Private Equity in West Africa market: reform of the legal framework
In the Private Equity industry, the main stakeholders are generally:
1. the fund managers,
2. the fund investors (who will entrust their money to the manager),
3. the promoter (who may be at the origin of the creation of the fund whose management is entrusted to the manager whose job it is to manage it),
4.the target (a company in which the fund invests in equity and / or debt),
5.the custodian of assets (to whom the securities are entrusted)
6. and finally the regulator (roughly the conductor who sets the rules and arbitrates the game).
Our opinion on the planned reform of the legal framework for private equity in West Africa is that the framework that will be put in place shall:
1. give a legal definition of each of the stakeholders;
2. Emphasize the rules on the rights and obligations of stakeholders, especially investors and promoters.
According to the World Bank report to this effect, the proposed regulation is mainly focused on fund managers, which is understandable given that it is the most risky activity and the regulation of which is undoubtedly necessary;
3. Provide good articulation with the usual investment and exit mechanisms.
Patrick ZADY, Legal Consultant, Business Law, Banking and Financial Law