The
weekly roundup of Africa's Private Capital news
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Each week we sift through most Africa-related private equity, infrastructure and venture capital deal news stories, market opinion articles and information pieces and winnow them down to those we feel are the most important and interesting for investors, companies and their advisors. Here's the latest issue, covering all happenings over the last 7 days. We hope you find the service useful. We'd be delighted if you shared it with any interested colleagues and/or partners. If they would like to receive their own weekly copy, they're more than welcome
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This week's issue supported by...
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The 2015 Guide to sub-Saharan Private Equity
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Make sure you reserve your copy of AfCD's definitive guide to the private capital investors, funds and investment firms in sub-Saharan Africa. Once published, enjoy the following key benefits:
- For LPs; review SSA GPs, their strategies and their funds
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- For Corporates; source assets for acquisition, targets for divestitures
- For Advisers; develop clients, transaction ideas and more
Contact Teresa Hall at [email protected] to reserve your copy today.
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The week in brief...
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The Abraaj Group was involved in two of the most notable private equity stories coming out of Africa last week. On Monday, they announced that they had fully exited their investment in pan-African insurer UAP Holdings by completing the sale of a 13.6% stake to Old Mutual. On Tuesday it was announced that Abraaj had agreed to buy a majority stake in Nigerian mattress manufacturer Mouka Ltd., giving fellow emerging markets private equity firm Actis a full exit in the process. While no details of the terms for either deal were disclosed, you may remember that in January this year, Bloomberg reported that Old Mutual was paying $155 million in cash for 37.3% of UAP.
Meanwhile, adding to its portfolio of East African investments, Fanisi Capital is spending $6 million to take a significant minority position in Arusha-based Kijenge Animal Products. This latest deal is the eighth transaction for the $50 million Kenya-based fund. And the IFC is backing Alcazar Energy, an independent renewable energy power developer and producer that was formed in early 2014, with $25 million in equity to help it develop wind and solar plants in the MENA region.
Staying with the renewable energy sector, Greenstone Equity Partners, one of the Middle East's largest fund placement firms, is working with TIMU Energy Holdings, the joint venture collaboration between infrastructure investor Harith General Partners and renewable energy investment firm Jones Pohl, to raise capital from GCC investors for clean energy and natural gas power projects on the continent. The fund is seeking between $20 million and $25 million for early stage investments, and currently has 7 potential projects in 5 African countries in its pipeline.
In other fundraising news, the IFC featured in the largest fundraising announcement of the week as it was joined by the Arab Fund for Social and Economic Development, the Arab Investment Company and the Arab Petroleum Investment Corporation in committing to invest a total of $125 million in the IFC's MENA Fund. The fund will focus primarily providing private companies in the infrastructure, financial services and manufacturing sectors with growth equity capital in a bid to spur employment and economic development in the region.
Cupric Canyon Partners announced that it plans to spend $200 million to bring a new copper-silver mine in Botswana into production. In mid-June the Barclays Capital-backed private equity firm had bid $35 million to acquire Discovery Copper Botswana out of liquidation, whose mothballed Boseto mining assets are located approximately 30 kms away from the site of the new mine. allowing Cupric to contain the costs of developing the new mine. It's anticipated that the mine will produce 50,000 tonnes of copper and 1.8 million ounces of silver annually, once it starts shipping to the market in 2018.
And finally, an interesting interview from CNBC Africa discussing the challenges and opportunities of investing pension fund assets in infrastructure projects with Opuiyo Oforiokuma, the CEO of ARM-Harith's Infrastructure Investments and Niyi Falase, the Managing Director of Nigerian pension fund administrator CrusaderSterling Pensions.
You can review these and other stories by
scrolling
down and reviewing the headlines, abstracts and links.
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Private Equity
Actis exits Mouka stake in secondary sale // africacapitaldigest.com
The Abraaj Group has acquired a majority stake in Nigerian mattress manufacturer, Mouka Ltd, from emerging markets private equity firm Actis and the firm's founding Moukarim family. While Actis is fully exiting its majority investment, the Moukarim family will still retain a minority interest. The financial terms of the deal were not disclosed.
