We spoke with Novan Maharahaje, Director, Corporate Finance Advisory at Ocorian Corporate Services. The conversation covered investment preparation for CEOs, intermediary challenges when raising capital on behalf of their clients, and Ocorian’s experience to date with Orbitt.
Can you provide a bit of context about Ocorian and the services you offer across Africa?
Ocorian is an independent provider of corporate and fiduciary services with a presence across 12 international jurisdictions. The group has over 45 years of experience, 700+ staff worldwide and has more than 2,000 clients with about USD175billion of assets under administration globally. The trust, fiduciary, administration services and advisory services are articulated across its four lines of services which are alternative investments, corporate & institutional, private clients and international growth services.
Ocorian recently acquired the ABAX group in April 2018 which extended its service range across Sub-Saharan Africa and the Middle East. Accordingly, the International Growth line of service was created to assist our clients to set up or expand their operations across Africa, Middle East and Asia.
As part of the International Growth line of service, we provide Corporate Finance Advisory services to accompany our clients on their growth journeys and M&A activities. Our service offering includes fund raising, independent business valuations, business and financial modelling and transactions support and advisory services. Our team, having worked on a number of deals in Africa, can share key insights to shape our client’s next moves.
How can company owners and CEOs better prepare themselves before starting the investment process?
The investment process is a long process that will consume significant resources (in terms of human capital and time). It is important that company owners and CEOs devote adequate and skilled resources to navigate through this process until completion whilst continuing to deliver on their operational performance.
We have witnessed transactions with strong fundamentals that stall due to a lack of preparation
One common mistake that we have seen is that some business leaders focus too much on the fundraising and as a result, operational performance suffers, thereby leading to an erosion of value or even jeopardising the transaction.
Bridging the “governance gap” is another key aspect of a transaction. Having the appropriate structures, in terms of operational and financial oversight /monitoring, reporting and accountability contribute to increase enterprise value and as a result strengthen investors’ interest.
Further, we have witnessed transactions with strong fundamentals that stall due to a lack of preparation. Raising capital on the international landscape is challenging on various fronts. Management need to not only be aware of the international standards at which investors operate but also of the different legal and operational frameworks which differ across countries.
What do you see as the major challenges for intermediaries when raising capital for companies on the continent?
One major challenge is the expectation gap between investors and companies – in terms of information and timing.
Each investor has its own standards and is subject to different investment criteria and constraints. Further, they screen dozens of deals per week – so how do you ensure that your opportunity stands out from the lot?
For intermediaries, obtaining and supplying information which correspond to the investors’ needs and expectations can be challenging. Presentation is key; the ability to present key selling points of a transaction in a succinct and unbiased manner is fundamental to a seamless execution.
Seamless execution also rhymes with a targeted investor reach out strategy rather than a scatter gun approach to ensure that the opportunities presented are in line with their investment mandates, preferences and risk appetite.
How does Orbitt help improve your transaction process and business development efforts?
We have been partnering with Orbitt since its early days. Through their platform, we can connect to both companies and investors alike. Over the years, Orbitt has been actively involved in educating companies about the transaction process, thereby helping to reduce the expectation gap.
What are the challenges that Orbitt helps you address?
- Decrease the information expectation gap;
- Ensure safe environment for information sharing; and
- Complement our pool of investors by providing additional contact.
What do you like about our service?
Prior to sharing information during a process, a non-disclosure agreement (NDA) is executed. This process can be time-consuming. Orbitt’s value-add in this respect is that it removes the operational barrier that comes with the execution of the NDA. Parties exchanging through Orbitt are covered by such an agreement. Accordingly, information sharing in an environment where confidentiality and privacy are upheld is eased and ensured.
Moreover, Orbitt ensures a seamless experience for parties on both sides of the transaction throughout the deal-cycle by ensuring information is shared in a timely manner, by arranging calls, and by following up.
Can you give an example where you’ve seen particular value in being a platform member?
We are currently acting as transaction advisor for an infrastructure project in West Africa. Through our interactions with Orbitt, we have been able to fine-tune our targeted investor list, thereby streamlining the process. Orbitt has also arranged and participated in calls with the targeted investors on their platform.