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Preference shares in issue: 7 470 366
Auditor: BDO Spencer Steward
Preference share market capitalization: USD 8.5 million
Number of equity investment holdings: 6
Net asset value per preference share: USD 1.142


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% 5.2% 11.6%


(USD’000) Novare II Alphamin Addis Pharma African Alpha betPawa Hastings Total %
Nigeria 630 - - - 159 - 788 9%
Zambia 373 - - - 272 - 645 7%
Mozambique 199 - - - - - 199 2%
DRC - 1,042 - - - - 1,042 12%
Ethiopia - - 192 1,328 - - 1,520 17%
Kenya - - - - 1,587 - 1,587 18%
Uganda - - - - 793 - 793 9%
Ghana - - - - 521 - 521 6%
Tanzania - - - - 45 - 45 1%
United Kingdom - - - - - 512 512 6%
Net Cash - - - - - - 1,084 12%
TOTAL 1,202 1,042 192 1,328 3,378 512 8,738 100.0%


(USD’000) Novare II Alphamin Addis Pharma African Alpha betPawa Hastings Total %
Mining - 1,042 - - - - 1,042 12%
Property 1,202 - - - - - 1,202 14%
Manufacturing & Distribution - - 192 1,328 - - 1,520 17%
Fintech - - - - 3,378 - 3,378 39%
Insurance 512 512 6%
Net cash - - - - - - 1,084 12%
TOTAL 1,202 1,042 192 1,328 3,378 512 8,738 100.0%


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 Return current quarter
Novare II 1,202 1,202 14% Jul-16 -219 0% 0.8 2.0%
Alphamin 1,042 1,042 12% Sept-16 -465 0% 0.7 -15.5%
Addis Pharma 192 192 2% Oct-16 -71 0% 0.7 -13.6%
African Alpha 1,328 1,328 15% Jul-17 318 22% 1.3 0.0%
betPawa 3,378 3,378 39% May-18 1856 76% 2.2 24.5%
Hastings 512 512 6% Nov-18 -6 -1% 0.0 1.9%
Net cash 1,084 1,084 12%
TOTAL 8,738 4,898 3,840 100% 7% 1.1 6.6%
Growth vs Value Split* 56% 44%
* 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 growth in the past quarter of 6.6% before costs, supported by a strong performance from betPawa. No additional investments or realizations were made 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. Seventy one percent of the investment commitment towards the fund had been drawn down by 30 September 2019. With seven of the eight building projects now operational, we expect the remainder of the undrawn commitments to be called for in due course either to reduce debt or to fund a final project with attractive return projections should one be found.

Novare II’s most recent independent property valuation round reflected a 2% upward adjustment following the write down in December 2018. Pressure on rentals have still not abated, and we expect a slow recovery in Nigeria and Zambia, with the outlook for Mozambique expected to improve in the next year as very significant Mozambique foreign direct investment projects become visible. Novare II has very low gearing, sufficient cash resources and adequate time to manage its assets until there is a step change in demand for them.


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 0.205 CAD on 30 September 2019.

Setup of the mine was completed in Q2 of 2019 largely in line with operational and budgeted forecasts. The mine is operating cash flow positively with the grade of ore mined and concentration plant recovery rates in line with expectation. The mine will be directing the bulk of its cash generated over the next 18 months towards debt servicing and reduction and further exploration, before dividend payments are likely to commence. Global tin demand has been soft in recent months, but remain within the boundaries of the original mine feasibility study.

The current share price (down 15% from the prior quarter) does not in our view reflect the intrinsic value of the mine, and we have a high level of confidence that the controlling shareholder, Denham Capital will be effecting a programme to extract value for shareholders over the next two to three years.


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.

The business continued to trade profitably, but requires a change in control to unlock its growth potential. The Fund committed to invest an additional USD500 000 into Addis Pharma through a fund raise currently under way to enable our consortium to take control of the management of Addis Pharma’s operations, which is key to the strategy to unlock its value. The transaction to take control of Addis Pharma is still subject to suspensive conditions.

The valuation of Addis Pharma was marked down 14% from the prior quarter to the price negotiated by our consortium to buy control of the business. 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. 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 Dairy divisions. The valuation from the prior quarter was left unchanged.


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.

Year on year EBITDA growth is running at 290%, notwithstanding industry wide licensing issues that have occurred in Kenya since July 2019, and have still not been fully resolved. betPawa is currently reflecting an annualised IRR of 76% in APEO’s portfolio, and it is outperforming comparable listed operations.

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 increased 2% over the prior quarter. We believe the current valuation to be 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 and insurance margins have been under pressure 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 and the likely additional investment in Addis Pharma, APEO has USD 250k 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 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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