Empowering Growth: Expanding Access to Private Market to Democratize Capital in Africa
In this special edition of IN THE VALLEY , we explore Africa’s strides in the Private Capital revolution, drawing insights from the recent panel discussion, “How can expanding retail access to private markets democratise capital?" held in Riyadh during FII8 shortly after the inaugural FII New Africa Summit . The session brought together prominent industry leaders who shared strategies for unlocking Africa and Middle East’s investment potential, strengthening regional markets, and fostering broader economic inclusion. The conversation emphasised overcoming existing market constraints and highlighted approaches to elevate our region’s financial ecosystem to a global stage, amplifying both economic and cultural impact across the continent.
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In Conversation with Industry Leaders
Moderated by John Bringardner , Executive Editor at Debtwire , the panel featured a diverse array of experts:
John Bringardner kept the panel discussion focused on key strategies, challenges, and the evolving role of private capital in supporting regional and global economic growth. He engaged each panelist and together, they explored how targeted access, technology integration, and local market development can unlock new opportunities for affluent retail investors, while contributing to a more inclusive capital ecosystem.
Key Insights from the Panel
1. Private Markets as a Long-Term Solution for Financing the New Economy
Ibrahim Sagna highlighted the growing role of private markets in supporting “new economy” sectors such as data centres for Ai, cloud infrastructure, and sustainable energy projects, which are all long maturity endeavors. He noted that these sectors, which traditionally did rely on bank financing, are now increasingly shifting their attention towards private markets. Sagna emphasized that private markets help solve an old problem of asset liability mismatch and offer a suitable home for patient capital. This provides long-term stability and returns for sophisticated investors willing to invest beyond short term liquidity requirements. This approach not only supports high-growth industries, helps local regulators but also ensures that more investors can participate in global technological and infrastructure advancements in a sustainable fashion.? He added that one can often expect as much transparency when you compare the public and private markets side, especially the credit side of the products.?
Furthermore, there is a deep supply issue on the equity side. In fact, the amount of publicly available companies has decreased by more than 40% in the US since 1996, while the capital available has more than tripled during the period.? In fact, this phenomenon is not particular to the US in western markets.? The same 40% drop has been observed in Germany since 2007. There has been even a drop of close to 75% of listed companies on the London Stock Exchange between 1960s and 2022. “The market seems to tell us one single story and draw for us?a vividly clear picture..??
2. Need for Selective Access with Structured Support for Private Markets?
Huda Al Lawati underscored that democratizing private markets doesn’t equate to unlimited access. She pointed to Blackstone’s billion-dollar private equity fund as an example of how targeted access, backed by regulatory support, can responsibly open private markets to high-net-worth individuals. Al Lawati advocated for tech-driven platforms that aggregate smaller investments and maintain transparency, which, combined with careful regulation, can allow private markets to expand safely. This model, she argued, offers a balanced approach to meeting demand while protecting investor interests.
3. Bridging the Gap to High-Level Private Investments for Affluent Retail Investors
Mahmoud Adi discussed the challenge of providing affluent retail investors—those with at least half a million dollars in investable assets—access to the high-level private investments typically reserved for institutions. He emphasized the role of technology in creating tailored investment opportunities that bridge this gap. By offering retail investors access to exclusive high-return opportunities, the market can better serve those who seek growth beyond traditional asset classes, such as standard equity and bonds.
In fact, USD 34 trillion in US retail savings alone is sitting on the side-lines eager for better returns. About 83% of private capital firms want more capital from individuals. BlackRock, State Street, and countless others are expanding access to private markets. This phenomenon is now expanding across the Middle East and Africa, and is expected to reach many parts of the globe.
4. Private Equity is Benefitting from Too Many Tailwinds
1- Private Company Growth: Many fast-growing companies are choosing to remain private for longer periods, reducing the number of public companies available for investment.
2- Diverse Investment Landscape: This shift has expanded the universe of potential private equity investments, offering investors a wider range of opportunities compared to the increasingly concentrated public market.
3- Secondary Market Opportunities: The growing number of private equity-owned companies presents attractive opportunities for secondary deals, where one PE firm acquires a portfolio company from another.
4- Take-Private and Carve-Out Deals: The trend of taking public companies private and separating business units from larger corporations creates additional investment avenues for private equity firms.
5- Liquidity Constraints: The ongoing liquidity challenges faced by private companies make them more susceptible to acquisition, further bolstering the outlook for private equity.
5. Unlocking Untapped Private Capital Opportunities and Enhancing Liquidity in Growth Markets
With trillions of dollars in undeployed capital, private equity firms face the challenge of finding viable growth market opportunities without inflating valuations. Ibrahim Sagna suggested a strategic solution: invest selectively in top-performing assets through leading venture capital managers. This approach allows a firm like his to tap into high-growth potential candidates for private equity plays while mitigating risks. Sagna also highlighted the untapped private capital opportunities in Africa and the Middle East. He reminded the audience about the crucial priority of aligning interests and? the importance of developing IPO markets in the region to create more viable exit strategies for investors. He is known to regularly discourage his founders from the regions to contemplate international exchanges. After all, Middle Eastern and African tech players who decided to list on NASDAQ or US exchanges have faced disastrous times post listing (not only “former” tech unicorns like Jumia, Anghami, Swvl, but also massive telecom towers players like IHS).
6. Building Stronger Local Markets for Sustainable IPOs
Fadi Ghandour , the legendary founder of Aramex, who now turned VC, emphasised the need for robust local markets to support companies before they go public internationally. He cited Swvl’s listing on NASDAQ as an example of companies leaving local markets prematurely due to limited liquidity and regulatory support. By developing stronger regional markets, Ghandour argued, Middle Eastern and African companies can achieve growth locally, benefiting both the economy and investors. Building a sustainable IPO ecosystem will empower more businesses to remain within their home markets.
Ibrahim and Fadi agreed that local unicorns should take the time to grow up nicely and steadily within private markets and, only once they have successfully reached incredible scale, go ahead and do a big IPO in their local exchanges with the help of their regulators.. Local markets will always better understand their story and the environment they evolve in.?
Interestingly enough, large tech players who listed in local exchanges (like Fawry in Egypt) have fared better than those who decided to list in the West...There are other examples who did even better than Fawry, and more such case will continue to emerge.?
To that effect, a regional tech darling, Talabat, has recently announced its upcoming IPO in Dubai valuing the firm beyond the whopping USD 12 Billion range ??
Final Thoughts: Shaping Inclusive Capital Markets for Africa’s Future
The panellists reached a consensus on the need for accessible, transparent, and well-regulated private markets to foster long-term economic growth across Africa and the Middle East. By combining innovative finance solutions with responsible access strategies, the regional private markets can pave the way for a more inclusive and impactful investment ecosystem.
Stay Connected!?
As Africa continues to transform its private capital landscape, IN THE VALLEY remains committed to bringing you the insights driving this evolution. Join us in exploring the stories and developments shaping Africa’s journey toward a dynamic and inclusive financial future. Stay tuned for more stories that inspire and inform.