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Private Equity
Abraaj completes deal to sell 13.6% stake in UAP Holdings // gulfbusiness.com
The Abraaj Group, the UAE-based private equity firm, has announced the completion of the deal to sell its 13.6% stake in UAP Holdings , the pan-African insurer, thereby fully exiting its position in the firm. The value of the transaction was not reported. In January this year, Old Mutual agreed to spend $155.5 million in cash to acquire stakes owned by Abraaj, AfricInvest and Swedfund, increasing its stake in UAP to 60.7%. Abraaj first invested in UAP alongside Africinvest and Swedfund in March 2012.
Read more...
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Private Equity
Stellar Capital Partners takes 26% stake in Torre // bdlive.co.za
Stellar Capital Partners has agreed to pay R690 million (approximately $55 million) to acquire a 26% stake in South African industrial services and supplies business, Torre, from an undisclosed vendor consortium.
Read more...
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DFIs
The IFC is making a $25 million equity investment in Alcazar Energy, the independent developer and power producer focused on renewable energy generation across the Middle East, Turkey and Africa. The capital will be used to develop and operate wind and solar power plants, helping to increase power generation capacity in the region as well as support economic growth and create jobs.
Read more...
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Private Equity
Fanisi spends $6mln for agribusiness stake // reuters.com
Fanisi Capital, the private equity firm based in Kenya, is spending $6 million to acquire a significant minority stake in Kijenge Animal Products, a mid-sized maize flour milling, animal feed milling and poultry production farm located in Arusha in Northern Tanzania. The exact size of the stake and any additional terms of the deal were not reported. The transaction brings the total number of companies in the $50 million fund's portfolio to eight, which are located across East Africa and in a number of sectors including agribusiness, retail, FMCG, education and healthcare.
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The IFC is backing renewable energy provider Alcazar Energy with $25 million in equity
Image Credit: Alcazar Energy
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Private Equity
IFC MENA Fund raises $125 million
// africacapitaldigest.com
The IFC, the Arab Fund for Social and Economic Development, the Arab Investment Company and the Arab Petroleum Investment Corporation are investing $125 million in the IFC's MENA Fund. The fund will focus primarily providing private companies in the infrastructure, financial services and manufacturing sectors with growth equity capital in a bid to spur employment and economic development in the region.
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Private Equity
Zoscales holds first close for maiden fund at $50mln
// africacapitaldigest.com
Zoscales Partners, an investment firm focused on investments in Ethiopia has announced that it expects to exceed its first close target of $50 million for its maiden growth equity fund by October 2015, making it very likely that it will hit its $75 million final close target by the end of the year.
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Projects & Portfolio Companies...
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Financial Services
Stellar Investment Holdings emerges from AfrAsia CF MBO // bdlive.co.za
Stellar Capital Partners has formed a new financial services hub with the management buyout of AfrAsia Corporate Finance, the boutique investment bank. The new company, Stellar Investment Holdings, will still specialize in investment banking advisory services and corporate lending, and could benefit from a potentially lucrative investment management arm with deal flow from Stellar Capital Partners. Business Day quotes Ryan Wood Collier, the CEO of SIH, as saying "The vision behind the Stellar Group is to create a market-leading investment management and advisory firm in SA, emulating the successful models adopted by well-known US private equity firms Blackstone and KKR."
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Mining
Cupric to spend $200mln to build copper-silver mine // africacapitaldigest.com
Having recently acquired Discovery Copper Botswana, owner of the mothballed Boseto Copper Mine out of liquidation for $35 million last month, private equity firm Cupric Canyon Capital is looking to leverage that investment by investing $200 million bring a new copper-silver mine located some 30 kms away into production.
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Mining
Montero receives positive review on phosphate mine // africacapitaldigest.com
Following the announcement in March this year that Montero Mining and Exploration has entered into a definitive agreement with Ovation Capital to fund the development of Montero's Duyker Eiland phosphate rock properties near Saldanha Bay, the findings of the initial report that the South African investment firm commissioned from DRA Global to review a prior Technical report and a Preliminary Economic Assessment report were announced last week.
