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Preference shares in issue: 7 470 336
Auditor: BDO Spencer Steward
Preference share market capitalization: USD 8.1 million
Number of equity investment holdings: 6
Net asset value per preference share: USD 1.086


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%
2019 1.4% 4.7% 6.1%


(USD’000) Novare II Alphamin Addis Pharma African Alpha betPawa Hastings Equity total Cash total Total %
Nigeria 617 - - - 127 - 745 - 745 9%
Zambia 365 - - - 219 - 584 - 584 7%
Mozambique 195 - - - - - 195 - 195 2%
DRC - 1,234 - - - - 1,234 - 1,234 15%
Ethiopia - - 222 1,328 - - 1,550 - 1,550 19%
Kenya - - - - 1,275 - 1,275 - 1,275 15%
Uganda - - - - 637 - 637 - 637 8%
Ghana - - - - 419 - 419 - 419 5%
Tanzania - - - - 36 - 36 - 36 0%
United Kingdom - - - - - 502 502 - 502 6%
Cash - - - - - - - 1,093 1,093 13%
TOTAL 1,178 1,234 222 1,328 2,714 502 7,178 1,093 8,271 100.0%


(USD’000) Novare II Alphamin Addis Pharma African Alpha betPawa Hastings Equity total Cash total Total %
Mining - 1,234 - - - - 1,234 - 1,234 15%
Property 1,178 - - - - - 1,178 - 1,178 14%
Manufacturing & Distribution - - 222 1,328 - - 1,550 - 1,550 19%
Fintech - - - - 2,714 - 2,714 - 2,714 33%
Insurance 502 502 502 6%
Cash - - - - - - - 1,093 1,093 13%
TOTAL 1,178 1,234 222 1,328 2,714 502 7,178 1,093 8,271 100.0%


INVESTMENT Current Value 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 1,178 1,178 14% Jul-16 -243 0.0% 0.8
Alphamin 1,234 1,234 15% Sept-16 -273 0.0% 0.8
Addis Pharma 222 222 3% Oct-16 -41 0.0% 0.8
African Alpha & Blue Bird 1,328 1,328 16% Jul-17 318 27.2% 1.3
betPawa 2,714 2,714 33% May-18 1192 64.4% 1.8
Hastings 502 502 6% Nov-18 -15 -4.7% 0.0
Cash 1,093 1,093 13%
TOTAL 8,271 4,264 4,007 100% 4.1% 1.1
Growth vs Value Split* 52% 48%

The portfolio has shown growth in the past quarter of 4.7% after costs, with a strong performance from betPawa. We invested an additional USD 250k into Blue Bird and USD168k into Alphamin during the quarter under review, with no investment realizations. 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. Seventy one percent of the investment commitment towards the fund had been drawn down by 30 June 2019. We expect that the remainder of the undrawn commitments will be called for within the next year to complete building projects.

Novare’s next independent property valuation round is currently underway. Although pressure on rentals have not abated, we are seeing consumer spending starting to pick up in Nigeria, and the situation in Mozambique is expected to improve in the next year as very significant Mozambique foreign direct investment projects become visible.


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 0.24 CAD on 30 June 2019.

Setup of the mine was completed early in May 2019, in line with operational and budget forecasts. The mine is currently cash flow positive with the grade of ore mined in line with expectation. The concentration plant is still not running at nameplate capacity, but improvements are being made on a weekly basis. Global tin demand has softened in recent months, but remain within the boundaries of the original mine feasibility study. We expect strong share price performance once the mine proves its ability to generate income.


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.

The business continued to trade profitably but growth has stagnated over the last quarter. A shareholder restructuring is still under negotiation which, once completed will enable the business to reach its true growth potential.

A trade sale at an attractive price to a foreign pharmaceutical manufacturer remains 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.

Both the Oil and Soap businesses (wholly owned) continued their very strong growth in revenue and profits on the back of adding additional manufacturing capacity. The Pasta division’s restructuring has been completed. We expect to see continued strong growth from this investment powered by high growth in Oil and Soap, and turnarounds at the Pasta, Water and Diary divisions.


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, Tanzania 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 and profits over the prior year is running at above 200%.

betPawa is currently reflecting an annualised IRR of 64% in APEO’s portfolio, and it is outperforming comparable listed operations. betPawa generated exceptional returns in April to June 2019.

45% of betPawa’s business is generated in Kenya. The Kenyan Gambling Board unexpectedly failed to renew any of the 30 sports betting licences issued in Kenya in July 2019, and the matter is currently subject to various court processes. We expect the matter to be resolved shortly, but given the uncertainty we decided to make a significant provision in betPawa’s valuation at 30 June 2019. Subject to a satisfactory resolution of the Kenyan licensing matter, we expect betPawa to keep growing at a strong rate as its propriety software continues to be an advantage in the sub- Sahara African mobile betting market.


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 the London Stock Exchange. The share was trading at 196 pence on 30 June 2019 after our initial investment was made on 197 pence in November 2018. 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.

Operationally growth has slowed down a bit in a difficult motor insurance market, but Hastings continues to win market share at very good underwriting margins. Brexit is not expected to have a major impact.

12. CASH

After providing for future draw- downs from Novare, APEO has USD 750k in free cash available for future investment.


We expect strong performance from the portfolio over the next 2 years, and we remain on track to better our underwriting criteria of US inflation plus 12.5% per annum. 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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