Actis in review

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The positive power of capital

Contents Where we are now The Actis investment approach Actis at a glance Actis timeline Portfolio at work: Vlisco Group Portfolio at work: XP Investimentos Portfolio at work: One Airport Square Portfolio at work: Sterling Add Life Portfolio at work: Xiabu Xiabu Portfolio at work: Umeme Actis data Regions and sectors Investments Investors Portfolio companies Team

3 8 11 12 16 18 20 22 24 26 30 30 32 33 34 38

Welcome
We launched this report a year ago as a means to measure our progress as a company. The feedback was very positive. I hope you enjoy this new edition for 2011. Our investors are regularly updated about the performance of our portfolio using a number of different channels; this document gives us the chance to look beyond the figures, to the heart of our business, our approach and our people. I continue to feel immense optimism about the markets in which Actis invests while also realising we are by no means alone in recognising this opportunity. Here we pause for a moment to examine what makes us different and to note those aspects that distinguish Actis. This report reflects what we see.

Paul Fletcher Senior Partner, Actis

2 In Review

Where we are now

Just because everything is different doesnt mean anything has changed Irene Peter
With two thirds of global growth expected to come from countries outside the G20 by 2030, seeking opportunities outside of the developed world assumes a new urgency. Post-financial crisis, renewed and ever strengthening enthusiasm for the emerging markets comes as no surprise to Actis. The perspective has shifted; we have moved from the margins to the centre of a world view which positions fast growing economies at the heart of any strategic investment thesis. But for us, this is life as usual. We have always been exclusively and unapologetically consumed with the emerging markets, from our offices in So Paulo, Nairobi, Mumbai, Singapore, Cairo, Lagos, Johannesburg, London and Beijing; we are one firm in many places investing everywhere from the DRC to Thailand, from Tanzania to Honduras. office development or bank resembles another. There are helpful similarities. And yet all this activity has played out against a backdrop of political transformation and social flux. In North and West Africa we see revolution bringing disruption and uncertainty. Macro risk related to food prices, water availability and scarcity of oil remains. Growth is rarely consistent or constantly paced. The future is far from clear. What reassurance can an investor find in these volatile, fast moving markets? First, that Actis has the experience that is essential to mitigate risk. We have always been of these markets, and will continue to be so. Our long tradition of immersing ourselves in the cultures and societies in which we operate allows us habitually to bring order to chaos, reaching the point where sustained pattern recognition lets us read subtleties and developments intrinsic to any situation. Simply put, this makes us more competitive, better able to manage risk and highly commercial in our execution. It also lets us become trusted business partners to the CEOs and entrepreneurs with whom we work. Relationship driven opportunities will always be rich in those countries where personal connections and trust are placed at a premium. There is little doubt that the determinedly local aspect of our approach is a tried and tested part of our success.

There is little doubt that the determinedly local aspect of our approach is a tried and tested part of our success.
Certainly consumer expectations of everyday prosperity are changing, fast. In Brazil alone, 25 million citizens have left absolute poverty since 2003. New cars, that easy anecdotal indicator of individual prosperity, tell us that Chinas annual auto sales are set to quadruple to over eight million per year by the end of the decade with the number of new cars hitting the roads each week in Beijing already an astonishing 13,000. Trade routes between our markets have strengthened in the last 12 months, conveying billions of dollars each year in commodities, products and services. We are uniquely placed to respond to this trend building connections between our investee companies internationally so they can more readily learn from one another. Our investment managers are skilled at replicating knowledge one fast-food company or

In Brazil alone, 25 million citizens have left absolute poverty since 2003.
Second, we recognise that the world has become more sophisticated and we have been able to adapt. Increasingly, specialisation is acknowledged as essential to maximise financial outcomes. We must become ever
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more surgeon like in our focus, for the days of the generalist investor are numbered. The breadth of our investments across business services, financial services, industrials, energy, consumer and real estate lets us solve challenges specific to each industry. With the expansion of our internal team dedicated to operational improvements we can be confident that we are encouraging best practice across the portfolio. Whether by the introduction of brand building techniques which enhance the attractiveness of the business to future vendors (think Reckitts appetite for the acquisition of our Indian investee company Paras in December 2010), or by the systematic build out of an enhanced management team (as with South African financial services provider, Alexander Forbes), we make interventions that matter. Creating proper alignment in the business around shared goals with world class professional support has been a significant part of our progress as a firm over the last year. Working in cross border teams has become an essential part of the investment process, pooling experience and insight gained from many data points. We find this approach brings our sector knowledge to life, for example in our investment in GVK Energy which saw the Energy team pulling resources from around the globe to execute an investment in one of Indias leading power developers in the closing months of last year. This sectoral approach also gives us the mettle to build what wasnt there before: think of our pan-African payment processing platform, EMPH. The development of this buy and build strategy relies on the expertise of a combined London/Africa team: EMPH made its first acquisition in July 2010 with an investment in Mediterranean Smart Cards Company, one of the largest card payment processing companies in Sub-Saharan Africa.

