Fundo Activo de Capital de Risco Angolano (FACRA) is a public venture capital fund that supports Angolan SMEs in building, innovating and expanding their businesses in Angola. It offers long-term financial investments to enable SMEs and entrepreneurs to realize their business development potential. According to Capital Finance International Capital investments from venture capital companies or external businesses are greatly needed in order to stimulate local industry, to provide space for innovation to flourish and succeed.
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The Fundo Activo de Capital de Risco Angolana (FACRA) is said to be one of the largest equity funds in Africa, with the equivalent in the local currency Kwanzas to $250 million in financial assets under management. FACRA’s objective is to help facilitate the launch and expansion of new businesses, to boost entrepreneurship, support the development of business skills and promote innovation and efficiency in Angolan small and medium enterprises. It also aims to build competencies, innovation and technological capabilities in national private businesses. According to their website the Fund plays an especially important role because of the current macro-economic environment, where access to financing by SMEs is said to be difficult and the relatively small pool of skilled local workforce often impedes business expansion. By being able to provide access to capital when banks are unable to lend, FACRA provides alternative, stable long-term equity funding to local and foreign entrepreneurs looking to enter the Angolan market.
Supervisory board
The supervisory board has three members: two appointed by the sovereign limited partner (LP) and one appointed by the general partner (GP). The chairman is nominated by the LP. Primary role of the supervisory board:
Members
Investment committee
The investment committee has four members, all experts in corporate finance, venture capital, investment banking and/or sciences, industry or technology, appointed in equal proportions by the LP and by the GP. The president of the investment committee is appointed by the GP.
Members:
Director
FACRA has a director that is nominated by the GP to represent the fund to its stakeholders.
Audit committee
The audit Committee is composed of three members, including a certified independent accountant, two appointed by sovereign limited partner (LP) and one appointed by the general partner (GP).
Members:
The advantage of a state-backed venture capital fund is that it has a greater interest at heart – to stimulate innovation and enterprise in the entire country. Whilst it can obviously do this by investing directly in Angolan businesses, it also partners international best-in-class companies with growing local businesses and entrepreneurs. FACRA proactively searches for opportunities to bring new technologies and skills into the country – for the country’s sake. This is great news for companies that are looking for a way to enter the market and even better news for aspiring Angolans. Companies that choose to work with government-backed VCs like FACRA gain an immediate advantage because they are working directly with a government-backed organization, meaning that they receive first-hand guidance on laws and government regulations, and all of the other practical aspects of entering a new market. In this respect, FACRA acts as a one-stop-shop for foreign entrepreneurs and co-investors. FACRA held its first annual FACRA Day symposium on 22 January 2015, an event that saw international investors come to Angola to learn about ways and incentives to do good business in Angola. This initiative enables FACRA to kill two birds with one stone: to identify great businesses opportunities that it can directly support – but also to bring FDI into the frame by providing co-investment opportunities for non-African firms. Holding an event such as this enables promising Angolan companies to showcase their business and meet with potential investors. In addition, it helps the government stimulate growth of the SME sector and provide significant added value for foreign investors. For foreign companies, this guidance is priceless. It provides an immediate in-road to the marketplace and the supply chain, it means working with a VC that actually understands the local market and it means entering the market in the right way. African countries such as Angola have a great need for international expertise in areas as diverse as technology, agriculture, manufacturing, chemical/pharma industry, health services, fish farming, poultry farming and the services sector – as long as they have a high component of innovation. These needs present foreign companies with huge opportunities to break new ground in the Angolan market and to create a positive impact on the Angolan economy.