - - - - - - - - 820 820 11%
TOTAL 1,520 1,037 256 947 565 1,875 480 6,680 820 7,500 100.0%


INVESTMENT Total USD'000 Growth* USD'000 Value* USD'000 % of portfolio Date acquired Profit /(loss) to date USD'000 IRR to date Investment return x
Novare II 1,520 1,520 20% Jul-16 153 5.9% 1.1
Alphamin 1,037 1,037 14% Sept-16 -245 0% 0.8
Addis Pharma 256 256 3% Oct-16 -6 0% 1.0
African Alpha 947 947 13% Jul-17 40 26.1% 1.1
NewLook 565 565 8% Sep-17 -172 0.0% 0.8
betPawa 1,875 1,875 25% May-18 353 36.8% 1.2
Hastings 480 480 6% Nov-18 -38 0.0% -0.1
Cash & net working capital 820 820 11%
TOTAL 7,500 3,079 4,422 100% 85 0.3% 1.0
*Being an analysis of investments bought mainly on prospect of growth("Growth") vs investments acquired at good values which will give a return even with lower growth ("Value")

The portfolio has shown a loss of 2.8% after costs in the last quarter. We have invested an amount of USD 517k in Hastings Group, a UK insurer in the past quarter. A summary of developments in each investment is set out below:


Novare II develops retail and commercial developments in major African cities, comprising of projects in Abuja, Lagos, Lusaka and Maputo. Around seventy percent of the investment commitment towards the fund had been drawn down by 31 December 2018. We expect that the remainder of the undrawn commitments of USD 600k will be called for within the next year to complete building projects. Novare is currently reflecting an annualised IRR of 5.9% in the APEO portfolio.

Novare II continues to be affected by severely constrained consumer spending in Nigeria, Zambia and Mozambique as a result of a devaluation of local currency against the USD since 2016. We only expect the underlying value of the investment to emerge once macro-economic conditions normalize, resulting in improved rental flow on the back of stronger consumer spending. However, the value of the investment is underpinned by the fact that Novare acquired land and built (or is building) quality properties at relatively low cost given quality of project management that has been applied, and the leasing management, mall marketing, and mall maintenance activities continue to be tightly controlled by the Novare in-country teams. Very little new rental property stock has been developed by other developers in the target countries since 2015, putting Novare in a great position to realize good value for its properties once positive market sentiment returns.

Please see below links to some videos of the Novare projects in Nigeria:


Alphamin owns the richest known orebody of tin in the world, situated in North Kivu Province, DRC. The company drilled out and proved only a small portion of its prospecting licensed area, large enough to start a small mine and prove the concept. Alphamin is listed on the Toronto Stock Exchange where it traded in low volumes at 0.25 CAD on 28 December 2018.

Setup of the mine is running within budget and ahead of schedule, with the mine to be commissioned in March 2019. With the national elections having been concluded on 31 December, we expect more certainty regarding political issues and policies to positively affect investor sentiment in 2019. Global tin demand is also expected to be favourable. The Alphamin share is currently trading at less than two times forward earnings, and a major rerating of the Alphamin share is expected to reflect the earnings and cash flow generating capacity of the mine once its productive capacity is proven.

Please see below link to a video showing the progress made at Alphamin:


Addis Pharma manufactures a broad range of pharmaceuticals (at excellent EBITDA margins) for the Ethiopian public and private sector in a country with over 100 million people. Only 20% of Ethiopia’s pharmaceuticals are manufactured in Ethiopia, with the balance being imported. Addis Pharma remains very profitable, but has lacked strong sales growth in the recent past due to a combination of foreign exchange shortages to import raw materials and weak executive execution. The investor consortium that includes APEO has managed to come to an arrangement with the current controlling NGO shareholder of Addis Pharma for control to pass over. As a consequence, we expect growth to be restored in the next year.

The business is also in the process of implementing an export-based strategy with the aim of alleviating some of the foreign exchange shortages in Ethiopia that continue to hamper the ability of businesses to import raw materials needed for product manufacturing.

A trade sale at an attractive price to a foreign pharmaceutical manufacturer is the most likely exit in three to four years once growth has resumed, and the new manufacturing capacity in Adigrat has been commissioned and its capacity utilised.


The company offers Fast Moving Consumable Good (“FMCG”) exposure to the high growth Ethiopian economy (8% plus economic growth p.a.) through an investment in a number of businesses including Bluebird Holdings. We backed a strong private equity team on the ground against FMCG competition which is generally undercapitalised and fragmented, in addition to a lack of committed international FMCG competitors. The strategy is to aggressively grow revenue and profits by extracting economies of scale through combining management resources in procurement, marketing, administration and sales across the various businesses, before selling the business as a unit to an international FMCG business wishing to enter Ethiopia. African Alpha is currently reflecting an annualised IRR of 26%.