We are motivated by a belief that profit is not enough. We see helping the private sector deliver on its responsibility to the public good as core to who we are, what we do and how we do it. We call this ethos the positive power of capital. The transition of millions of rural survivors to urban consumers represents one of the greatest revolutions humanity has ever known. With more people lifted out of poverty in the last decade than the sum total of history to date, the opportunity to fundamentally change the nature of inequality across our markets is compelling. We recognise that within the emerging markets a new age of dreams is evolving. And these dreams are innumerable. The Ghanaian mother buying her bolt of luxury branded Dutch Wax fabric in Accra to take to her tailor to be dressed in splendour for her daughters wedding. The Kenyan couple paying for their first car on their Visa card instead of a wad of shilling notes. The young professional in Rio, enjoying her first taste of financial freedom as she takes a class in personal investing before putting her first hundred dollars to work on the stock exchange. These vivid dreams are real to us because they are manifested across the Actis portfolio. We must serve the changing needs of our emerging markets consumers and broader society whether by providing higher value goods and services to meet the aspirations of the 250 million people in BRIC countries poised to cross the US$30,000 income threshold in the next decade, or by doing something as fundamental as keeping the lights on across Sub-Saharan Africa and Central America. Actis serves these new consumers whether through the provision of tertiary education at scale (with the build out of the largest private university chain in China) or our commitment to the healthcare sector (with particular success to date in India with our investment in Sterling Add Life). The continuing economic development of these emerging markets finds expression throughout our portfolio. The nature of our funds has evolved from an early emphasis on commodities, mineral extraction, natural resources, agribusiness, tea and paper, to branded goods, personal care and most recently to knowledge driven companies.

A new age of dreams is evolving. And these dreams are innumerable.

4 In Review

We make money work hard for everyone who touches it, ensuring that when it returns to its investor it has enriched the lives of those who helped it grow.
Our money counts. The returns on that money count for the pensioners, endowment funds and individuals to whom it belongs. The money itself counts to the entrepreneurs it funds and encourages. And for the hundred thousand plus employees who depend on that money for their monthly take home it matters even more. We are proud to be part of this interdependent community of human beings and buying decisions. We make money work hard for everyone who touches it, ensuring that when it returns to its investor it has enriched the lives of those who helped it grow. We think what we do sitting at this intersection of capital and society, shaping the way in which these economies develop and contributing to the success of their most promising businesses, is a privilege. We face the unknowns of the year to come with confidence and curiosity.

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The Actis investment approach

Actis pursues an emerging markets investment thesis which rests on two pillars: 1. Rising personal wealth and domestic consumption driven by the rapid expansion of the consumer class 2. Investment in domestic infrastructure. We apply this thesis to six sectors: Business Services, Consumer, Financial Services, Industrials, Energy and Real Estate, and five regions: Africa, South Asia, South East Asia, China and Latin America. Local teams are aligned by sector while a global Investment Committee has approval and oversight of all investments. In their day-to-day business our investment professionals rely on a single, global services platform encompassing Operations, Legal, Finance, IT, Funds Administration, Human Resources, Communications and Knowledge Management. We generate our financial returns by patiently growing businesses. A group within Actis dedicates its attention solely to working with portfolio companies, fostering best in class business practices and long term growth. Our investment approach is underpinned by the observance of rigorous Environmental, Social and Governance (ESG) guidelines. Some are preventative or precautionary, designed to minimise harm. Others are intended to maximise the long term value of an investment. Throughout the life-cycle of an investment the ESG guidelines manifest themselves in several ways. Marketing and origination When making investment decisions we ask ourselves: Does this business do or cause harm? Is the business in a sector acceptable to us? (We do not invest in nuclear or military equipment, gambling, tobacco, hard liquor or pornography.) Is the proposed investment fully acceptable in terms of specific ethical issues e.g. Actiss position in relation to countries with a record of poor human rights? Does the business currently meet our standards in terms of business integrity, climate change, health and safety, social and environmental issues? What are the long term non-financial drivers of value? Can we take the business forward in these areas? Screening and due diligence If we discover as part of our due diligence that aspects of the business do not yet meet our guidelines, we: Highlight those areas where we have concerns these may relate to standards of integrity and honesty; or accordance with local laws and international best practice. Talk openly with the companys management to discover their ability and willingness to change. If we are confident that, with our help, all areas of noncompliance can be addressed we will move forward. Investment management Once we are actively managing an investment we work with the investee company to maximise the upside environmentally and socially, while also reducing risk. Our approach is tailored to each portfolio company but there are a couple of common steps: Step 1 Identify the key non-financial drivers of market value relevant to the portfolio company. Step 2 Trace the pathway linking the selected nonfinancial parameters to market value. Once these have been identified, set up a small team including company and Actis representatives. If we need to bring in specific technical expertise we will hire local consultants and manage them. Step 3 We measure and track progress on a quarterly or annual basis and regularly assess whether we are adding value from an ESG perspective. The idea is to track progress up until exit so that we can capture value at that point. We also benchmark performance against best in class for the company. Exit When we exit we carry out routine business integrity checks in relation to potential buyers and may, for high ESG risk investments, proactively assess their ability and appetite for maintaining the guidelines we have put in place.

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Actis at a glance
US$4.6bn 101,234
Total funds under management.

Number of employees working in Actis portfolio companies around the world.

65

Number of portfolio companies.

254

Actis staff employed in ten offices around the globe.

US$26m

Amount of money Actis staff have invested over the last six years, helping align their interests with those of investors.

118

Number of Limited Partners invested in Actis funds.

Figures as of 31 March 2011.

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Actis timeline

2004
Actis spins out of CDC May South Africa wins the bid to host the 2010 FIFA World Cup. August Actis co-leads the investment in Unza as part of a US$100m MBO which was, and remains, the largest MBO completed in Malaysia. September Actis takes 80% stake in first Rwandan financial institution privatisation, Banque Commerciale du Rwanda. November China signs a landmark trade agreement with ten South East Asian countries; the accord could eventually unite 25% of the worlds population in a freetrade zone.

2005
May Actis exits Celtel, one of the first telecommunications operators in Sub-Saharan Africa, in a trade sale at more than four times its initial investment. August Actis closes at US$325m for its India Fund 2. October A 4,000-year-old bowl of noodles unearthed in China is the earliest example ever found of one of the worlds most popular foods. December Actis helps Suntech launch the first ever IPO of a privately owned Chinese company on the NYSE.

