Venture Capital Trust Fund improves capacity of Fund Managers and Teams

The Venture Capital Trust Fund (VCTF) has intensified its efforts to boost venture capital and private equity ecosystem in Ghana through a capacity-building workshop for fund managers and investment teams to enhance their valuation competencies.

The five-day event, taking place in the Eastern Regional capital, Koforidua, from July 8 to 12, 2024 would equip about 30 participants with fresh knowledge, skills, and tools necessary to implement standardised valuation practices aligned with international standards.

In an address on the theme: ‘Business valuation; universal and fundamental applications,’ Madam Yvonne Quansah, Director at the Ministry of Finance and Project Director of the Ghana Economic Transformation Project (GETP) urged participants to listen with rapt attention as the training was crucial in sharpening their skills to recolonize the sector.

She noted that Ghana’s private equity and venture capital (PE/VC) sector was more than a decade old and yet was still in its infancy stage of development,
both in terms of demand and supply.

She however added that the market was growing rapidly, and in the next few years, ‘we should see an increasing level of investment by foreign and local institutional investors.’

Madam Quansah also highlighted the important role of VCTF in implementing subcomponent of enabling investments to improve the business environment, investment attraction capacity, and quality infrastructure support system for companies that want to invest and grow their businesses in Ghana.

She noted, VCTF activities had placed Ghana on the PE/VC map in Africa by hosting industry-related events, which continued to attract PE/VC firms into the country.

Thus, she stressed that it was essential for regulators, fund managers, and other stakeholders to understand strategies and techniques in valuation in the PE/VC ecosystem.

Adding, in the ever-evolving landscape of private equity investments, accurate and consistent valuation practices were crucial for informed decision-making and portfolio managem

She also urged the need for collaboration in building a solid and resilient economy, saying, ‘Together, we are building a more dynamic, diversified, and resilient economy.’

Mr. Percival Ofori Ampomah, General Manager of VCTF, also highlighted the importance of the training, noting that fund managers and teams’ activities in supporting SMEs had far-reaching impacts on Ghana’s economic landscape.

As such, enhancing their valuation capabilities would exhume and foster greater confidence among international investors and drive sustainable growth in PE/VC sector.

He expressed optimism about the potential impact of the training on staff ability to discharge their roles more effectively and efficiently, saying: ‘What we expect is that our valuation skills will improve significantly enough for us to align them with international standards.’

Dr. Bennet Kpentey, a valuation expert and resource person, observed that there has been a fundamental shift in the sources of value for businesses over the years, which
necessitates the need for professionals to keep pace with global trends and patterns.

He noted that intangible assets can account for up to 90% of a business’s value but are often overlooked by traditional valuation methods. He stressed the need for experts to identify the intangible assets of businesses and incorporate them into their valuation portfolios.

He also encouraged the integration of environmental, social, and governance (ESG) factors into the valuation process.

The workshop is expected to provide a practical guide to the tools, techniques, and strategies of venture capital and private equity valuation in Ghana.

Established by the VCTF Act 2004 (Act 680), as a government-backed venture capital fund of funds, VCTF is mandated to invest in venture capital funds for small and medium-scale enterprises. It deploys monies to support other activities and programmes to promote venture capital financing.

The professionals expected to acquire relevant expertise to be able to harmonize valuation methodol
ogies to enhance transparency, comparability, and confidence in private equity investments.

Key topics covered during the session included: what business valuation entails and its universal applications; importance of business valuation and how valuation calculations are done and internationally accepted guidelines to follow during valuation.

Source: Ghana News Agency