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Date of incorporation: March 2016
Preference shares in issue: 6 988 570
Auditor: Morison Mauritius
Preference share market capitalization: USD 7.4 million
Number of equity investment holdings: 6
Net asset value per preference share: USD 1.053


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% 3.9%


(USD’000) Novare II Alphamin Addis Pharma African Alpha NewLook betPawa Equity total Cash total Total %
Nigeria 807 - - - - 20 827 - 827 11%
Zambia 363 - - - - - 363 - 363 5%
Mozambique 260 - - - - - 260 - 260 3%
DRC - 1,094 - - - - 1,094 - 1,094 15%
Ethopia - - 256 800 - - 1,057 - 1,057 14%
Kenya - - - - - 1,427 1,427 - 1,427 19%
Uganda - - - - - 563 563 - 563 8%
United Kingdom - - - - 769 - 769 - 769 10%
Cash & net working capital - - - - - - - 1,125 1,125 15%
TOTAL 1,430 1,094 256 800 769 2,010 6,360 1,125 7,485 100.0%


(USD’000) Novare II Alphamin Addis Pharma African Alpha NewLook betPawa Equity total Cash total Total %
Mining - 1,094 - - - - 1,094 - 1,094 15%
Property 1,430 - - - - - 1,430 - 1,430 19%
Manufacturing & Distribution - - 256 800 - - 1,057 - 1,057 14%
Retail - - - - 769 - 769 - 769 10%
Fintech - - - - - 2,010 2,010 - 2,010 27%
Cash & net working capital - - - - - - - 1,125 1,125 15%
TOTAL 1,430 1,094 256 800 769 2,010 6,360 1,125 7,485 100.0%


INVESTMENT Total USD'000 Growth* USD'000 Value* USD'000 % of portfolio Date acquired Profit /(loss) to date USD'000 Change in value from prior Q'ly % Change in Q'ly value due to revalutation % Change in Q'ly value due to addition / disposal IRR to date Investment return x
Novare II 1,430 1,430 19% Jul-16 161 -2% -2% 0% 7.2% 1.1
Alphamin 1,094 1,094 15% Sept-16 -245 -16% -16% 0% 0% 0.8
Addis Pharma 256 256 3% Oct-16 -6 -26% -26% 0% 0% 1.0
African Alpha 800 800 11% Jul-17 40 0% 0% 0% 7.9% 1.1
NewLook 769 769 10% Sep-17 -172 177% -5% 182% 0.0% 0.8
betPawa 2,010 2,010 27% May-18 488 33% 33% 0% 95.5 % 1.3
Cash & net working capital 1,125 1,125 15%
TOTAL 7,485 3,067 4,418 100% 267 4.0% 1.0
Growth vs Value Split* 41% 59%
*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 modest growth of 2.0% after costs in challenging conditions in the last quarter. We have invested an additional USD 500k into New Look in the past quarter. Having provided an in-depth review of the portfolio in the previous quarterly report, a short 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 30 September 2018. We expect that the remainder of the undrawn commitments of USD 700k will be called for within the next year to complete building projects. Novare is currently reflecting an annualised IRR of 7.2% in the APEO portfolio

During the last quarter the currencies which affect Novare’s operating malls being the Nigerian Naira, Zambian Kwacha and Mozambican Metical have remained under pressure. Local currency strength is needed to see consumer spending capacity recovering to levels where smaller tenants can fully afford the original USD rentals negotiated at inception of the operating malls.

Novare II acquired land and built (or is building) properties at relatively low cost given the quality of project management that has been applied. 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. We only expect the investment to be significantly revalued upwards once rentals start to improve.


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 30 September 2018.

Setup of the mine is running within budget and currently slightly ahead of schedule. We expect the share price to reflect the mine’s inherent value once uncertainty over the DRC national elections in December 2018 has been removed, and construction of the mine has been completed and becomes operational, currently scheduled for Q2 2019.


Addis Pharma manufactures a broad range of pharmaceuticals at good 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. Although the Ethiopian government has a stated policy of preferring local manufacturers over importers, public sector sales were withheld by the company due to pricing disputes with the government. Private sector sales have increased, but not sufficiently to place the business on a growth path. Although Addis Pharma is highly profitable, its value was marked down in the past quarter due to the lack of turnover growth as the prior higher valuation was based on the assumption of growth

The new factory expansion in Adigrat is expected to be completed early in 2019, creating significant additional manufacturing capacity. The focus of the management remains firmly on making sure it has foreign currency to import essential raw materials, and growing its private market sales, including cross border expansion to neighbouring countries.

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 7.9%.

The Edible Oil and Soap businesses have enjoyed revenue growth of 147% and 49% respectively over the last year. The growth in profitability of the Edible Oil and Soap businesses have been impressive, increasing by 300% and 116%, respectively over the same period. The Dairy, Water, Pasta and Flour businesses have not yet made a significant contribution, either because of intensive operational restructuring and de-bottlenecking of plants, or through delaying operational changes whilst minority buy-out negotiations have been under way. 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 1.3bn 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. New Look’s June 2018 results have shown green shoots after management changes and a change in strategy had been implemented, but some risk remains as absolute debt levels are high. APEO plans to hold the notes to maturity which will earn us an annualised IRR of above 25%, of which a portion is earned in cash through six monthly interest payments.


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 are showing great promise. Overall growth in group revenue over the prior year is running at 150%.

betPawa is currently reflecting an annualised IRR of 95.5% in APEO portfolio, and it is outperforming comparable listed operations.

12. CASH

After providing for future drawdowns from Novare, APEO has USD 0.5 million in cash available for future investment.


Although not yet fully reflected in recent quarterly returns, our investments remain 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 not is 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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