2006
February Indias biggest-ever rural jobs scheme is launched, aimed at lifting around 60 million families out of poverty. March Actis closes at US$250m for its China Fund 2. April Actis closes at US$100m for its Umbrella Fund and US$115m for its South Asia Fund 2. June Actis closes at US$211m for its CIFA Fund. July China-Tibet railway line, the worlds highest train route, begins operating. The Pope calls for ethical dimension to capitalism. July Actis closes at US$355m for its Africa 2 Fund and US$154m for its Actis Africa Real Estate Fund. August Chile and China sign a freetrade deal, Beijings first in South America. September Actis closes at US$130m for its ASEAN Fund, for investment in South East Asia. December Actis portfolio company, Regal Forest, a Central American consumer retailer, acquires the Caribbean operations of UKretailer Courts plc, in the largest buy-out in the regions history.

2007
June Actis invests US$134m in one of Nigerias leading banks Diamond Bank. July Actis backs one of the largest management buy-outs in South Africa Alexander Forbes. July Actis exits Punjab Tractors Ltd the first successful private equity backed privatisation and one of the first control deals in India. July 10th anniversary of Hong Kongs return to China. November Joaquim Alberto Chrissano wins the Mo Ibrahim Foundation award, which recognises and celebrates excellence in African leadership and stimulates debate on good governance across SubSaharan Africa and the world. November Actis completes the sale of Globeleqs power assets across Latin America, Asia and North Africa. Actis retains Sub-Saharan power assets and relaunches Globeleq as a global power development company.

12 In Review

2008
July Actis consolidates its pioneering role in African real estate with the official launch of Accra Mall, the first and only A-grade shopping mall and leisure centre in Ghana. July While the world suffers from the subprime fallout in the US, investors experience a leap in the share price of Industrial & Commercial Bank of China (ICBC) making it the worlds biggest bank by market capitalisation. August Actis leads the US$700m consortium buy-out of Alstom SA (now named Actom), an electrical engineering business in South Africa. August Beijing hosts the Olympics. November Actis closes its pan-emerging markets private equity fund, Actis Emerging Markets 3, at US$2.9bn. November Actis invests in leading hot pot chain, Xiabu Xiabu, completing a hat-trick of transactions in the Chinese consumer sector. December African exports rose from US$319bn in 2007 to US$413.7bn in 2008, a 29.7% rise.

2009
April Actis signs UNPRI agreement. June World Bank raises 2009 China growth forecast to 7.2%. BRIC leaders hold first summit to discuss the global financial crisis. July Actis invests US$244m in Commercial International Bank, a leading Egyptian bank. August South African President Jacob Zuma announces 2.4bn rand (US$300m) relief scheme for workers facing redundancy in South Africa. September Actis raises US$751m for its fund, Actis Infrastructure 2. October Brazil wins bid to host 2016 Olympics. October DFCU wins the Global Banking Alliance for Women 2009 Innovation Award. November Actis portfolio company 7 Days Inn announces its listing on the New York Stock Exchange.

2010
January Globeleq completes the acquisition of Energias Renovables de Mesoamerica SA, the owner, operator and leading developer of wind projects in Central America. January China posts a 17.7% rise in exports in December, suggesting it has overtaken Germany as the worlds biggest exporter. May Actis Acts launches its community outreach programme across the emerging markets. July Spain wins the World Cup 2010 at Soccer City in Johannesburg. November Actis completes its third investment in Brazil in as many months after investing US$58m in XP Investimentos (supermarket chain, CSD and cleaning products company, Gtex, completed in September and October respectively). December Reckitt Benckiser agree to acquire Indian personal care company, Paras, well known for brands including Krack, Moov and Set Wet hair gel, for approximately US$726m. December Actis invests US$77m in one of Indias leading power developers, GVK Energy.

2011
January Unrest sparked in Tunisia towards the end of 2010 triggers the Jasmine Revolution. On 25 January a national holiday in Egypt is renamed the Day of Rage, protests and demonstrations follow, Hosni Mubarak resigns as President 17 days later. March Actis wins PEIs Best Private Equity Firm in Africa award for the fourth year running and wins PEIs Best Private Equity Firm in Latin America for the first time.

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Actis portfolio at work

Vlisco Group
Fashions fade, but style is eternal. And for more than 160 years the Vlisco Group has led the way, creating and manufacturing the most coveted wax fabrics in Africa. As synonymous with West Africa as Thailand is with raw silk or Italy is with leather, the Vlisco Groups branded fabrics have a long history of design and innovation: grounded in traditional African culture but now tailored to the tastes of modern women in the regions growing middle class. Established in the 1850s and still headquartered in the Netherlands, the company originally exported printed batik to the Dutch East Indies, now Indonesia. In 1876 it expanded into Africa. It now sells more than 51 million yards of fabric each year to some nine countries across West, Southern and Central Africa, not to mention growing online sales to the African diaspora in Europe and America, and a growing range of branded accessories. The companys brand portfolio includes Vlisco which is commonly known as Original Dutch Wax and considered the premier brand in the West African niche market of womens luxury apparel. Its bold and colourful collections set the trends that others follow. Vlisco Group brands include the mid-range Uniwax and GTP, which are manufactured and sold in Cte dIvoire and Ghana, and the younger, more contemporary Woodin brand which sells across the region. The group employs more than 2,100 people of whom 1,500 are based in West Africa. But for every person it employs directly, ten more
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jobs are created, with business for salesmen, shopkeepers and tailors driven by Vliscos products. And in the face of cheap imitations and imports from China, Vliscos products endure, not just because of their quality but because the companys heritage and fabric archive mean that women today can wear the same prints as their grandmothers did, creating a loyalty and affection for its designs that is hard to match. Actis took over the Vlisco Group in September 2010. As a company that also sits in a developed market but whose reach is pan-African, we felt an affinity with the Vlisco Group, and knew we could bring Actiss knowledge of consumer companies gained from other emerging markets to help it meet the increasing demand for its products. To drive this change, we introduced CEO Hans Ouwendijk, formerly of Mexx and Laura Ashley. Our aim is to double the size of the business in the next four years and shift it from a production focused organisation to one with a developed sales and marketing culture that manages all of its brands together. This ambition includes expanding into East Africa, growing the Woodin brand and establishing a presence in Nigeria, which has recently lifted a ban on imported textiles. As Africa continues to emerge onto the global stage, we want Vlisco to be an international ambassador of African style, combining contemporary attitudes with an African heritage and continuing to create fabrics that will be enjoyed and worn by generations to come.

