I&M Group’s corporate finance advisory firm, I&M Burbidge Capital, is expanding in at least five countries in sub-Saharan Africa, targeting to increase income from private equity transactions.
The firm is targeting Ghana, Malawi, Senegal, Code d'Ivoire, and Nigeria aiming to facilitate entry of funding for start-ups across the African region.
It plans to make a presence through partnerships with investment banks in those countries without the need for setting up physical offices.
“We want to expand more in sub-Saharan Africa. Our focus has been East Africa so far but most of our clients who invest in East Africa also invest in those parts of Africa,” said Edward Burbidge, the chief executive of I&M Burbidge Capital.
“We will go into those markets through collaborations we have with global investment banking and businesses. Our plan is also to increase the efficiency of private capital markets. On average it takes a year to raise capital through equity raising even though debt is faster. But it will be nicer to make it quicker and more efficient.”
The firm is seeking to tap into high capital flows from the western African region into Kenya and other East African countries.
Data shows African start-ups attracted a record Sh600 billion ($5.2 billion) in venture capital in 2021, a nearly five-fold increase in investments from a pandemic-induced dip in 2020.
In I&M Burbidge Capital 2021 annual financial review, early-stage venture capital (VC) investments recorded the biggest growth in new deals in East Africa last year, targeting the financial, agribusiness, and ICT sectors which have recently offered high growth potential.
VC deals jumped to 29 last year from 16 in 2020, despite a drop in late-stage private equity, which fell by three to 38, development finance institutions down from 16 to nine, and mergers and acquisitions which dropped from 26 in 2020 to 17 last year.
“There is demand for capital there from external sources which will also increase foreign direct investment into East Africa,” Mr Burbidge said.
Expansion of the business advisory unit is part of I&M Group’s strategy of offering comprehensive financial services to its clients and reducing its reliance on traditional banking services.
The Nairobi Securities Exchange-listed firm is also keen on growing its wealth management business.