“Successful Investing takes time, discipline and patience.
No matter how great the talent or effort, some things just take time:
You can’t produce a baby in one month by getting nine women pregnant.”

– Warren Buffet

AFC Funds Performance Summary

The AFC Asia Frontier Fund has recorded its 6^th month of positive performance in a row and is now up +11.6% so far this year in USD terms while the MSCI World Index is up just +3.4%. The AFC Vietnam Fund gained +0.1% in August, its 7^th consecutive positive month and is now up +18.4% YTD, outperforming its benchmark, the Ho Chi Minh City Index in USD terms, which is up by +17.5%. On a medium term basis, our funds’ performance is significantly better than that of the relevant indices. In numbers, this outperformance represents +7.7% p.a. for the AFC Asia Frontier Fund and +13.7% p.a. for the AFC Vietnam Fund, both since inception and in USD terms.

In August 2016 we have again experienced increased investor interest, especially for our AFC Vietnam Fund, resulting in significant new subscriptions, bringing the AFC Vietnam Fund’s AUM to USD 29.5 million. Asia Frontier Capital’s AUM now stands at USD 46.7 million.

Sophisticated investors have long invested internationally, but emerging markets have only been added to high net worth and family office portfolios in the last 25 years or so. Since then, the major emerging markets have become a well-established portion of many international investment portfolios. The markets that these portfolios have exposure to includes countries like China, India, Malaysia, South Korea, and Thailand. These countries have progressed through similar stages of development as frontier markets are experiencing right now. Growth in these countries has been strong and valuations have gone up, benefitting shareholders that own well-constructed portfolios of stocks which has resulted in superior risk adjusted returns.

A number of countries in the AFC universe are now in a similar cycle. They are the frontier countries of today and could become the emerging tigers of tomorrow. These frontier markets have enjoyed a low level of interest from the investment community up to now (foreigners own only about 1% of the total stock market capitalization in Bangladesh), but after a prolonged time of GDP growth, expansion of the financial system, and stabilization of the political landscape, such markets graduate and become true emerging markets. This would make these markets instantly attractive and accessible to a broader range of investors, which typically results in a re-rating of these stock markets. For example, Pakistan was chosen to be included in the MSCI Emerging Markets Index in this past June. This upgrade of a frontier market to an emerging market is on the one hand a catalyst for growth for the companies in such countries and on the other hand a driver for a general re-rating of the entire stock market. It can give a significant performance boost to an investment portfolio consisting of quality stocks from such a market. This is a possibility for most of the markets we currently invest in, and we are looking forward to a possible elevation of the Vietnamese market in the next couple of years. Graduation to emerging market status won’t happen overnight, but in the long term, fundamentally good companies in these countries will benefit most. Few international investors – primarily family offices – are currently invested in frontier markets. However, more and more international investors are becoming aware of this relatively new asset class and are starting to consider investing in frontier markets in order to generate superior returns combined with manageable risk and as a result, we have noticed an increasing number of inquiries and allocations from family offices into our funds.

To appreciate the size of the opportunities available, let’s consider the relative magnitude of the markets that we invest in. We have seen that the universe of current emerging markets has increased its market share from just 1% of the global market capitalization some 30 years ago to around 10% currently. We believe that a similar development will take place in the markets that currently are in the frontier space.

Family offices consider diversification when making investment decisions, and investing in a basket of different frontier markets is true diversification. Frontier markets are less correlated with developed markets compared to the correlation between emerging markets and developed markets. Additionally, the correlation within developed markets is only becoming higher as a result of increasing globalization and new information technology (high speed internet).

(Source: AFC)

Furthermore, correlation between individual frontier markets is very low (and in some cases even negative) as they all have their own set of opportunities and challenges. For example, a low oil price is negative for Iraq, while it is beneficial for Bangladesh as it imports all its oil, and therefore a low oil price will benefit companies in the form of lower costs and benefit consumers in the form of higher disposable income. Appropriate diversification across a range of frontier markets enables the construction of a portfolio with low volatility and healthy performance. The AFC Asia Frontier Fund, which has a correlation of only 0.34 with the MSCI World Index since inception, is a case in point, and it also has a very good performance of +10.5% p.a. with an annualised volatility of just 9.5% since inception.

Another consideration sophisticated investors should make is that investing in frontier countries has long term viability. Just look at the development and growth of the middle class in frontier and emerging countries. Looking at the graphic below, we can understand the long term expectations for the quantity of middle class citizens in the world. Notable here is that most of these new middle class citizens are being ‘made’ in Asia: It is expected that the number of middle class citizens would grow by 1.2 billion until 2020 or by 2.7 billion by 2030 which is an increase of 6 times from just 525 million in 2009. This is one of the reasons we focus our attention on investing in Asian frontier markets for the medium and long term, as the opportunities right now are in Asia, and will be for a long time to come.

(Source: www.theatlantic.com, Kharas and Gertz, “The New Global Middle Class”)

Second AFC Vietnam Investor Tour

Just in case you missed this in previous newsletters, AFC will hold its second investor tour to Vietnam from 26^th March – 2^nd April 2017, which will provide valuable insights about investing in frontier markets and in Vietnam in particular while enjoying interesting sights and relaxation during some extra time before and after the main programme of the tour. The tour will take us to several business centres and a few tourist spots. In Hanoi we will stay at the Sofitel and we will have several factory visits in and around Hanoi on the 27^th and 28^th of March 2017 and also go to see the Hanoi Stock Exchange. In Ho Chi Minh City we will have a number of presentations by industry experts, and visit several other companies from various industries from 29^th to 31^st of March 2017. There is also time for recreation and the 26^th of March as well as the 1^st and 2^nd of April are set aside for tourist activities as well as for a few more optional site visits. If you are interested in learning more about this tour, please send an email to Thomas Hugger, email:th@asiafrontiercapital.com so we can send you detailed information and sign up details.

Our contributing editor John Enos just returned from his journey to several Central Asian frontier countries (where we don’t invest currently): Kazakhstan, Kyrgyzstan, Uzbekistan, and Turkmenistan. We close this month’s newsletter with the second of a three-part series of articles in which he recounts his interesting experiences during this exciting trip.

AFC in the Press

Upcoming AFC Travel

If you have an interest in meeting with our team during their travels, please contact Peter de Vries at pdv@asiafrontiercapital.com.

AFC Asia Frontier Fund – Manager Comment August 2016

AFC Asia Frontier Fund (AAFF) USD A-shares gained +2.5% in August 2016, bringing the year to date performance to +11.6%. The fund outperformed the MSCI Frontier Markets Asia Index (+0.1%), the MSCI Frontier Markets Index (-1.3%) and the MSCI World Index (-0.1%).

