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

The initiative aims to enhance their valuation competencies, critical for fostering a robust investment environment. The five-day event, taking place in Koforidua ending July 12, 2024, will equip about 30 participants with fresh knowledge, skills, and tools necessary to implement standardized valuation practices aligned with international standards.

This endeavor underscores the importance of accurate and consistent valuation practices for informed decision-making and portfolio management in the private equity (PE) and venture capital (VC) sectors.

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 attentively.

Yvonne Quansah emphasized that the training was crucial in sharpening their skills to revolutionize the sector. Madam Quansah highlighted that Ghana’s PE/VC sector, while over a decade old, remains in its infancy in terms of demand and supply. However, she noted the market is growing rapidly, predicting increased investments by foreign and local institutional investors in the coming years.

Role of VCTF

Madam Quansah also highlighted the essential role of VCTF in implementing initiatives to improve the business environment, investment attraction capacity, and quality infrastructure support system for companies in Ghana.

Yvonne Quansah noted that VCTF activities had placed Ghana on the PE/VC map in Africa by hosting industry-related events, attracting PE/VC firms into the country. She stressed the necessity for regulators, fund managers, and other stakeholders to understand strategies and techniques in valuation in the PE/VC ecosystem.

Emphasizing the need for collaboration in building a resilient economy, Madam Quansah stated, “Together, we are building a more dynamic, diversified, and resilient economy.” This sentiment was echoed by Mr. Percival Ofori Ampomah, General Manager of VCTF, who highlighted the importance of the training.

Mr. Percival Ofori Ampomah noted that the activities of fund managers and teams in supporting SMEs have far-reaching impacts on Ghana’s economic landscape. Enhancing their valuation capabilities would foster greater confidence among international investors and drive sustainable growth in the PE/VC sector.

Optimism for the Future

Mr. Ampomah expressed optimism about the potential impact of the training on the staff’s ability to discharge their roles more effectively and efficiently. He stated, “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, noted the fundamental shift in the sources of value for businesses over the years.

Dr. Bennet Kpentey emphasized the need for professionals to keep pace with global trends and patterns, particularly regarding intangible assets, which can account for up to 90% of a business’s value but are often overlooked by traditional valuation methods.

Dr. Kpentey also encouraged the integration of environmental, social, and governance (ESG) factors into the valuation process. The workshop aims to provide a practical guide to the tools, techniques, and strategies of venture capital and private equity valuation in Ghana. It will cover key topics, including the importance of business valuation, how valuation calculations are done, and internationally accepted guidelines for valuation.

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 also supports other activities and programs to promote venture capital financing. Through this workshop, professionals are expected to acquire relevant expertise to harmonize valuation methodologies, enhancing transparency, comparability, and confidence in private equity investments.

The capacity-building workshop by the VCTF marks a significant step towards strengthening Ghana’s PE/VC ecosystem. By equipping fund managers and investment teams with advanced valuation skills, the initiative promises to enhance the overall investment landscape, driving economic growth and resilience in Ghana.