Structure is strategy

At Renaissance Asset Managers I established the Renaissance Pan-Africa and Sub-Saharan UCITS funds. They were the first sub-Saharan Africa fund registered for UCITS in Luxembourg.

Putting frontier-market exposure into a UCITS wrapper meant taking rules on liquidity, diversification and governance that were designed for developed markets and making them work for markets that do not always cooperate. It taught me lessons that apply far beyond fund management.

The wrapper decides the market

Structure is strategy. The legal and regulatory wrapper decides who is allowed to invest, and therefore how large an opportunity can become. A great thesis in the wrong structure stays small. The same is true for a startup choosing between a priced round and a SAFE, or a buyout choosing its capital stack: the structure is a strategic decision, not an administrative one.

Regulators are design partners

Regulators and depositaries were partners in the design, not obstacles at the end of it. Bringing them in early made the product better and the timetable shorter. I took the same approach later as a founder in the FCA Regulatory Sandbox.

Liquidity is the risk people underestimate

In frontier markets, liquidity is the most important risk to model and the easiest to underestimate. Prices can look stable precisely because nothing is trading. Any investor, in any market, should ask what the exit route looks like on a bad day, not on an average one.

I still follow African capital markets closely. The continent’s growth companies and banks need capital structures as thoughtful as their business plans, and I am always glad to compare notes with people building them.