The USD A shares achieved an NAV of USD 1,553.03 which is a new all-time high (the previous high was in July 2016 with USD 1,514.42). The performance of the AFC Asia Frontier Fund A-shares since inception on 31^st March 2012 now stands at +55.3% versus the MSCI Frontier Markets Asia Index which is up +12.7% and the MSCI Frontier Markets Index (+0.4%) during the same time period. The fund’s annualized performance since inception is +10.5%, which represents an annualized outperformance over the MSCI Frontier Markets Asia Index of 7.7% p.a.

Positive performance for the fund continued during the month and the fund outperformed its benchmark due to positive moves in the fund’s largest holding, a Bangladeshi pharmaceutical company, and a +67% move in one of the fund’s larger Pakistani holdings, a beverage company. As pointed out in previous newsletters, it is the non-benchmark names which have led to out-performance since inception and this was the case during this month as well.

The fund exited one of its largest Vietnamese holdings, a pipe company which supplies its products to residential as well as to commercial infrastructure projects. This position has been one of the fund’s top performers over the past two years and we had bought it initially due to the cyclical recovery in the real estate market as well as due to greater infrastructure spending. The company has a leading market position in Southern Vietnam and has the largest distribution network with a sound management team. Besides benefitting from a pick-up in real estate and infrastructure spending, the company received tailwinds to its margins from lower input prices, i.e. resin.  We exited this position due to the entrance of a new competitor who has an existing distribution network for its existing product line and it also has the capability to increase its production. This was evident in the most recent quarter which saw price cuts even though demand remained strong. With product prices expected to stay at the current level and input prices not providing the benefit (due to higher oil prices) which they did in the past year, earnings growth may not see the same momentum which was seen in the past twelve months.

The fund has consequently invested in a real estate developer which focuses on mid-range housing projects primarily in Ho Chi Minh City and an infrastructure player which manages toll roads in Northern Vietnam and is also developing its own real estate projects in Hanoi. Both companies trade at a discount to most other real estate/infrastructure companies in Vietnam and they both have upcoming projects which will help their earnings to grow over the next few years. Further, the fund has also increased its position in a cement company which has a strong presence in Southern and Central Vietnam and is expected to benefit from continued infrastructure spending.

Though the fund outperformed its benchmark, Mongolia had a tough month and saw its currency depreciate by 6.8%. On 11th August, the Finance Minister disclosed that the country’s fiscal deficit was higher than previously anticipated. This was followed swiftly by credit downgrades on 19^th August by S&P from B to B- and on 26^th August by Moody’s from B2 to B3. Further exacerbating the currency’s rapid decline, in a bid to win votes during June elections the outgoing Democratic Party (DP) promised to re-purchase previously distributed shares of the SOE (State Owned Enterprise), Tavan Tolgoi, which is Mongolia’s largest coal producer. The DP also agreed to repurchase Russia’s 49% stake of the SOE, Erdenet Copper for USD 390 million. Both of these dealings put significant strain on Mongolia’s finances. This culminated in the newly elected Mongolian People’s Party (MPP) providing shock therapy to the economy on 18^th August through an increase in the Central Bank policy rate of 450bps to 15% and deep salary cuts for civil servants, including a 30% cut in the Prime Minister’s salary.

With early signs of a possible bailout from the IMF, the MPP has set expectations low and can now position to outperform by working through its financial challenges while simultaneously continuing to liberalize the economy to attract foreign investment.

The best performing indexes in the AAFF universe in August were Vietnam (VN-Index) (+3.4%), Sri Lanka (+2.1%), and Pakistan (+0.7%). The poorest performing markets were Laos (-7.6%) and Mongolia (-6.3%). The top-performing portfolio stocks were a Pakistani beverage company (+67.4%), followed by a Mongolian junior oil exploration company (+67.1%), a Mongolian leather producer (+30.9%), and a Mongolian retail store (+30.4%).

In August we added to existing positions in Laos, Mongolia, Pakistan, and Vietnam and we reduced our existing holding in a Sri Lankan and a Pakistani company. We newly added a holding company which invests in Myanmar, a Vietnamese property developer, and a Vietnamese infrastructure/real estate company.

As of 31^st August 2016, the portfolio was invested in 95 companies, 1 fund and held 8.3% in cash. The two biggest stock positions were a pharmaceutical company in Bangladesh (7.1%) and a Pakistani pharmaceutical company (5.5%). The countries with the largest asset allocation include Vietnam (29.4%), Pakistan (25.4%) and Bangladesh (15.5%). The sectors with the largest allocation of assets are consumer goods (36.7%) and healthcare (19.5%). The estimated weighted average trailing portfolio P/E ratio (only companies with profit) was 19.22x, the estimated weighted average P/B ratio was 1.37x and the estimated portfolio dividend yield was 2.56%.

For more information about Asia Frontier Capital’s Asia Frontier Fund please click the following links:

AFC Iraq Fund Manager Comment August 2016

AFC Iraq Fund Class D shares returned -3.3% in August 2016 with an NAV of USD 567.89, an outperformance of +1.6% vs. the Rabee RSISX USD Index (RSISUSD) which returned -4.9% in USD terms. The fund has outperformed the RSISUSD by +8.5% year to date and +6.2% since inception.

Coverage of Iraq from the doom & gloom that dominated over the last couple of years has started to shift to one of opportunity and potential. Business publications such as The Wall Street Journal in mid-August reported on the return of foreign companies & capital to Iraq just as the end of the conflict is becoming increasingly likely. While not new news as such, their significance is in moving from specialist coverage into the business media and will likely be a theme that will be featured by more mainstream publications much as it was during the investment boom in 2010-2013. If these developments are borne out fully, they would represent a sea change from 2015 & so far in 2016 as highlighted in last month’s newsletter. Parallel to this shift is a similar change of the conflict’s coverage by mainstream media from focusing on ISIS’s invincibility that characterized prior coverage into focusing on its internal disintegration and eventual military defeat. The continued combination of both shifts will serve to change Iraq’s overstated risk perception and understated opportunity into a more balanced perception. That this thinking is entering mainstream can be seen from S&P’s decision on 27^th August in affirming Iraq’s credit rating with stable outlook believing that its financial and military challenges will be contained.

The liberation of Mosul is progressing ahead of schedule with the continued encirclement of the city by the Iraqi army & Kurdish Peshmerga forces backed by the international coalition. However, political squabbling in Iraq resulted in parliament’s impeachment of the defence minister which could negatively affect this battle. This is mitigated by reports that interim Chief of Army Staff is acting in the capacity as an interim Defence Minister until a new minister is appointed providing continuity. Another mitigating factor is that the fight is coordinated by Iraq’s international sponsors and therefore should continue as planned.