Key facts: Date of investment September 2010 Type of deal Management Buy-in Deal size US$151m

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Actis portfolio at work

XP Investimentos
Brazil is often referred to as the country of tomorrow. Since 2003, its staggering rate of growth has seen 25 million people enter the middle class. Their purchasing power has led to a boom for consumer industries. But for those wanting to secure their prosperity, spending money today has given way to the desire to invest and safeguard tomorrow. Established in 2001, XP Investimentos (XP) has grown over the last ten years from a start-up to the countrys largest independent retail brokerage with 100,000 customers and 220 branches in more than 100 Brazilian cities. Brazilians have traditionally invested in savings accounts and physical assets like real estate but XPs management team recognised early on in the companys development that what was stopping people from investing in equities was their lack of financial savvy. So they launched a range of training courses covering everything from investment basics to advanced portfolio management, giving people the know-how they need to participate in the world of investing and managing wealth. Today, as well as being Brazils leading independent brokerage firm, XP is also the countrys largest financial education provider. It has trained some 350,000 people and offers more than 350 seminars every month. And with many students going on to become loyal XP customers, its paid-for courses have enabled the company to grow organically at very low cost. In a market dominated by universal banks, who limit their offering to their own products, it has become a trusted brand and the platform
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of choice for independent financial advisors, with 1,200 professional investment brokers using its stateof-the-art technology platform and support service to manage their clients. The potential for growth remains impressive. Currently only 0.3% of Brazilians invest directly in equities. That is well below India (1.4%), China (3.1%) and tiny when compared with the developed markets (average 30%). But peoples growing confidence in the prevailing macroeconomic outlook and the stability of the currency means Brazils equity culture is picking up pace, with the Brazilian Stock Exchange predicting that individual investor numbers will reach five million within the next five years. At Actis, weve been in the emerging markets long enough to recognise such a growth trajectory. We invested in XP in 2010 to help the company to expand its network and further build the technology and product development capabilities that will grow its market share. The vision is to make XP Brazils largest financial shopping centre able to provide customers with access to stock exchanges, mutual funds, bonds, pensions, insurance, and a range of other financial products, all in one place. We have paired our financial capital with intellectual capital, introducing Mark Collier, a former senior executive of Charles Schwab, to XPs board to assist it as it grows. XP has always been a pioneer and our goal is to work with it towards an IPO and make it the first publicly traded company of its kind in Brazil.

Key facts: Date of investment November 2010 Type of deal Expansion Deal size US$58m

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Actis portfolio at work

One Airport Square

It takes just one building to put a city on the map; to change perceptions and expand the limits of whats considered possible. One Airport Square, a modern office and retail development in Accra, is one of these breakthrough buildings. Striking and contemporary in style, it will be the most environmentally friendly office complex in Ghana, achieving qualification either through a LEED rating or Green Star and becoming the benchmark against which Ghanas Green Building Council grants all future certification. Well-planned offices and modern retail experiences are something that Ghanaians have long wanted. As the countrys emerging oil industry and service sector have grown, so has its middle class and with it, a desire for better retail environments. Ghanas political stability has also made it attractive to multinationals looking to enter West Africa, driving up the demand for A-grade office spaces. But while the appetite for quality commercial premises has grown, there remains a chronic undersupply, caused by a lack of development execution expertise, patient capital and investment experience. With a proven track record of delivering international standard real estate projects in these markets, we decided to address the development execution challenge head on. In April 2010, we established Laurus Development Partners, a real estate development management company based in Accra. Led by CEO Carlo Matta, formerly Managing Director at Hines
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Europe, this development model pairs Actis capital and our real estate investment track record with an internationally experienced local team able to meet the execution challenges of the West African market. One Airport Square is the first Actis /Laurus project but it is a model the team will replicate across West Africa. Located in Accras growing commercial district of Airport City, One Airport Square will comprise 17,000 square metres of retail, office and car parking space once it is completed next year. Fusing tradition with pioneering green solutions, it has been designed by award-winning Italian architects MCA. Its concrete and glass exterior echoes the diamond patterned bark of Ghanas palm trees and the decorative facades of the mud houses customary in the North East of the country. Specifications include natural ventilation via a central atrium, rain water recycling and concrete overhangs to prevent over-heating and reduce energy consumption. The floors are raised, parking is ample, floor-plates are large and flexible, health and safety is of an international standard in short this is a building which would hold its own in Munich or Singapore. The development will have an open piazza to encourage social interaction and the hosting of small events for the local business community. During construction, the project will employ more than 150 Ghanaian construction workers and is sourcing more than 40% of all materials locally, helping to stimulate the regional economy. For us, One Airport Square is a prototype that we expect will

become a stereotype. It falls right at the heart of our real estate investment strategy in Sub-Saharan Africa and will redefine working environments in this market. Key facts: Date of investment December 2010 Type of deal Real estate development

