By Chuka Okafor
A recent conversation got me thinking about private equity in Namibia; not in terms of performance, numbers or fund rankings – but in terms of structure and suitability.
In emerging markets, we often talk about ‘unlocking opportunity’, yet we spend less time interrogating whether the models that we use are actually fit for the environment that we operate in.
To explain what I mean, it helps to start with an analogy: Imagine a small, hot town where people like ice cream. In that town, you will almost certainly find vanilla and chocolate ice cream. Perhaps strawberry if the market is doing well and its tourist season.
What you will not find is a wide range of niche flavours – not because people wouldn’t enjoy them, but because the market cannot support everything at once. Namibia’s private capital market works much the same way.
Capital exists – but the market for niche flavours is small
Namibia is often described as capital-constrained. In aggregate, that is not quite accurate. Local pension funds, insurers, development finance institutions, and family office-type wealth runs into the hundreds of billions of Namibian Dollars.
It helps that regulation requires a meaningful portion of institutional savings to be invested domestically. The constraint is therefore not the amount of capital, but rather the diversity of participants and styles. A small group of Limited Partners / Investors anchor most funds, often across fixed vintages and replicated strategies.
Unlike developed markets, where hundreds of Investors with different mandates coexist, Namibia’s ecosystem is tight, concentrated, and interconnected. Capital is recycled rather than continuously expanded. In ice-cream terms: I see enough ice cream makers with enough ingredients, but there aren’t enough customers to sustain twenty different flavours. The system therefore converges rationally on what is familiar.
Opportunity is real, but unevenly timed
This does not mean that Namibia lacks opportunity. On the contrary, there are many nascent investment opportunities across infrastructure, energy, logistics, agri-business, industrial services, and the built environment.
What Namibia lacks is constant deal activity at every stage of the company and capital cycle. Opportunities tend to emerge unevenly. They require patience, operational build-out, regulatory navigation, and often long gestation periods.
They do not arrive neatly packaged within fixed investment windows. This matters because the typical closed-end private equity model assumes a steady rhythm of deployment and exit. That assumption holds in large, liquid markets. In small markets, it introduces friction.
Time is the least discussed risk
One of the most under-appreciated risks in emerging-market private equity is time. A manager may invest well, structure prudently, and build real value and still struggle because the timing is wrong. Funds raised just before COVID, or at the tail end of Namibia’s construction and government-spending boom, faced headwinds that had little to do with decision quality (although not all funds and investors are equal).
This raises an uncomfortable question: Are we judging decisions, or are we judging outcomes? As Annie Duke has observed, outcomes are noisy. Good decisions can lead to poor results, and vice versa. In markets with sharp cycles and thin liquidity, conflating the two leads to distorted conclusions.
The problem with forced exits
Closed-end funds assume that an exit is both possible and desirable within a defined timeframe. In Namibia, exits are episodic. Strategic buyers are few. Secondary markets are thin and mandates are more vanilla, some chocolate and strawberry if we’re lucky.
When exits are forced by fund timelines rather than asset readiness, value is often lost. Good assets are sold early, frequently to offshore buyers, and not because that is the best long-term outcome, but because the fund itself has an expiry date. This comes after the time pressure to invest – which is a different conversation altogether…
When this happens and the only offer is from an offshore buyer with no competitive bids; Namibia may give up more than ownership. It give up the ability to realise optimal value and compound value locally to more ice cream.
Structure shapes outcomes
Structure matters more in small markets than we admit. There is a meaningful difference between capital allocators and institution builders (the “ice cream makers”). Builders originate ideas, assemble teams, navigate regulation, and stay invested through cycles. Their value often emerges slowly. In emerging markets, they provide continuity and institutional memory.
Yet builders are poorly served by closed-end, time-bound structures. Their work rarely fits neatly into a ten-year fund life. Just as a platform becomes robust, the exit clock starts ticking. This is how long-term value is truncated.
When a model designed for large, liquid markets is applied without adjustment, the ecosystem naturally narrows. Familiar strategies dominate. Vanilla and chocolate crowd out everything else and even if ice cream makers want to make more and different flavours – who will buy them? The reason we keep getting vanilla and chocolate is not that other flavours are inferior. It is that the system is not designed to support them.
Manager selection in a nascent market
Institutional tenders play an important role in Namibia. They promote transparency and comparability, and they are well suited to markets with many managers and a meritocracy of deep track records.
While this remains relevant in many instances – in a smaller market, tenders tend to select for familiar structures, strategies optimised for compliance and managers who know how to answer the questions being asked… In other words, you get what fits the template.
Unsolicited strategies; those rooted in local insight and conviction, often struggle to meaningfully compete in such frameworks. Over time, tender-heavy systems train managers not to innovate, but to conform. The result is fewer flavours and thinner differentiation. We must not confuse “newness” with the same basic ice cream flavours with different toppings and packaging (form over substance).
Permanent capital and patience
Most professional investors in private markets often have the patience but not the time… Permanent or longer-duration capital changes the equation. It removes artificial exit pressure. It allows assets to be held, optimised, refinanced, or partially exited when conditions are right, and not when the calendar demands it.
Permanent capital is not without risk. Governance and incentives matter more, not less. But in a small market, it expands the opportunity set. It allows new flavours to exist. It makes pistachio ice-cream viable.
Many regulatory frameworks were designed with traditional funds in mind. That is understandable. But regulation should not inadvertently lock the market into a narrow set of outcomes. This is not a call for deregulation. It is a call for regulatory imagination and allowing institutional-quality permanent or hybrid continuation vehicles with appropriate safeguards. If Namibia wants to retain value locally, capital must be allowed to stay invested when staying makes sense.
Rethinking success
In developed markets, exit multiples and an internal rate of return (“IRR”) within a defined period may be a reasonable proxy for success. In smaller markets, it can be misleading.
In our case, we should also ask: What institutions were built? What capabilities were retained? What value continues to compound locally?
These outcomes matter even if they do not fit neatly into quarterly reports. You can’t eat IRR but you can continue to eat from the value that compounds. Ultimately, we will not get more flavours by demanding them at conferences or asking banks to do things that they are not setup to do. We’ll get them by allowing experimentation, patience, and diversity of approach. Vanilla and chocolate will always have a place. But if we want a deeper, more resilient market; one that builds and retains value locally, we must make room for more flavours and build a meritocracy for the ice cream makers to innovate and raise like-minded capital.
That requires rethinking manager selection, embracing longer-duration capital, backing independent sponsors and judging success not only by when we exit, but by what we build and leave behind.
* Chuka Okafor is an active Investorpreneur. His work sits at the intersection of alternative investing, M&A, financial markets development, and entrepreneurship, connecting capital and capability across Africa’s real economy.