Market turnover shrunk over the month to almost half of the year’s average as can be seen from the turnover chart below (excluding actions by strategic holders whether foreign or local)

Turnover on the Iraq Stock Exchange (ISX)

(Source: Iraq Stock Exchange (ISX), AFC)

A number of factors contributed to the lower turnover: holiday season, trading suspensions as part of the AGM season or due to delays in publishing annual reports which this year have taken longer than usual for companies to release and for auditors & regulators to sanction. Finally, and most importantly, the trading suspension since mid-June of the market’s bell weather, Baghdad Soft Drinks (IBSD), as the regulator is reviewing its proposed merger with a private company holding PepsiCo’s Aquafina license. In a retail driven market with limited liquidity, any capital tied up while stocks are suspended, esp. IBSD, has a dramatic effect on liquidity and on the performance of the remaining shares. This was the case this month with prices mostly drifting lower. Most trading activity was concentrated in banks with some declining such as Bank of Baghdad (-10.3%), Investment Bank of Iraq (-10.2%), Gulf Commercial Bank (-2.5%) while others were up such as Mansour Bank (+6.7%) and Commercial Bank of Iraq (+2.5%). It is worth noting that these moves seem to be consistent with a bottoming process as the chart below shows.

Rebased price performance in USD of selected Iraqi Banks

(Source: Bloomberg)

Improvement in foreign inflows continue from last month, with foreigners as marginal net buyers but, as noted last month, it still is more of a function of an absence/exhaustion of selling as opposed to any significant new inflows. As the only, for the time being, source of new liquidity and crucially the institutional nature of ownership vs. speculative retail their effect can be meaningful on overall turnover as the chart below shows (excluding actions by strategic holders whether foreign or local)

Turnover on the Iraq Stock Exchange (ISX) vs net Foreign trading

(Source: Iraq Stock Exchange (ISX), AFC)

With Iraq’s improving financial position, local liquidity will improve but with a time lag and so the opportunity for long-term investors continues to be to acquire assets and build positions during this time. It can be argued that the market is in the Stealth Phase of the “four phases of a Bubble” as identified by Dr. Jean-Paul Rodrigue at Hofstra University, New York (first discussed here by the AFC Vietnam Fund a couple of months ago) whose work is often referenced in discussing market cycles.

(Source : Dr. Jean-Paul Rodrigue at Hofstra University, New York)

Investors in the Stealth phase are characterized as “Those who understand the new fundamentals realize an emerging opportunity for substantial future appreciation, but at a risk since their assumptions are so far unproven”. The next stages are: Awareness in which “Many investors start to notice the momentum, bringing additional money in and pushing prices higher”; Mania as“Everyone is noticing that prices are going up and the public jumps in for this investment opportunity of a lifetime”, Blow-off when “A moment of epiphany (a trigger) arrives and everyone roughly at the same time realize that the situation has changed”. The blow-off phase ends with the despair part when investors think of the market as “the worst possible investment one can make” and Dr. Rodrigue argues “There is even the possibility that the valuation undershoots the long term mean, implying a significant buying opportunity”. Quotes in Italic are from Dr. Rodrigue’s work.

That the country, post conflict, represented a significant opportunity was the thesis behind the launching of the AFC Iraq Fund a year after the ISIS invasion of Mosul and the market’s bust and since the mainstream avoided it.

Iraq’s market has not witnessed a Bubble in full bloom like other Bubbles as it was deflated by the ISIS invasion and then squashed by falling oil prices as the world obsessed over the slow-down of China and other emerging markets. Its Mini-Bubble went as follows: There was a great deal of excitement about Iraq’s rapidly gowning oil production and the massive reserves it had in 2010-2013, which saw the publication of the International Energy Agency’s (IEA) main work on Iraq in 2012 attract huge interest by oil companies and the investment world. At the time almost every investment bank published a major piece on Iraqi oil and the massive reconstruction cycle to rebuild the country after over 30 years of conflict. This was followed by fund flows into Iraq, and from the lows of mid-2012 to the peak in early 2014 many stocks saw significant gains with Baghdad Soft Drinks (+270%), Mamoura Real Estate & Gulf Commercial Bank (+140%), Kurdistan Bank & Credit Bank of Iraq (+100%), and Bank of Baghdad (+75%) (figures rounded).

After a terrible 2½ years of declines in which the market was down about 65% (see banking chart above for specifics) the current phase feels very much like a stealth phase. Although the country might have tip toed into the awareness phase with the changing media coverage, low local and absent foreign liquidity places the market in the stealth phase. While oil prices will not revisit $100 any time soon, the theme for Iraq is the massive reconstruction cycle following the ISIS conflict powered by rising oil production and global investment in infrastructure to create and foster prosperity to defeat extremism and cement the end of conflict as discussed in prior newsletters.

As of 31^st August 2016, the AFC Iraq Fund was invested in 14 names and held 2.0% in cash. As the fund invests in both local and foreign listed companies that have the majority of their business activities in Iraq, the countries with the largest asset allocation were Iraq (94.1%), Norway (3.9%), and the UK (2.0%). The sectors with the largest allocation of assets were financials (61.9%) and consumer staples (18.8%). The estimated trailing median portfolio P/E ratio was 11.2x, the estimated trailing weighted average P/B ratio was 0.98x, and the estimated portfolio dividend yield was 2.62%.

It would be appropriate to end this section by quoting Sir John Templeton “Bull markets are born in despair, grow amid scepticism, mature in optimism, and die amid euphoria”.

For more information about Asia Frontier Capital’s Iraq Fund, please click the following links:

AFC Vietnam Fund – Manager Comment August 2016

To read this month’s fund update in German please click here.

The AFC Vietnam Fund gained +0.1% in August to a reach new high NAV of USD 1,679.82, bringing the year to date net return to +18.4% and the net return since inception to +68.0%, or +20.8% annualized. By comparison, the August performance of the Ho Chi Minh City VN Index was up +3.2% while the Hanoi VH Index decreased by -1.2% (in USD terms). Since inception, the AFC Vietnam Fund has outperformed the VN and VH Indices by +46.4% and +51.7% respectively (in USD terms).

In the final weeks of August, we saw low volatility and minor index changes. Investors are still waiting for the ETF rebalancing which will take place on 16^th September 2016. Like in July, the market was supported strongly by share price advances in Vinamilk and Vietcombank, which were equivalent to an index gain of 2.8%. With other stocks still in consolidation mood, the indices in Ho Chi Minh City and Hanoi were up +3.2% and down -1.2% respectively for the month of August.

Market developments

The Index hit a 5 year high on 14^th July at 681.75 before starting to correct in the first week of August to a short term bottom of 622.14. Since then we saw a recovery of the market which was influenced heavily by the gains of Vinamilk (VNM). After the announcement to abolish the foreign ownership limit of VNM about three months ago, the stock increased sharply. Together with the second heavyweight Vietcombank, the current weighting is approaching 30% and therefore had a disproportional effect on the performance of the Ho Chi Minh City index (VN-Index) and as a result it did not represent the performance of the broader market and without those two stocks the valuation of the VN Index would have been more than 20% lower.

