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Date of incorporation: March 2016
Preference shares in issue: 7 470 336
Auditor: BDO Mauritius
Preference share market capitalization: USD 7.8 million
Number of equity investment holdings: 6
Net asset value per preference share: USD 1.038


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% 1.4%


(USD’000) Novare II Alphamin Addis Pharma AAfrican Alpha & Blue Bird New Look betPawa Hastings Equity total Cash total Total %
Nigeria 593 - - - - 132 - 725 - 725 9%
Zambia 351 - - - - 113 - 464 - 464 6%
Mozambique 188 - - - - - - 188 - 188 2%
DRC - 1,023 - - - - - 1,023 - 1,023 13%
Ethopia - - 233 1,078 - - - 1,311 - 1,311 17%
Kenya - - - - - 1,118 - 1,118 - 1,118 14%
Uganda - - - - - 527 - 527 - 527 7%
Ghana - - - - - 414 - 414 - 414 5%
Tanzania - - - - - 34 - 34 - 34 0%
United Kingdom - - - - - - 571 571 -308 263 3%
Cash & net working capital - - - - - - - - 1,802 1,802 23%
TOTAL 1,132 1,023 233 1,078 - 2,337 571 6,374 1,494 7,868 100.0%


(USD’000) Novare II Alphamin Addis Pharma African Alpha & Blue Bird New Look betPawa Hastings Equity total Cash total Total %
Mining - 1,023 - - - - - 1,023 - 1,023 13%
Property 1,132 - - - - - - 1,132 - 1,132 14%
Manufacturing & Distribution - - 233 1,078 - - - 1,311 - 1,311 17%
Fintech - - - - - 2,337 - 2,337 - 2,337 30%
Insurance 571 571 -308 263 3%
Cash & net working capital - - - - - - - - 1,802 1,802 23%
TOTAL 1,132 1,023 233 1,078 - 2,337 571 6,374 1,494 7,868 100.0%


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 1,132 1,132 14% Jul-16 -235 0.0% 0.8
Alphamin 1,023 1,023 13% Sept-16 -317 0.0% 0.8
Addis Pharma 233 233 3% Oct-16 -30 0.0% 0.9
African Alpha & Blue Bird 1,078 1,078 14% Jul-17 318 33.9% 1.4
New Look - - 0% Sep-17 -463 0.0% 0.5
betPawa 2,337 2,337 30% May-18 816 60.0% 1.5
Hastings 571 571 7% Nov-18 54 31.4% 0.1
Cash & net working capital 1,494 1,494 19%
TOTAL 7,868 3,648 4,220 100% 143 -0.2% 1.0

The portfolio has shown modest growth in the past quarter of 1.4% after costs, having made a decision to exit its investment in New Look at a loss, and with Novare’s African retail property portfolio being marked down substantially following a thorough valuation review. This was balanced out by continued strong growth in revenue and profits at betPawa and African Alpha. 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 sixty five 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 will be called for within the next year to complete building projects.

APEO’s stake in Novare was valued down (based on the valuations of two independent valuators) due to continued pressure on collecting contracted rent, largely as a result of weak consumer spending following currency devaluations in Nigeria, Mozambique and Zambia in 2016. Although there are signs across the portfolio of a recovery, we only expect the investment to be significantly revalued upwards once rental flows 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 0.24 CAD on 31 March 2019.

Setup of the mine is due to be completed early in May 2019, in line with operational and budget forecasts. We participated in a small funding round at an attractive price to provide working capital to the mine early in April 2019. Global tin demand is still favourable and the tin price looks set to be subject to upward pressure in the short to mid-term. 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 experience slow (but profitable) growth 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 Consumer Goods (“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 and we expect to see strong turnover and profit growth from it in 2019. The Water division, Aquasafe successfully installed its new Sidel packaging line in 2018 and is expected to make an earnings contribution in 2019. Etete, the group’s Dairy business, is still undergoing restructuring which will be completed during 2019.

Seen as a whole, 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.


New Look experienced much worse trading conditions over December 2018 and into 2019 than previously anticipated, resulting in a major corporate restructuring. Given the ongoing uncertainty of New Look’s financial position, and the fact that it now has no single dominant leading shareholder (Brait has been significantly diluted in the restructuring), APEO decided to exit both New Look bond positions in the last quarter.


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 60% in APEO’s portfolio, and it is outperforming comparable listed operations. betPawa generated exceptional returns in January to March 2019 after a disappointing December 2018 trading month, following which we decided to value betPawa down in December 2018. The business is continuing its expansion into more African markets and is now one of the leading sports betting platforms in sub-Saharan Africa. We expect the business to keep growing at a strong rate as its propriety software continues to be an advantage in the African 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 217 pence on 31 March 2018 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.

13. CASH

After providing for future draw-downs from Novare, APEO has USD 1.2 million in free 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 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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