The Triple Bottom Line
Our commitment to developing sustainable enterprises is based on achieving positive results in three core metrics:
Financial Viability
Sustainable companies must be financially viable and, over time, must generate a profit. This is important because as companies grow and become more profitable, their development effects tend to increase. They hire more staff, for example, increase their engagement with suppliers and distributors, and produce more goods and services.
Governance and Integrity
Sustainable companies are characterized by a high degree of business integrity and good corporate governance. They have clear processes and clear organizational structures, such as a board of directors. Sound governance helps companies to be stronger, more efficient and more accountable, to mitigate risks, and to safeguard against mis-management. Robust anti-corruption measures and practices are needed because corruption is costly and risky. Good governance and integrity help companies to attract the investment and capital they need to facilitate further growth.
Sound Environmental
and Social Performance
The companies in which we invest are required to have sound environmental and social practices. They must also comply with recognized international environmental and social standards, as well as national legislation and regulations. In many countries, rules and regulations protecting employees, the environment and the rights of vulnerable groups are poorly enforced.
Our approach to investment is therefore based upon sound investment practices with the goal of growing our investments, to contribute more significantly to Angola’s sustainable development.
Strategy and Criteria
Our investment strategy allows us to create value for our stakeholders by carefully selecting investments of the appropriate size and which offer growth over the short and medium-term time horizon.
Investment Strategy
Investment Type
Expansion
Management
Buy-Outs & Buy-Ins
Privatization
Industry Target
Diversified
Investment Size
Up to USD 8 million per deal
Additional scope for co-investors when applicable
(priority to LP’s)
Financial Instruments
Equity
Mezzanine
Debt
Shareholder Involvement
Between 10% and 49%, including minority rights
Board of Directors role
Exit
Maturity between 3 and 5 years
Our investment criteria are based on key principles that we believe form the basis for successful companies. These principles assist in mitigating risks associated with private equity investment and are reflected below:
Investment Criteria
| Good Governance | ||||||||
| Clear Competitive Advantage | ||||||||
| Willingness to Work Closely with an Equity Partner | ||||||||
| Strong and Committed Management Teams with Industry-Specific Expertise | ||||||||
| Solid Business with Good Growth Potential to Become National and Regional Players | ||||||||
Value Addition
ACP’s value addition to our investee companies goes beyond the capital of our investment funds and is threefold: providing capital, exercising financial discipline and providing long-term commitment and institutional capacity building. ACP’s team, with its extensive experience, capability and capacity, work closely with management to provide support on key strategic decisions.
These key areas of involvement and experience include:
- Corporate finance;
- Management reporting and financial control;
- Corporate strategy;
- Marketing;
- Human capital management and development;
- Corporate governance, reporting and transparency; and
- Long-term equity partnerships.
Financing instruments offered to companies include equity capital, shareholder loans, convertible loans and other mezzanine instruments. Due to its strong national and international network, ACP is also able to identify other financial institutions to co-finance sound projects.
Investment Procedures
We follow a strict investment process that mitigates risks that are associated with our investment opportunities. Our obligations and commitments with regard to ESG integration in our investment process are set out in our Social and Environmental Management System (SEMS) manual. We evaluate ESG risks of potential investee companies through an assessment of sector and company specific impacts. ESG considerations are also used to gain an understanding of how ESG risks and opportunities could influence the financial and strategic value of an investment.
We consider the specific risks of each sector, such as regulatory/ legal requirements and material issues, and identify areas for value addition. We develop and implement a documented corrective action plan for closing ESG gaps in instances of non-conformity, and implemente structured systems for proactively managing the ESG aspects of operations. We require that all our investe companies and business partner companies comply with all applicable local and national laws and international best practice governing ESG performance. It is also importante to note that there are certain types of investments that we will not finance, as per the IFC Exclusion List. We are committed to investing responsibly and seeking opportunities for sector-specific, ESG-focused value creation. Accordingly, we embrace the concept of materiality. In our view, the principle of materiality – defining the social and environmental aspects that matter most to our business and stakeholders – is a strategic business tool, with implications beyond corporate responsibility or sustainability reporting.
What are our investment procedures?
Screening of new
opportunities
- Business plan analysis
- Copilance analysis with the fund’s investment guidelines
Preliminary due diligence and transaction structuring
- Business plan review
- Business plan valuation
- Promoters and management due diligence
- Negotiation of the general terms and conditions of a potencial investment (term sheet)
Final due
diligence
- Final due diligence to validate assumptions underlying the information provided for analysis
Final negotiation and transaction closing
- Final negotiation of the investment terms
- Legal documentation
- Binding investment agreement
Monitoring
and exit
- Business development monitering
- Board of directors role
- Presence in key decision making processes
- Preparation of the divestment / exit process
* Investment committee approval (I.C.)
What should you include in your business plan?
| Executive Summary |
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| Company |
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| Product and Services |
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| Market Analysis |
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| Marketing Plan |
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| Operational Plan |
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| Financials |
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| Management |
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