Impact of VNM on VN Index

(Source: AFC)

This explains why the 1-month and the 3-month performance of the VN-Index is significantly different than the VN-index ex VNM. However, in our point of view, VNM is now trading on par with other companies worldwide in this sector and much less attractive after jumping +14.5% in July and +21.3% in August in anticipation of heavy buying by ETFs on their upcoming September rebalancing. It is now trading at 25.6x trailing earnings and pushing up the average P/E on the VN-Index to 16x as compared to only 10.7x on the Hanoi index (HNX-Index). Meanwhile the average P/E of our fund portfolio is still only around 9x. Of course we stick to our long-term investment philosophy to invest in a broadly diversified portfolio of undervalued stocks, rather than overweight a single heavyweight index stock although we do still hold a smaller position in VNM for quite some time.

(Source: AFC)

Economy

Regarding the macroeconomic story in Vietnam, the country continues to attract strong FDI inflows and shows an improvement in the trade balance. In August, FDI, new and additional registrations, hit USD 14.4 billion, an increase of 7.8% compared to the same period last year. FDI disbursement reached USD 9.8 billion which also helps to improve the country’s foreign reserves. According to a recent article by the Financial Times, Vietnam ranks 1^st in Asia in terms of FDI quality. New and additional FDI registrations continue to focus on industrial production with more than 70% of total capital, which is expected to boost industrial production in the coming years.

The country’s trade balance has improved a lot in the first 8 months, hitting a surplus of USD 2.5 billion compared to a deficit of USD 3.6 billion last year. The better trade balance and strong FDI inflows also result in a very stable Vietnamese Dong. Vietnam is currently one of the very few countries with increasing exports in Asia. In total, the export hit USD 112.2 billion in the first 8 months, growing by 5.5% compared to the same period last year. In August, CPI increased slightly to 1.91% compared to 1.82% in July. In the CPI basket, educational prices increased most by +0.47% against July because of the start of the new school year in August.

Note: Credit growth as of July 2016; Foreign reserves as of June 2016
(Source: AFC research, SSI)

Other developments

While the world is – like every single month of the past two years – still waiting for any hint of a possible interest rate hike in the US from close to zero, we see a further stabilization in emerging market economies. It seems to be already a long time back that investors and analysts were fearing a total collapse of the economies at former investor darlings like Brazil, China or Russia. With better than feared growth numbers in Brazil or Russia and relatively strong growth in countries like Thailand, Indonesia or Philippines, the pace in the economic upwards cycle in South East Asia could also accelerate. On a long term basis one has to remind themselves anyway, where the future growth and investment story is to be found.

At the end of August, the fund’s largest positions were: Sam Cuong Material Electrical and Telecom Corp (2.5%) – a manufacturer of electrical and telecom equipment, Bao Viet Securities JSC (2.4%) – a securities brokerage company, Global Electrical Technology JSC (2.1%) – an electrical equipment manufacturer, PetroVietnam Fertilizer and Chemical JSC (1.7%) – a fertilizer manufacturer, and Vietnam Livestock Corporation JSC (1.6%) – a company involved in financial investment, technology transfer of livestock and poultry husbandry and animal feed production.

The portfolio was invested in 88 names and held 5.7% in cash. The sectors with the largest allocation of assets were consumer goods (35.2%) and industrials (22.8%). The fund’s estimated weighted average trailing P/E ratio was 8.84x, the estimated weighted average P/B ratio was 1.18x and the estimated portfolio dividend yield was 5.04%.

For more information about Asia Frontier Capital’s Vietnam Fund please click the following links:

AFC Travel Report – Uzbekistan

This is the second of a series of three reports by AFC contributing writer John Enos, who recently spent two months traveling by bicycle, train, and bus across Central Asia from Almaty to Ashgabat. To read the first part, click here. Feel free to reach out to him atjohn.a.enos@gmail.com. Photos are all by John Enos.

My two friends and I arrived in Bishkek on our bicycles exhausted, unshaven, and quite tired of the mutton-and-vodka-heavy, vegetable-scarce cuisine we had been eating every day in rural Kyrgyzstan. Two weeks prior, we had arrived in Kazakhstan with an overly ambitious plan of bicycling to Turkmenistan. One bicycle was delayed a week, however, and we soon realized that we would have to take a flight and some trains and buses in order to complete the trip on time. Our Uzbekistan and Turkmenistan visas had fixed dates of entry and departure, and we were too far away to cycle there in time.

Finding information on domestic and regional flights in Central Asia is difficult to do from afar, and although we hadn’t found any reliable sources online confirming that there were flights from Bishkek to Tashkent, we stumbled upon the ticketing kiosk for Air Kyrgyzstan. Although banned in the European Union, they had flights bound for Uzbekistan, and after some haggling and confusion over the price of shipping a bicycle, we departed for Tashkent, the capital of Uzbekistan.

The arrival and immigration procedure at the airport in Tashkent was awful, and one of the most inefficient and bureaucratic arrival procedures I’ve encountered in my travels. The line to clear the security screenings stretched hundreds of people, almost entirely Uzbeks coming from Dubai lugging all sorts of TVs and electronics and yelling to each other about how to avoid paying customs tariffs (just a wild guess!) There were a few tired looking Korean expatriates with golf bags, a couple of old European tour groups, and us Americans pushing our bike boxes.

Uzbekistan’s countless UNESCO World Heritage Sites and incredible relics from the Silk Road give it by far the greatest tourism potential of any of the ‘Stans, but the visa policy is incredibly complicated, expensive, and deters many people from visiting. A British friend living in Kenya told me he had planned a trip to Uzbekistan but eventually gave up when he realized how difficult it would be to get it all sorted from Africa. Luckily, I had been able to get my visa at the Uzbekistan embassy in Bangkok, albeit with a few days of delays.

It was clear once we cleared customs and found a taxi driver how very different Uzbekistan was from Kyrgyzstan. While we had primarily been in high elevation on the vast, green steppe in Kazakhstan and Kyrgyzstan, Uzbekistan felt more like what I imagined the Silk Road would be – hotter, drier, and much more influenced by Islam.

We spent a few days in Tashkent getting our bearings and wandering the city, which we very much enjoyed. Until Almaty launched its metro in 2011, Tashkent was the only city in Central Asia to have a metro. Opened in 1977, it was the 7^th metro built in the former USSR, and each metro station had marvelous architecture, ornate tilework, and unique art centering on a different theme for each station, from cosmonauts to apricots to cotton. It was really spectacular to wander the metro stations and absorb the intricate level of detail of each station, and was also a welcome reprieve from the scorching Uzbek heat. Sadly, photography is strictly forbidden on the metro, as it is deemed a “military installation” and perhaps as a heightened security response to a 1999 terrorist car bomb attack in Tashkent. Entering each station almost felt like going through airport security, with the station police vigilantly opening all bags and not smiling. Someone braver than I managed to take some photos of the stations however.