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Actis portfolio at work

Sterling Add Life

Your health is your most precious asset. And when things go wrong, you need the security of knowing you can access the best possible healthcare. In Gujarat, thanks to Sterling Add Life, people are able to consult with leading specialists and receive treatment in world class facilities. With public healthcare in India notoriously overburdened and poorly managed, the Indian healthcare market has long been underserved, with key ratios such as beds/1,000 population significantly below the emerging markets average. But as the countrys middle class has grown, rising disposable incomes have spurred more people to take out health insurance or pay to receive medical care and spending on healthcare in India has grown by almost 14% a year. This has accelerated demand for private hospital chains like Sterling. Actis invested in Sterling in 2006 to fuel the companys expansion across Gujarat, one of the wealthiest, fastest growing and most industrialised states in India. The initial aim was to increase the number of beds from 200 to 900. But by the end of 2010, it had already exceeded this target: today it has a network of more than 1,100 beds across six multispeciality hospitals in the cities of Ahmedabad, Baroda, Rajkot, Bhavnagar, Mundra and Adipur, as well as two satellite centres, one each at Kalol and Mehsana. Now the leading private hospital group in Gujarat, it has set the standard for healthcare in the region. Its hospital in Ahmedabad was the first in Gujarat to be accredited by
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the National Accreditation Board for Hospitals and Healthcare Providers (NABH) and has been ranked Best Hospital in India by market research firm IMRB three years in a row since 2007 . And it is not just Gujaratis that use Sterling. The lack of quality healthcare in neighbouring states means patients from Rajasthan, Madhya Pradesh and Maharashtra travel up to eight hours to access its services which include specialist consultations and surgery for a wide variety of diseases, as well as provisions for radiology, pathology, dentistry, ophthalmology, bone marrow transplants and obesity treatments. Actis brought in a CEO and CFO to assist Sterling as it grew in size and complexity. We engaged Bain & Company to help improve efficiencies and worked with the management team to enhance IT systems, financial auditing and to ensure compliance with the highest standards of health and safety. Developing additional safeguards covering transparency and ethics was also something we considered vital. These measures have included the introduction of a clear pricing and billing procedure and establishing Sterling as one of the only private hospital chains to pay all trolley porters and ward staff minimum wage as well as providing them with discounted access to all of Sterlings services. Because Life Matters is Sterlings strapline. It is a sentiment that has resonated with Indias middle class and a philosophy which has driven the creation of what is now recognised as Indias leading regional healthcare company.

Key facts: Date of investment June 2006 Type of deal Expansion Deal size US$46m

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Actis portfolio at work

Xiabu Xiabu
Diners at Xiabu Xiabu, Chinas most popular hotpot restaurant chain, savour the taste of this warming favourite that combines tradition with the speed of fastfood. With more than 150 branches across Beijing and Tianjin, its contemporary design, pristine eating environment, and modern twist on a Chinese staple, have made it a hit with people looking for an affordable, convenient meal. And it is a particular favourite of young women, who prefer healthy hotpot to fried junk food. Chinas restaurant market, worth US$170bn in 2007, has grown at 17-18% a year as people choose to eat out more often. But although the urban Chinese have more spending power, work and family demands mean they have less time to cook, which has led to an appetite for American and Asian fast food. Xiabu has benefited from these trends and has expanded rapidly, rolling out restaurants in office blocks and shopping centres. Xiabu pioneered the individual, barstyle hotpot format: so rather than sharing from a traditional communal hotpot, diners can create and enjoy their own dish. All stock, vegetables and meat are prepared in a central kitchen in Beijing and transported to each store daily, ensuring consistent food quality, hygiene and freshness. Xiabu opened its first branch in 1998 and when Actis took over the controlling share in 2008 it had 60 restaurants, mainly in Beijing and Tianjin. The original goal was to triple this number over the following three years, but by the end of 2010, the chain included 155 outlets and had grown to become one of the largest
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quick service restaurant chains (in terms of number of stores) in the capital, just behind Yum! which operates KFC and Pizza Hut, and McDonalds. It was also ranked as one of the top ten most famous brands in Beijing. Our aim is now to open 235 restaurants across China by the end of 2011 and make Xiabu not just a leading regional chain but a national fast food brand. Key to this has been establishing Xiabus presence in Shanghai. Xiabu opened five restaurants in the city on the same day in September 2010 achieving a PR tour de force. Some 25 more are scheduled to open in Shanghai in 2011, in addition to the 55 other outlets planned for Beijing and Tianjin. As well as continuing to expand the chain, weve also introduced and worked with the boards Quality Assurance Director to uphold international standards of health and safety. Opening in May 2011, Xiabus new central kitchen will not just standardise operations and be able to serve more restaurants, but also comply with HACCP and ISO 22000 guidelines, ensuring food hygiene and the use of pesticide-free vegetables across the chain. Improving energy efficiency and reducing food waste have also been key ESG goals and progress will be measured later this year. Xiabu Xiabu started with the simple concept of one person, one pot. It is a formula thats worked and evidently a recipe for success.

