Asset manager to aid African retail
Standalone entity adds Egyptian supermarket chain Spinneys to stable
In its first venture as a standalone entity led by Hendrik du Toit, Investec Asset Management has decided to back the African retail sector. The asset manager, which is in the process of separating from the Investec banking group, announced on Monday it had added another retailer to its portfolio, Egyptian supermarket chain Spinneys.
In its first venture as a standalone entity led by Hendrik du Toit, Investec Asset Management has decided to back the African retail sector.
The asset manager, which is in the process of separating from the Investec banking group, announced on Monday it had added another retailer to its portfolio, Egyptian supermarket chain Spinneys.
The company acquired a majority stake in Spinneys, a move that will see it cash in on the growing penetration of the formal retailing sector on the continent. However, it did not disclose the full size of its interest or how much it paid.
This is Investec Asset Management’s third acquisition involving an African grocery retailer. The other two included an interest in OK Zimbabwe, which Investec offloaded late in 2018, and Kamoso, a Botswanabased retailer and consumer goods firm in which the asset manager is still invested.
“We like the retail space a lot, particularly in other African markets because in SA it’s very mature. In other countries, there is migration from the informal to formal retail. Penetration of formal retail has been low but it’s picking up now,” said the firm’s managing principal of Africa private equity strategy, Peter Baird.
Baird said given the pace at which Egypt’s capital Cairo was developing, that market presented a springboard for Investec Asset Management to grow its retail portfolio.
Spinneys has 13 retail outlets, but Baird said it has a good pipeline of opportunities and he hopes it will add new stores in the next two years.
Investec Asset Management said Spinneys is one of the leading grocery retail players in Egypt, focusing on fresh produce, in-store bakeries and inhouse label ranges. It also offers home delivery and a loyalty programme, bringing it in line with some of SA’s retailers.
“It’s a high-quality business with good management in place,” said Baird, referring to Spinneys’s current management team, which will continue to steer the retailer’s strategy.
Investec Asset Management said the management had a long track record in Egyptian retail and had already started expanding Spinneys’s footprint beyond Greater Cairo.
Investec Asset Management established an African private equity capability in 2008. The Egyptian acquisition is the eighth investment by its second panAfrican private equity fund, which was established to cash in on the expected doubling of consumer spending by subSaharan Africa’s expanding middle class. Its other investments include minibus taxi financier SA Taxi Finance, debt management company IDM and Africa’s largest mobile tower operator, IHS Africa.
Baird said other sectors Investec Asset Management is looking at include fintech, education and telecommunications.
Baird said the group bought a stake in Richfield Graduate Institute of Technology, previously known as PC Training and Business College.
“We really like the potential in the education space in South Africa and our research actually showed us that PC Training is the third-most recognised private higher education brand in Africa,” said Baird.