Dome maintenance in Tashkent

We soon learned in Uzbekistan that getting money was not straightforward, and equal parts frustrating and exciting. The frustrating part was that ATMs were nearly impossible to find throughout the country, and most rejected Western cards or gave you Uzbek Som at the official government exchange rate. The exciting part was that this meant we got to change money on the black market which, while technically illegal, was something all Uzbeks and travelers seemed to do and our hotel offered to do for us in Tashkent. The official exchange rate when we were there was roughly 3,000 Soms = 1 USD, but on the black market, we could get 6,500 Soms. Such a huge spread, in fact, that a February article from Bloomberg called out the Uzbek Som for having the second highest premium between the black market and the official rate after the Angolan Kwanza, highlighting the difficulty of currency pegs for emerging market currencies.

In practical terms, this meant that we had to carry pristine US dollar bills with us for our entire duration in Uzbekistan, and the moneychangers at Uzbek bazaars would spot us from a mile away as a few Westerners who likely were carrying a foreign currency they wanted.

The funniest thing about changing cash on the black market is that you needed to bring shopping bags and rubberbands. The largest denomination of note is 5,000 Uzbek Som, worth USD 0.77 when we were there! It should also be noted that 5,000 Som notes were pretty rare, and in reality we almost always received shopping bag bundles of 1,000 Som notes (worth 15 cents each). Now you can imagine me changing USD 200 on my first day in Tashkent and being amazed when the moneychanger returned with 1,333 bank notes for me…1.3 million Som in 1,000 Som notes! Needless to say, I stopped using a wallet in Uzbekistan and instead walked around with rubberbanded stacks of bills and bulging pockets, feeling like a street level drug dealer from The Wire.

The spectacular 200 Som note, worth a whopping $0.03 at the black market exchange rate

After a few days in Tashkent, we headed by train to Samarkand, the famed Silk Road site bursting with dazzling Islamic architecture and a vital stop on the Silk Road. We chose to travel there by train, and were all impressed by the Afrosiyob, Uzbekistan’s “bullet train” connecting Tashkent and Samarkand which reaches speeds of 250 km/h but was unfortunately sold out on our planned day of departure.

Samarkand is one of those places like Zanzibar, Melaka, or Mandalay to which I had wanted to visit for ages due to the name alone. Once one of the greatest cities in Central Asia, many believe the city was founded in the 7^th or 8^th century BC and was a vital trade point for commerce between China and the Mediterranean on the Silk Road. It was conquered at various times by Alexander the Great, Genghis Khan, and Timur, and ruled by Persian, Turkish, and Mongol peoples, making the city a confluence of different cultures, religions, and people and contributing to the rich history and sights that make it such a stunning place.

The author outside the mighty Registan in Samarkand,
in need of a shave and a steaming pot of plov

Our three days in Samarkand were filled with wandering the dozens of mosques, madrassas, mausoleums, and other Silk Road ruins, the likes of which cannot be described in a few paragraphs. I found the sites at Samarkand as jaw-dropping as Angkor Wat, and completely empty of tourists – the only other people we found were young Uzbek couples flirting under 15^th century Islamic architecture and the occasional elderly German or Japanese tour group. I hope some of my pictures help do it justice.

Another majestic turquoise dome in Samarkand

The Avenue of the Mausoleums, Samarkand

It is hard for me to write about a country without discussing its cuisine, and in Uzbekistan, plov is king. Plov is the Uzbek version of the pilau / pilaf I have had in India and Tanzania, a simple dish of rice, meat, a few vegetables, and a lot of fat. I couldn’t help but laugh at our Lonely Planet guidebook’s entry describing the importance of plov to Uzbeks, both as a staple dish and as an aphrodisiac:

“Plov has been elevated to the status of religion in Uzbekistan. Each province has its own style, which locals loudly and proudly proclaim is the best in Uzbekistan – and by default the world. That plov is an aphrodisiac goes without saying. Uzbeks joke that the word for ‘foreplay’ in Uzbek is ‘plov’. Men put the best cuts of meat in the plov on Thursday; not coincidentally, Thursday’s when most Uzbek babies are conceived. Drinking the oil at the bottom of the kazan (large plov cauldron) is said to add particular spark to a man’s libido.”

Unfortunately, we never found the chance to drink the oil at the bottom of the cauldron, though we did savor many a tasty Uzbek plov.

Plov, glorious plov!

From Samarkand, we continued west by train to Bukhara, another fabled Silk Road trading mecca teeming with impressive mosques and madrassas, and finally to ancient Khiva, before bidding farewell to Uzbekistan.

The author in front of the Chor Minor madrassa in Bukhara

An ancient minaret towering over Khiva

Uzbekistan was one of the most enchanting countries I’ve ever visited, and despite the difficulties of getting a visa, it was well worth it for the amazing two and a half weeks we spent travelling there.

An Uzbek family doing the tourist circuit in Samarkand

In next month’s newsletter, I’ll write the last report from this trip detailing my experiences in Turkmenistan, often dubbed the “North Korea of Central Asia”. Stay tuned!

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By Andrei Skvarsky.

Moorgate Capital, a London-based financial advisory firm, has announced the completion of this year’s second “milestone” transaction it has been involved in, a deal in which one of its serial clients, a leading European producer of packaging, was sold to an investment company.

Clondalkin Flexible Packaging, a manufacturer of a wide range of flexible packaging products with turnover of about $365m operating in Britain, Germany, the Netherlands, Switzerland and the United States, was sold to private equity firm Egeria. Both companies are headquartered in Amsterdam.

In the previous of two 2016 transactions that Moorgate’s head of packaging mergers and acquisitions (M&A), Nick Mockett, has described in a statement as “milestone” deals, British Polyethylene Industries (BPI), a key polyethylene film producer with turnover of about $610m and also a serial Moorgate client, was taken over by RPC Group, a British design and engineering company specialising in polymer conversion.

The deal was finished in August.

Both BPI, which has operations in Britain, Belgium, the Netherlands and North America, and RPC, whose business covers much of the globe, are listed on the London Stock exchange.

Moorgate is a corporate finance and M&A advisory company.

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By Andrei Skvarsky.

ITI Group, an emerging markets brokerage focusing on technology and algorithmic trading, has bought a London-based brokerage from Russian financial corporation Uralsib.

Uralsib Securities changed its name to ITI Capital after its buyout.

The Uralsib broker’s 100 per cent acquisition by the Guernsey-headquartered ITI Group, which has a strong presence in Russia, was co-financed by Da Vinci Capital, a private equity manager investing mainly in Russia and other ex-Soviet republics, ITI Capital said in a statement.

In explaining its sale by Uralsib, the London broker said the Moscow-based financial group had decided to divest its British business to focus on its core businesses in Russia.

John Lewin remains chief executive of the London firm after its takeover by ITI Group.

