Renaissance Capital Ltd. is pushing into Mozambique to take advantage of what it says is increasing interest from foreign investors in the southern African country.
The Moscow-based investment bank, which trades across 43 emerging and frontier markets, signed a partnership deal last week with Lisbon-based Dominio Capital Group, which has an office in Maputo. The agreement will make it easier for RenCap to work on deals for clients wanting to invest in the country and to help Mozambican public- and private-sector entities raise capital abroad, according to James Friel, the bank’s head of investment banking.
“There’s an opportunity for M&A and capital-raisings – there is a tremendous need for capital”, Friel said in an interview at a conference hosted by RenCap in Lagos (Nigeria), on 11 May. Dominio Capital is “very plugged in to the corporate and political spheres. They do not have research, distribution or capital markets capabilities. So, our skill sets are complementary and will give clients a full offering of services”. While Mozambique’s Eurobond yields have soared since the IMF discovered more than US$1 billion of undisclosed sovereign-linked debt last month, it has long been one of the most buoyant economies in Africa, with growth averaging around 7.5% this century.
“The government recently announced its intention to privatise over 50 companies, partly to address budgetary issues, but also for strategic reasons”, Friel said. “It’s an interesting market for us”.
Family-owned Dominio, which focuses on Portuguese-speaking countries, also has an office in Angola. It has been an adviser on deals worth US$4.2 billion and manages US$150 million of assets, according to its website. It says its clients have included ExxonMobil Corporation, Bob Diamond’s pan-African bank Atlas Mara Ltd. and US private-equity firm Carlyle Group LP.
“The partnership will principally focus on Mozambique”, said Friel. “But we will look opportunistically at Angola”.
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