Key facts: Date of investment November 2008 Type of deal Buy-out capital Deal size US$50m

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Actis portfolio at work

Umeme
Secure and reliable power is vital if an economy is to grow. But after decades of political instability, Ugandas electrical infrastructure had become neglected to such an extent that it was not just inefficient or badly maintained but unsafe, with rotten poles and downed cables a familiar sight. The tropical climate, encouraging rapidly growing vegetation and armies of termites to attack the wooden electricity poles, only compounded the problem. At present 7% of Ugandas 33 million people have access to the grid. Transforming the network into a service able to meet the countrys development goals and accommodate growing energy consumption, which is increasing at 10% a year, has required a total overhaul. As a result of years of poor maintenance 120,000 poles, cables and related sub-stations had fallen into disrepair. Established in 2005, Umeme is the electricity distribution company that is meeting this challenge under a 20 year agreement. Its network of more than 20,000 km of cables extends across Uganda with a concentration on the semi-urban strip from Entebbe through Kampala to Jinja. When Actis took over Umeme in November 2009, network improvement was already underway but Actiss involvement has boosted progress. By the end of 2010 Umeme had replaced over 90,000 poles, spent US$100m on improvements, and secured a loan from the IFC to help fund the refurbishment programme. Safety is at the top of Umemes agenda. The network will be substantially upgraded by the end of 2012 and weve put in place a new board and procedures that have made a big difference to public, employee and contractor safety. Establishing an ESG committee and appointing a specialist to lead safety, health and environmental activities was part of this and has enabled Umeme to reduce the number of accidents and fatalities associated with the network. To help achieve this, Umeme has rolled out an extensive school education programme and set up a 24-hour safety helpline to log equipment damage. Sub-stations have been boxed in and Umeme has cut response times to emergency call outs in the past it could take up to half a day to make the area around a fallen or unstable pole safe: by the end of 2010 it was taking less than 30 minutes. Since Umeme began its improvement programme it has connected more than 40,000 new customers annually and now distributes electricity to some 405,000 Ugandans. As well as being safe and reliable, to fuel development electricity must also be affordable. By implementing a new billing system and improving the networks performance Umeme has reduced energy losses from 38% in 2005 to 30% by 2010, which will lead in the long term to a reduction in the power sector costs. The scale of works undertaken by Umeme is huge but for us, it is about doing business responsibly, improving peoples daily lives and helping a country to achieve its ambitions. Key facts: Date of investment November 2009 Type of deal Acquisition Deal size US$15m

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Actis data

Regions and sectors

London

Cairo

Mum

Lagos Nairobi

So Paulo Johannesburg

Principal sectors
Business Services: Logistics Mining, oil and gas services Outsourcing Specialist business process outsourcing
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Consumer: Education Healthcare Home and personal care Restaurants Retail including food

Financial Services: Banks Consumer credit Financial services distribution Payments

Regions
Africa China Latin America South Asia South East Asia

Beijing

mbai

Singapore

Industrials: Construction and building equipment Construction and building materials Electrical and electric components Power

Energy: Distribution Power generation (renewables and non-renewables) Transmission

Real Estate: Hospitality Industrial Office Residential Retail

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Actis data

Investments
This page reflects the Actis portfolio across all five regions and all six sectors, captured on 31 March 2011. Investments by sector: Consumer

27 25 14 14 9 3
% % %
Other Energy

Financial Services

Industrials

Business Services

Real Estate

Value of investments by region:

Africa South Asia China Global EM South East Asia Latin America
Average deal size (private equity):

43% 29% 10% 7% 6% 5%

US$105m

US$25m US$13m

Actis Fund 1s

Actis Fund 2s

Actis Emerging Markets 3

32 In Review

Investors
Actis invests on behalf of investors based predominantly in the UK, Europe, the US and Canada with growing interest from investors in Africa, the Middle East, Asia and Australia. Investors by region: US and Canada

43 23 21 13
% % %

UK and Europe

Asia and Australia

Africa and Middle East

Investors by type:

Percentage

Public Pension

Fund of Funds and Investment Managers

Private Pension

Sovereign Wealth Funds

Family Offices and Private Foundations

Financial Institutions and Corporates

DFI

University Endowments

Insurance Companies

Data notes:
Investments: includes all current investments in Actis Emerging Markets 3, Actis Fund 2s, Actis Africa Agribusiness Fund, Actis Infrastructure 2, Actis India Real Estate Fund and Actis Africa Real Estate Fund. Average deal size: where an investment straddles two generations of funds, (e.g. Xiabu Xiabu, 7 Days Inn) we have counted the data in the later fund. Investors: figures exclude CDC Group plc. CDC Group plc is the anchor investor in each of Actiss funds and represents approximately 45% of total commitments to those funds.
In Review 33

Actis data

Portfolio companies
Sector Region Investee company Anthelio Healthcare Integreon KS Distribution LMKR RTT Group Savcio Veeda Description Hospital operations outsourcing Professional services outsourcing Oil and gas and marine products Information management services for oil and gas industry Supply chain and logistics services Electrical repairs and services Clinical research organisation

Business Services

South Asia South Asia South East Asia South Asia Africa Africa South Asia

Consumer

China China South East Asia China Latin America Latin America South Asia China South Asia South Asia Africa China

7 Days Inn Ambow Asia Books China PSE Investment Holdings CSD Gtex Nilgiris Northpole Sterling Add Life Supermax Vlisco Group Xiabu Xiabu

Budget hotel chain Personalised education and training Book and magazine retailer and wholesaler Tertiary education Supermarket/retail chain Cleaning products Convenience stores Tent, home and garden equipment and luggage manufacturer Hospital owner and operator Manufacturer and marketer of shaving blades and toiletries Fashion fabrics Hot Pot restaurant chain

Energy

Global EM

Globeleq GVK Energy Limited Umeme

Power generation developer and owner Power generation Electricity distribution

South Asia Africa

Financial Services

Africa Africa Africa Africa Africa Africa South Asia South Asia Latin America

Alexander Forbes Banque Commerciale du Rwanda CIB DFCU Diamond Bank EMPH IDFC National Stock Exchange of India XP Investimentos

Diversified financial services Bank Bank Bank Bank Payments processing Infrastructure finance Stock exchange Retail broker dealer

Industrials

Africa South Asia South Asia South Asia

Actom AVTEC Dalmia Cement Dalmia Sugar

Manufacturer and distributor for electrical engineering industry Engine and transmission manufacturer Cement plant Sugar mill operator / ethanol producer

34 In Review

This shows all Actis portfolio companies, at 31 March 2011. Individual Investment Managers are predominantly based in the region where the investment is located. These individuals are supported by the relevant sector team.