“The acquisition of a fully licensed U.K. broker is a huge step for ITI Group and its clients,” the statement quoted ITI Group chief executive Pavel Naumenko as saying.

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By Andrei Skvarsky.

Smurfit Kappa, a Dublin-headquartered multinational packaging manufacturer, has boosted its presence in Russia by buying out a Moscow-based packaging producer, according to British financial adviser Moorgate Capital.

“We are seeing increased interest from our packaging clients in acquiring in Russia,” a statement from Moorgate quoted Nicholas Mockett, head of packaging industry mergers and acquisitions at the London-headquartered consultancy, as saying.

“There are two key reasons. First, the growth in packaging in Russia is stronger than elsewhere in Europe. Secondly, for some acquirers, other emerging markets have become lower interest due to their own issues, for example the political situation in Turkey, uncertainty over debt levels in China, the recent corruption scandals in Brazil, and the economic woes in South Africa,” Mockett said.

Though Russia’s gross domestic product dropped to less than $9,000 in per capita terms by 2016 from $15,000 in 2013, “you may well expect it to recover”, Mockett said. He cited a forecast by The Economist that the country’s GDP would grow by 1.5 per cent in 2017.

Mockett pointed out that Moscow has a permanent population of more than 12m, which is bigger than the population of Belgium, Greece, the Czech Republic, Portugal, Sweden, Hungary, Austria, Switzerland, or Bulgaria.

“This means there is a concentration of consumers who are typically demanding more and more packaged goods, including luxury items, which is good news for packaging manufacturers,” he said.

Smurfit, which has operations in 34 countries on three continents and 45,000 employees, already has three plants in St Petersburg. The company, which chiefly manufactures paper-based packaging, recorded sales of 8.6bn euros for 2016.

Soyuz, the Moscow firm it has just acquired, produces corrugated packaging for a range of sectors and employs about 300 people.

“Russia is an attractive growth market for us with exciting potential,” an article on British website PackagingNews quoted Pim Wareman, chief executive of Smurfit Kappa North East Europe, as saying.

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By Andrei Skvarsky.

Russian financial services company ITI Group has bought out Walbrook Capital Markets, a London-based multi-asset brokerage that provides access to a range of electronic trading platforms and telephone services.

ITI Group took 100-per-cent ownership of Walbrook, which is a member of the London Stock Exchange, the Russian company said in a statement.

This spring, ITI Group, which is focused on emerging markets and is controlled by Russian investment manager Da Vinci Capital, acquired Uralsib Securities, a British subsidiary of Russian bank Uralsib. After this acquisition, Uralsib Securities changed its name to ITI Capital.

The ITI Group’s statement quoted ITI Capital chairman John Barker as saying the acquisition of Walbrook “advances ITI Group’s objective in building a financial technology group focused on sell side and buy side platforms, IT services and investments into financial technology businesses.”

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By Andrei Skvarsky.

A fund run by Permira Debt Managers, an arm of private equity firm Permira, was the sole senior secured lender financing the recent buyout of German information service provider Technogroup IT-Service by pan-European private equity firm Vitruvian Partners.

A Permira Debt Managers announcement of the loan did not disclose the sum that had been lent.

Vitruvian Partners, which mainly specialises in growth buyouts and management buyouts, invests between €25m and €250m ($30.6m to $306.5m) in companies typically valued at between €75m and €750m-plus ($91.9m to $919.4m-plus).

Vitruvian’s current fund is worth €2.4bn ($2.9bn). The company has about €5bn ($6bn) under management.

Besides its headquarters in London, the company has offices in Munich, Stockholm, Luxembourg and San Francisco.

Technogroup has more than 4,000 customers in a wide range of industries, mainly in Germany, Austria and Switzerland. It has its headquarters in Hochheim am Main in western Germany’s Main-Taunus district.

Permira Debt Managers, Permira’s debt investment subsidiary, was set up in 2007 and since then has provided 104 businesses in 12 European countries with more than €4bn (about $5bn). As its parent company Permira, the subsidiary is headquartered in London.

It has been investing in a variety of industries, including publishing, theme parks, cinemas, restaurants, furniture retailers and aerospace, according to information on Permira Debt Managers’ website.

Permira Credit Solutions III (PCSS3), the fund that provided Vitruvian with the loan for buying out Technogroup, closed in June 2017 with investable capital of €2.1bn ($2.6bn), Permira Debt Managers said in its announcement.

Six of the 22 investments that have been made since the fund’s closure were technology-related. More than 65 per cent of the fund was used for the 22 investments, Permira Debt Managers said.

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By Andrei Skvarsky.

Blockchain trading platform provider trade.io and financial broker FXPrimus are launching a blockchain-based application for financial traders to check whether data shown on their MetaTrader 4 (MT4) online trading platform has not been tampered with.

Blockchain Trade Verifier (BTV), “a first-of-its-kind semi-decentralised application”, will work intuitively with MT4 with each trade being recorded on a blockchain, according to a statement from FXPrimus, which is an online broker with its headquarters in Limassol, Cyprus.

trade.io, a company based in Zug, Switzerland, has granted FXPrimus exclusive rights to provide traders with BTV, according to the statement.

BTV will be publicly available over the coming weeks, and a few traders have been invited to try out the app on an exclusive basis before then, the statement said.

It said only trade order numbers and other trade details would be visible on BTV while the traders’ personal account data “will be protected at all times”.

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By Andrei Skvarsky.

Russia’s Sovcombank, a universal bank with an extensive nationwide retail network, has enlarged its interest in another Russian lender, Rosevrobank, by buying an 11-per-cent stake in the latter from the European Bank for Reconstruction and Development (EBRD).

According to a statement from Sovcombank, the purchase leaves the bank with a stake of about 45 per cent in Rosevrobank.

As of January 1, 2018, Sovcombank ranked 17th and Rosevrobank 44th by assets among Russia’s more than 500 banks.

Sovcombank has more than 2,000 branches across Russia and has its headquarters in Kostroma, a historic city 300 kilometres (190 miles) from Moscow. It is a 100-per-cent subsidiary of Dutch-domiciled company SovCo Capital Partners B.V., which, in turn, is owned and managed by Russian nationals.

Rosevrobank, which is headquartered in Moscow, is a subsidiary of UK-based REG Holdings Limited.

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By Andrei Skvarsky.

Russia’s Sovcombank and Rosevrobank have agreed to merge in a deal that will bring into being what is expected to be one of Russia’s top three private banks by assets and capital.

The merged lender will have assets of more than 1 trillion roubles (more than $17bn) and capital of more than 100bn roubles ($1.7bn), Sovcombank said in a statement.

The two firms, both of which are universal banks conducting retail, corporate and investment business, will continue to operate independently and “without any significant organisational changes” until the end of 2018, the statement quoted Sovcombank chief executive Dmitry Gusev as saying.