The growth in sales and profitability of the Edible Oil and Soap businesses have again been impressive in the past quarter, more than compensating for the relative lack of growth in the Dairy, Water, Pasta and Flour businesses, which have not yet made a significant contribution. The latter businesses are undergoing an intensive operational restructuring and de-bottlenecking of plants. We expect the underperforming business units to start contributing meaningfully in the forthcoming year.


New Look is a leading fast-fashion brand, with 593 retail stores in the UK and over 297 across Europe, China and Asia. It dominates the fashion trade in the female 18 to 35 age group in the UK. New Look is owned 100% by Brait, who took New Look private in 2015 at which time it raised and listed three tranches of Loan Notes totalling GBP 1.1bn on the Frankfurt Stock Exchange.

APEO bought tranches of New Look Loan Notes with bullet capital payments in 2022 and 2023 respectively, at a discount on the assumption that the group will remain solvent, thereby earning a very high return on capital. New Look’s June 2018 results showed green shoots after management changes and a change in strategy had been implemented, but the very difficult consumer trading experienced over December 2018 in the United Kingdom reversed the trend and placed New Look under fresh liquidity pressure, resulting in a major corporate recapitalisation which is presently being implemented.

APEO traded out of the 2023 unsecured New Look notes early in January, preserving some value as these were decimated in the subsequent restructuring. We are currently in the process of disposing of the 2022 secured New Look notes, which have become the de facto owners of New Look. In short, our bet that New Look would not go bankrupt did not pay off, and we decided to rather get out than to hold on for a recovery which may very well come, but is subject to macro-economic factors, changes in consumer behaviour and the shift to online retailing beyond our control.


Established in late 2013, betPawa is a UK registered holding company with licensed African online (smart phone) sports betting subsidiaries. betPawa was established by a Danish entrepreneur who applied or acquired betting licenses in-country over the past five years, and the software was acquired via an acquisition it made in Estonia. Currently it is operational in Kenya, Uganda, Nigeria, Ghana and Zambia. We invested in order to get exposure to a fast-growing consumer business in Africa with a strong technology platform and limited physical footprint, managed by a dynamic management team. The recently launched operations in Nigeria and Ghana continue to show great promise. Overall growth in group revenue over the prior year was 168%, and the group is forecasting growth of 80% for 2019.

betPawa is currently reflecting an annualised IRR of 38% in the APEO portfolio, and it is outperforming comparable listed operations.

Over the past quarter the company has continued expanding its operations into more African countries, with Tanzania being the latest expansion project. Market share has kept on increasing with bet sizes also higher than expected.


Hastings Group is a motor and household insurer established in 1997, with its largest shareholder being the Outsurance group from South Africa. Hastings is a market leader in the UK, and they have various brands under the Hastings Group umbrella. The company has a strong focus on capitalizing on the current trend seen with UK insurance consumers to make use of ‘aggregator’ sites used to compare quotes from different providers. The company has a strong focus on constantly improving and implementing state-of-the-art technology and leverages these systems to not only improve its ability to evaluate risks, customer offering, but also to keep overheads at a minimum.

Hastings is a publicly listed company listed on London Stock Exchange. The share was trading at 187pence on 31 December 2018 after our initial investment was made on 197 pence in November 2018. The share price had fallen from its peak earlier in 2018 of 320 pence in sympathy with most mid cap UK listed shares. We believe our acquisition price is in deep value territory, with the business well placed to increase earnings as the UK insurance market keeps showing a client preference for quote aggregator platforms.

13. CASH

After providing for future draw- downs from Novare, APEO has USD 0.6 million in cash available for future investment.


Although not yet fully reflected in recent quarterly returns, our portfolio remains on track to better our underwriting criteria of US inflation plus 12.5% per annum over the next few years. We continue to search for attractively priced investment opportunities where we have good insight into the potential risks and rewards.


Rudolf Pretorius

Brendon Jones

Brett Childs

Adriaan van Wyk

James Henry


This document is intended to be utilised for information purposes only. Should you choose to use this document for any other purposes other than information, you should do so with the assistance of professional advice. APEO is not acting or purporting to act in any way as an advisor. If you rely on this information for any purpose whatsoever, you do so at your own risk. APEO does not accept any liability of whatever nature and howsoever arising in respect of any claim, damage, loss or expense, whether caused directly or indirectly including consequential loss or loss of profit, arising out of or in connection with you, the user, on the contents of this document, or the user of the information products and services described in this document. This document is for information purposes only and does not constitute or form part of any offer to the public to issue or sell, or any solicitation of any offer to subscribe for or purchase an investment, nor shall it or the fact of its distribution form the basis of or be relied upon in connection with any contract for investment. Investors should take cognisance of the fact that there are risks involved in buying or selling any financial product. Illustrations, forecasts or hypothetical data are not guaranteed and are provided for illustrative purposes only. The value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. Past performance is not necessarily a guide to future performance and no guarantees are provided. The user agrees to submit exclusively to the law of the Republic of Mauritius and the jurisdiction of the courts of the Republic of Mauritius in respect of any disputes arising out of use of this document.

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