Location India India South East Asia Pakistan South Africa South Africa India

Investment manager Homer Paneri Homer Paneri Gary Addison Homer Paneri David Cooke Natalie Kolbe Homer Paneri

Deal type Expansion Expansion Replacement Expansion Buy-out Buy-out Expansion

Investment date Oct, 2010 Feb, 2010 May, 2010 Oct, 2007 Jun, 2007 Sept, 2005 Feb, 2007

China China Thailand China Brazil Brazil India China India India Sub-Saharan Africa China

Jennifer Jin Tao Sun Sugandhi Matta Tao Sun Patrick Ledoux Beatriz Amary Shomik Mukherjee Meng Ann Lim Arunima Patel Prabir Talati Murray Grant Dong Zhong

Expansion Expansion Buy-out Start-up Expansion Expansion Buy-in Other Expansion Replacement Buy-in Buy-out

Oct, 2008 Sept, 2008 Mar, 2006 Nov, 2009 Sept, 2010 Oct, 2010 Oct, 2006 Sept, 2001 Jun, 2006 Feb, 2011 Sept, 2010 Jul, 2008

Global EM Malaysia / India Uganda

Torbjorn Caesar Sanjiv Aggarwal David Grylls

Replacement Expansion Replacement

Sept, 2009 Dec, 2010 Nov, 2009

South Africa Rwanda Egypt Uganda Nigeria Mauritius India India Brazil

Natalie Kolbe Chris Benson Hossam Abou Moussa Sarah Mathies Ngozi Edozien Hossam Abou Moussa Nagarajan Srinivasan Nagarajan Srinivasan Denis Pedreira

Buy-out Other Replacement Replacement Expansion Buy-out Expansion Expansion Expansion

Jul, 2007 Dec, 2004 Jul, 2009 Jan, 2003 Apr, 2007 Feb, 2010 Aug, 2010 Apr, 2007 Nov, 2010

South Africa India India India

Jonathan Matthews Prabir Talati Asanka Rodrigo Asanka Rodrigo

Buy-out Replacement Expansion Expansion

Aug, 2008 Jun, 2005 Mar, 2006 Mar, 2006

In Review 35

Actis data

Portfolio companies
Sector Region Investee company Halonix Inpac MFE Mouka Peters Papers Poulina Sandhar Sinai Marble Swaraj Mazda Teknicast TEMA Description Halogen bulb and lamp manufacturer Packaging provider Aluminium formwork designer Foam products manufacturer Paper merchant Branded food and building products Supplier of automotive components Commercial marble exporter Light commercial vehicle manufacturer Aluminium die casting Manufacturer of heat exchangers

Industrials continued

South Asia China South East Asia Africa Africa Africa South Asia Africa South Asia South East Asia South Asia

Other

South East Asia Africa Africa Africa Africa Africa Africa Africa Africa Africa Africa South Asia

APEC Banro Candax Copperbelt Minerals Grain Bulk Handlers Kilombero Valley Teak Co Mineral Deposits Platmin Seven Energy Tanzania Tea Packers Teranga TRIL Roads Private Limited

Oil and gas exploration Gold exploration and development Oil and gas exploration Mining and resources Grain facility Teak plantation establishment Mineral sands and gold mining Mining and resources Oil and gas production Tea production Gold mining Toll road developer

Real Estate

Africa Africa Africa Africa Africa Africa Africa South Asia

Accra Mall Capital Properties Ikeja City Mall IOREC Laurus Development Partners Limited Nairobi Business Park One Airport Square Vaishnavi

Retail and leisure development Commercial office development Retail and leisure development Real estate development manager Real estate development manager Commercial development Commercial development Mixed use development

36 In Review

Location India China Malaysia / India Nigeria South Africa Tunisia India Egypt India Malaysia India

Investment manager Shomik Mukherjee Meng Ann Lim Ching Lee Ngozi Edozien Jonathan Matthews Meriem Smida Prabir Talati Hossam Abou Moussa Madhusudan Sharma Gary Addison Viraj Mahadevia

Deal type Buy-in Expansion Buy-out Replacement Buy-out Other Expansion Expansion Replacement Buy-out Expansion

Investment date Jun, 2006 Apr, 2007 Jul, 2007 Jun, 2007 Feb, 2005 Aug, 2008 Dec, 2005 May, 2007 Dec, 2003 Aug, 2008 Apr, 2005

South East Asia DRC Tunisia DRC Kenya Tanzania Senegal South Africa Nigeria Tanzania Senegal India

Lionel Soh Murray Grant Murray Grant Murray Grant Michael Turner Michael Turner Murray Grant Murray Grant Ngozi Edozien Michael Turner Murray Grant Sanjiv Aggarwal

Start-up Expansion Expansion Expansion Replacement Start-up Expansion Expansion Expansion Expansion Expansion Expansion

Oct, 2007 Oct, 2005 Apr, 2005 Jul, 2008 Jan, 2007 Jan, 2001 Nov, 2004 Oct, 2003 Feb, 2007 Oct, 2001 Dec, 2004 May, 2010