Sovcombank is the 16th and Rosevrobank 43rd largest bank in Russia by assets, according to Russian banking information portal Banki.ru (there are 506 banks in the country altogether).

Sovcombank is going to acquire a stake of a minimum of 35 per cent in Rosevrobank under the merger agreement in addition to its current 45 per cent interest in the lender.

“Rosevrobank’s team is to become the core of our united corporate business,” Gusev said as quoted in the statement.

“After the merger, Rosevrobank’s clients will have access to a wider geography due to the presence of Sovcombank in more than 1,000 cities throughout Russia, whereas clients of Sovcombank’s corporate unit will get a broader product line and high-quality services, which are considered to be a strong point of Rosevrobank,” he said.

Rosevrobank chief executive Ilya Brodsky, who has described the planned merger as “a natural result of a partnership with Sovcombank that began three years ago when Sovcombank became a shareholder of Rosevrobank”, will convert most of his Rosevrobank shares into a stake in the merged lender, the statement said.

Sovcombank has 2.5m customers and more than 2,100 branches across Russia. It has 8,900 employees. The bank is headquartered in Kostroma, a historic city 300 kilometres (190 miles) from Moscow, and has an office in Russia’s capital.

Rosevrobank has more than 400,000 private and more than 20,000 corporate clients. It is headquartered in Moscow and has branches in key Russian cities.

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By Andrei Skvarsky.

Global investment firm Permira has refinanced a loan it provided for French electronic surveillance equipment manufacturer Anaveo a while ago.

The purpose of the refinancing was to support the “long-term growth strategy” of what is reputedly France’s number-one producer of surveillance devices and has subsidiaries in China, Belgium and Poland in addition to its operation in France, British communications company Montfort said in a statement.

Permira, which is headquartered in London and whose full name is Permira Debt Managers (PDM), started backing Anaveo in December 2015 by providing debt financing for its buyout by British private equity firm Bridgepoint Development Capital.

The current refinancing of the Lyon-headquartered company was done by Permira Credit Solutions Funds (PCS Funds), a PDM division.

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By Andrei Skvarsky.

Investment group Permira Debt Managers (PDM) has announced that one of its funds is acting as the sole lender to buyout firm Bridgepoint in the acquisition of Private Sport Shop, one of France’s largest sports equipment online retailers.

The lender is direct lending fund Permira Credit Solutions II (PCS2), according to a statement from PDM, which is headquartered in London. The borrower and buyer of Private Sport Shop, PDM said, is Bridgepoint Development Capital, a business that specialises in buying stakes of between €10m and €75m in mid-market firms that are valued at up to €150m.

PDM, which is a debt investor, has offices in Britain, France, Germany, Sweden, Italy and Spain, and five sector teams specialising in consumer markets, financial services, healthcare, industrials and technology.

Private Sport Shop has about eight million customers.

Bridgepoint, which is also based in London, typically makes equity investments of between €75m and €400 million in companies capitalised at between €200m and €1bn.

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By Andrei Skvarsky.

Tolar, a one-year-old blockchain and cryptocurrency developer group based in ex-Yugoslav states, has signed a deal licencing the Bahraini government to use an advanced technology based on its flagship blockchain project.

Bahrain’s purchase of the technology, which is part of the Tolar HashNET project, aims is to make government in the Gulf country more efficient, according to a statement from Tolar.

The project, based on a platform called HashNET, represents an energy-saving facility that today can perform up to 150,000 transactions per second, but Tolars expect to bring its capacity to 200,000 TPS.

One part of Tolar HashNET is a scheme to create what the Tolar website calls an “open-source, community-governed” cryptocurrency, to be named  Tolar.

The group plans an initial coin offering (ICO) for next month with a hard cap of 1bn Tolar (TOL) tokens, which is expected to raise a total of 45,000 ether (ETH), a sum roughly equivalent to $12.5m. The ICO is due to start on September 15 and end on September 20.

The group has already reached a soft cap of 20,000 ETH ($5.7m) during a current presale that ends on August 31.

Tolar, which is legally run by entities domiciled in Slovenia, Croatia and the British Virgin Islands and has a marketing team in Belgrade, did not disclose how much its contract with Bahrain’s Information and eGovernment Authority was worth.

A Tolar spokeswoman told EmergingMarkets.me in an email that this was confidential information.

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By Andrei Skvarsky.

London-based private debt company Permira Debt Managers (PDM) has acted as the sole senior secured lender to support partnership between two British companies, private equity firm Inflexion and insurance broker Bollington Wilson, which was bought out by Inflexion several months ago.

The loan came from one of PDM’s funds, Permira Credit Solutions III (PCS3), PDM said in a statement.

Bollington Wilson was created by Inflexion’s double buyout and immediate merger of two brokerages based in northwestern England – Bollington Insurance Brokers and Wilsons Insurance Brokers.

Bollington Wilson employs more than 400 staff across six offices. It specialises in niche markets of personal and commercial insurance and has more than 140,000 clients, earning a gross annual underwritten premium of more than 130m pounds (about $167m).

PDM is a debt investor that has put more than 6bn euros (about $7bn) into more than 120 businesses in 12 European countries since it was founded in 2007.

PDM has offices in Guernsey, Luxembourg and Menlo Park, California, besides its London headquarters.

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By Andrei Skvarsky.

Debt investor Permira Debt Managers (PDM) has provided private equity firm Trilantic Europe with a loan for the acquisition of YM&U, a talent management company that was formerly called James Grant Group but was renamed during a rebranding simultaneous with the buyout.

PDM has not disclosed the size of the loan, which was provided by its direct lending fund Permira Credit Solutions III (PCS3). Nor has it said whether the loan covers the entire cost of the buyout, a sum that the Music Business Worldwide news website has put at between $140m and $160m.

“The deal continues PDM’s strategy of partnering with successful, fast-growing businesses globally and supplying the funds to support their continued growth, both organically and inorganically,” PDM said in a statement announcing the loan.

Funds run by PDM, which is headquartered in London and also has offices in Guernsey, Luxembourg and California, have provided more than 6bn euros of capital to over 120 businesses in 12 European countries since the company was set up in 2007.

YM&U, which is based in London, is an adviser to clients in a broad range of sectors, including television, film, music, entertainment and sports.

Its clients include actors Keeley Hawes and Michael Fassbender, TV presenters Holly Willoughby and Graham Norton, electro house musician Steve Aoki, rock band Blink-182 and electronic music band Clean Bandit.

Trilantic, which has offices in London, Guernsey and Luxembourg, focuses on mid-market transactions.

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By Andrei Skvarsky.

Credit Suisse and J.P. Morgan Securities are acting as joint global coordinators for a planned initial public offering of shares (IPO) next month by Eurotorg, the largest grocery retailer in Belarus.

