Which economic model to support SMEs? Focus on Lesson n°8Submitted by Admin on Wed, 06/27/2018 - 11:52
The eight lesson of the document "Fifteen Years, Fifteen Lessons from Africa" analyzes I&P’s choice to focus on small investments led by African entrepreneurs in fragile states. This represents an impact choice, motivated by the fact that there are very few financing solutions available. That being said, this choice has several consequences on the economic model of the fund.
This is indeed a fact private equity professionals know this perfectly well: the smaller the investment, the higher the transaction and monitoring costs, which, in fact, heavily reduces the investor's net profitability.
Why are the support costs of investee companies so great? How has I&P changed its model to meet these constraints? We answer these questions in the lesson n°8.
Read more about "Fifteen Years, Fifteen Lessons from Africa"
Discover the key learnings of the lesson with the following infography: