When Paul Kavuma began approaching private companies in Africa a decade ago to suggest investing in their businesses and improving the way they were run, he was often shown the door.
“They were offended, asking if I thought they were broke,” says the founder of Catalyst Principal Partners, an east Africa-focused fund manager. Even when, after hours of explaining the merits of private equity, Mr Kavuma changed business owners’ minds, many still struggled with the idea that within a few years he would sell the stake he had bought. “When we exited, some people thought we had lost confidence in them, rather than that we’d finished what we’d come to do,” he says.
Today, much has changed. African entrepreneurs now boast about being approached by one of the many private-equity investors scouring the continent for opportunities. And it is the financiers, or at least those from beyond Africa, who are having to adapt.