Bank of America Merrill Lynch, UBS and Renaissance Capital are among joint bookrunners for the IPO, to be conducted on the London Stock Exchange.

The other bookrunners are Sova Capital, a London-based broker that was called Otkritie Capital International up until January 2018, and Prague-headquartered advisory and brokerage Wood & Company, Eurotorg said in a statement.

The IPO is expected to raise $250m for Eurotorg, which has an estimated pre-money capitalisation of between $689m and $789m and by mid-2018 reported a year-on-year revenue increase of 9.6 per cent in terms of US dollars and a 12-month revenue of 4.21bn Belarussian roubles ($2.13 bn).

Eurotorg’s core shareholders are going to partially use the IPO proceeds to buy StatusBank, a Eurotorg subsidiary that was called Eurotorginvestbank before May 2017, for about 45.2m Belarussian roubles ($21.4m).

Most of the money to be raised by the IPO and the sale of StatusBank would be used by Eurotorg for deleveraging and reducing its foreign currency debt.

The offering will consist of global depositary receipts (GDRs). Eurotorg has announced a GDR price range of $6.95 to $7.95. Sales are due to start on the day the final pricing is announced, which would be around November 7.

About 970,000 people make purchases at Eurotorg stores every day. The company, moreover, has a loyalty programme bringing together about 2.5m people. Belarus’s total population is 9.5m.

Eurotorg controls about 19 per cent of Belarus’s food retail market. In addition to its nearly 700 stores, the chain has two online grocery retail services, which together yielded a revenue of 94.4m Belarussian roubles ($47.5m) for the first half of 2018.

Belarus’s grocery retail market was worth about 22bn Belarussian roubles (about $11.4bn) in 2017.

Penetration of modern retail formats in it stands at 46 per cent, considerably below that in most other emerging markets and roughly similar to levels that existed in Russia in 2007 or Poland in 2006.

However, format modernisation is expected to grow at a compound annual pace of 15 per cent by 2022.

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By Andrei Skvarsky.

Billions of dollars’ worth of deals were clinched during Africa Investment Forum, an event in Johannesburg on November 7-9 that brought together more than 1,000 people from 53 countries, including 23 non-African states, African Development Bank (AfDB) said.

Of 61 proposed transactions valued at $40.4bn, 45 deals worth a total of more than $32bn secured investment interest by midday on November 9, AfDB said in a statement.

It said the final data would be released within the next few days.

South Africa, Nigeria, Ghana, Angola, Egypt, Tunisia, Morocco, Mauritius and Mozambique were among the African countries represented at the event.

The non-African countries included Britain, the United States, China, Japan, France, Germany, Switzerland, Canada, India, Saudi Arabia, and Argentina.

The attendees mainly represented governments, development financial institutions, commercial banks, and institutional investors such as sovereign wealth funds and pension funds.

The forum had been organised by AfDB in partnership with institutions including Africa Finance Corporation, the Africa50 infrastructure investment platform, and the European Investment Bank, which is a European Union non-profit institution.

The next Africa Investment Forum is scheduled for November 2019.

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By Andrei Skvarsky.

The Arab Bank for Economic Development in Africa (BADEA), an institution owned by 18 Arab countries, has acquired a stake in the multinational Eastern and Southern African Trade and Development Bank (TDB).

According to a statement from African Development Bank (AfDB), the acquisition was one of the transactions carried out during the Africa Investment Forum, and event in Johannesburg on November 7-9 that brought together 53 countries, 23 of them non-African, and resulted in deals worth billions of dollars.

BADEA, which is owned by 18 of the Arab League’s 22 member nations and is headquartered in Khartoum, Sudan, has the mission of bringing more Arab capital into African economies.

TDB, formerly known as PTA and headquartered in Bujumbura, Burundi, is owned by 22 African countries, China, Belarus, and about a dozen institutional investors.

It owns assets of more than $5bn.

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By Andrei Skvarsky.

London-based debt investor Permira Debt Managers (PDM) is currently making a debt refinancing loan to DL Software, a French software publisher for small and medium-sized businesses.

The money is coming from one of PDM’s funds, Permira Credit Solutions III (PCS3), which is acting as the sole lender under the refinancing project, PDM said in a statement without disclosing the sum.

PDM focuses on investing in medium-sized European firms.

PCS3 has by now invested in more than 30 businesses. Its DL Software loan “continues the focus on tech-enabled pan-European business opportunities”, the statement said.

PDM investment director Roy Awad described Paris-based DL Software as “a quality business with strong sustainable growth plans, both organically and acquisitively”.

The refinancing project follows transactions in which DL Software sold its medical arm DL Sante and acquired French software company Devlyx.

DL Software, which is owned by French investment firm 21 Centrale Partners, is a vertical software editor providing services for more than 10,000 clients in four markets – retail, healthcare, wholesale and tourism.

The software company has a record of more than 15 acquisitions completed over the last 15 years.

PDM has offices in Guernsey, Luxembourg and the United States besides its London headquarters.

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By Andrei Skvarsky.

Debt investor Permira Debt Managers (PDM) has continued its strategic line of investing in technology-focused companies by making a loan recently to global sports media technology firm Deltatre to help it to refinance a debt and support its buyout of a software company.

PDM, a London-headquartered company focused on investing in medium-sized European businesses, has acted as senior lender under a loan project to support Deltatre, according to a statement from the London-headquartered debt investor.

The money came to Deltatre, which is part of the Bruin Sports Capital investment company and has FIFA, Premier League, UEFA and BBC among its numerous clients, from one of PDM’s funds, Permira Credit Solutions III (PCS3), PDM said in a statement.

Besides refinancing Deltatre’s debt, the loan aimed to support the company’s acquisition of Massive Interactive, a London-headquartered developer of over the top (OTT) software to enable media companies to deliver targeted content and ensure personalised user experiences.

PCS3 has by now invested in more than 30 businesses.

PDM as a whole has provided more than 6.5bn euros to more than 120 firms in a variety of industries in 12 European countries since its inception in 2007.

PDM has offices in Guernsey, Luxembourg and California besides its head office in London.

Deltatre has more than 650 employees worldwide and, in addition to its headquarters in Turin, has offices in London, New York, Los Angeles, Utah, Paris, Munich, Hamburg, Geneva, Tokyo, Mumbai, and Singapore.

Massive Interactive’s customers include international companies such as AT&T, Perform Group and BBC Worldwide. Massive has offices in Prague, New York and Sydney in addition to its headquarters in London.

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By Andrei Skvarsky.

London-based debt investor Permira Debt Managers (PDM) is acting as sole senior secured lender to Validant, an international healthcare consultancy focused on regulation and compliance.

The loan, provided via PDM’s fund Permira Credit Solutions III (PCS3), supports the acquisition of Validant, which has its headquarters in San Francisco, by Global Healthcare Opportunities, or GHO Capital, a London-headquatered healthcare investor, according to a PDM statement.

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