Ghana Tanzania Nigeria Mauritius Mauritius Kenya Ghana India

Louis Deppe Louis Deppe Louis Deppe Kevin Teeroovengadum David Morley Koome Gikunda Amanda Jean-Baptiste Parvesh Gupta

Real estate development Real estate development Real estate development Start-up Start-up Real estate development Real estate development Real estate development

Nov, 2006 Nov, 2006 Apr, 2008 Jan, 2009 Apr 2010 Nov, 2006 Dec, 2010 Jun, 2008

In Review 37

Actis data

Team

10

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16

17

18

19

20

21

22

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24

25

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27

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01 Gary Addison, Partner; Head, Business Services 02 Benson Adenuga, Director, Financial Services 03 Sanjiv Aggarwal, Partner, Energy 04 Beatriz Amary, Director, Consumer 05 Lou Baran, Head, HR 06 Ron Bell, Head, Operations 07 Jonathon Bond, Partner; Head, Investor Development* 08 Torbjorn Caesar, Partner; Co-head, Energy* 09 Mahesh Chhabria, Partner, Industrials 10 Chris Coles, Partner, Financial Services* 11 David Cooke, Director, Consumer 12 Louis Deppe, Director, Real Estate 13 Ngozi Edozien, Director, West Africa 14 Michael Chudi Ejekam, Director, Real Estate 15 Sherif Elkholy, Director, Consumer 16 Steven Enderby, Partner, Industrials 17 Paul Fletcher, Senior Partner*

18 Mark Goldsmith, Director, ESG 19 Murray Grant, Partner, Africa 20 David Grylls, Director, Energy 21 Simon Harford, Partner, Financial Services 22 Lucy Heintz, Director, Energy 23 Adiba Ighodaro, Director, Investor Development 24 Amanda Jean-Baptiste, Director, Real Estate 25 Jennifer Jin, Director, Industrials 26 Natalie Kolbe, Director, Consumer 27 Chu Kong, Partner, Latin America 28 Ritu Kumar, Senior Advisor, ESG 29 Tashi Lassalle, Head, Communications 30 Patrick Ledoux, Partner, Latin America 31 Meng Ann Lim, Partner; Head, China & SE Asia* 32 Tanya Lobel, Director, Actis Acts 33 Nick Luckock, Director, Financial Services 34 Alistair Mackintosh, Partner, Chief Investment Officer*

38 In Review

This page shows investment professionals, from Director level and above alongside their main specialism, as well as key members of the firms global support services platform. The Actis Executive Committee members are starred: the committee meets monthly.

35

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40

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51

52

53

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65

35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

Alasdair Maclay, Director, Investor Development Sarah Mathies, Director, Financial Services Jonathan Matthews, Director, Industrials Robert McGregor, Partner, Energy David Morley, Partner; Head, Real Estate* Hossam Abou Moussa, Director, Financial Services Shomik Mukherjee, Partner, Consumer Marc Nahum, Director, Investor Development Peter Olds, Director, Legal Angus Or, Director, Operations, Asia Paul Owers, Partner; General Counsel Homer Paneri, Director, Business Services Denis Pedreira, Director, Financial Services Rick Phillips, Partner; Head, Consumer Gautham Radhakrishnan, Director, Business Services G Rathinam, Partner, Industrials Mark Richards, Partner; Head, Financial Services

52 Asanka Rodrigo, Director, Industrials 53 Fash Sawyerr, Director, Business & Strategy 54 Peter Schmid, Partner; Head, Africa & Latin America* 55 Lionel Soh, Director, Industrials 56 Srinivasan Srini Nagarajan, Director, Financial Services 57 Tao Sun, Partner, Consumer 58 Prabir Talati, Director, Consumer 59 Kevin Teeroovengadum, Director, Real Estate 60 Michael Till, Partner; Co-head, Energy* 61 JM Trivedi, Partner; Head, South Asia* 62 Michael Turner, Director, East Africa 63 John van Wyk, Partner; Head, Industrials 64 Jiansheng Wang, Partner, Financial Services 65 Dong Zhong, Partner, Consumer

*denotes Executive Committee member

In Review 39

Actis invests exclusively in the emerging markets. With a growing portfolio of investments in Asia, Africa and Latin America; we currently have US$4.6bn funds under management. Our work at Actis is driven by the conviction that we bring more than capital to our investments; we bring benefits to our investee companies, investors and broader society. We call this ethos the positive power of capital. Combining the expertise of over 100 investment professionals on the ground in nine countries, we are proud to actively and positively grow the value of those companies in which we invest. www.act.is Actis is a signatory to the United Nations Principles for Responsible Investment (UNPRI). An investor initiative in partnership with UNEP FI and the UN Global Compact. www.unpri.org

Africa Cairo +202 2792 9220 Johannesburg +27 11 778 5900 Lagos +234 1 448 5700 Nairobi +254 20 2219 952 China Beijing +86 10 6535 4800 Latin America So Paulo +55 11 3844 6300 South Asia Delhi Operations +91 11 6615 7200 Mumbai +91 22 6146 7900 South East Asia Singapore +65 6416 6400 United Kingdom London +44 20 7234 5000

This annual review forms the basis of Actiss compliance with the Walker Guidelines for Disclosure and Transparency in Private Equity. Actis has reported on a comply or explain basis as detailed by the guidelines. walker-gmg.co.uk

Actis LLP is a Limited Liability Partnership registered in England and Wales (registered number OC305927). A list of the members of Actis LLP is open to inspection at its registered office, 2 More London Riverside, London SE1 2JT, England. Actis LLP is regulated by the Financial Services Authority. Copyright 2011 Actis LLP. All rights reserved. Reproduction without permission is prohibited. Trademarks and logos are copyrights of their respective owners.