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Renewable Energy
Work starts on Mainstream Renewable project
// seerenewables.com
Construction has begun on the 80MW Nooport wind park in South Africa's Northern Cape. The project is owned by a consortium led by Lekela Power, the 60/40 joint venture between emerging markets private equity investor Actis and Irish power develop Mainstream, in partnership with other investors including Thebe Investment Corporation, the IDEAS Managed Fund, Future Growth Asset Management and Genesis Eco-Energy in partnership with Lereko Metier Sustainable Capital.
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Credit
Ghana to open short-term bond auctions to foreign investors
// reuters.com
Ghana is preparing to open its two-year domestic bond auctions to foreign investors later this month in a move designed to help the debt-laden country reduce its borrowing costs and attract more offshore funds to invest. Currently foreign investors are limited to making investments in the country's medium and long-term government debt securities. Sources tell Reuters that the government is also planning to have Book Runners arrange domestic bond auctions in the hope that they will rally local participation and start the process of pushing down yields. Ghana's latest 91-day treasury bill sale on Friday attracted a yield of 25.1801% on Friday, compared to 8.165% for similar paper in Kenya.
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Infrastructure
Greenstone Equity Partners, one of the Middle East's largest fund placement firms, is working with TIMU Energy Holdings, the joint venture collaboration between infrastructure investor Harith General Partners and renewable energy investment firm Jones Pohl, to raise capital from GCC investors for clean energy and natural gas power projects on the continent.
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Private Equity
An interview with Mezuo Nwuneli, the CEO of Sahel Capital Partners which manage the Fund for Agricultural Finance in Nigeria or FAFIN fund. Having held a first close at $34 million recently, the fund is in discussions with various DFIs and institutions to help it achieve a final close of $100 million. Nwuneli discusses the opportunity and shares aspects of the firm's investment strategy with CNBC Africa.
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Private Equity
The Abraaj Group has wasted little time in taking advantage of the vast potential offered by Nigeria's burgeoning consumer market, according to a report in Ventures Africa this week. A review of some of the leading emerging market private equity firm's recent investments in Africa's largest economy and its strategy for the country with one of the world's youngest and fastest-growing populations.
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Private Equity
South Africa's national development finance institution, the Industrial Development (IDC), is adopting a more proactive investment stance to help it meet its investment target of deploying R100 billion (approximately $8 billion) over the next 5 years. BusinessDay reports that it is actively looking for opportunities in the agroprocessing, renewable energy, manufacturing, industrial infrastructure and mining sectors where it can help to start or scale up private businesses. Read more...
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Private Equity
RMB Corvest, a private equity division of South Africa's FirstRand Banking group, is looking to invest between $500 million and R1 billion (approximately $40 million to $80 million) in black-owned companies over the next 12 months. The firm expects to deploy the capital in a number of sectors, including services, healthcare, retail and education, in both existing and new portfolio companies.
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Trends
Interest in Sukuk as financing mechanism gains momentum // zawya.com
While South Africa became the first non-Muslim country in sub-Saharan Africa to issue an islamic bond when it issued a $500 million sukuk last year, a recent report from Standard Chartered finds that a number of the region's countries are looking to issue sukuk as an alternative mechanism to raise funds for some of their key projects. The trend points to the growing interest of sub-Saharan African opportunities to Middle Eastern investors.
Read more...
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Trends
Rencap forecast sees SSA growth slowing // howwemadeitinafrica.com
Emerging markets investment bank Renaissance Capital forecast expects growth to slow in both oil exporting and importing countries in sub-Saharan Africa alike, courtesy of the trifecta of low commodity prices, soft global demand and domestic structural constraints. This article looks at the factors particular to Kenya and Nigeria, where the forecast predicts growth to decelerate to 5% and 3.4% respectively from their forecasts earlier in the year.
Read more...
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Perspectives
Africa's perspective on China's investment on the continent // forbes.com
While levels of Chinese investment in Africa often lead to alarm-raising headlines of how local and western firms are missing out on the opportunities offered by the continent, Steven Kuo, an Africa Analyst at Control Risks, takes an objective look at the relationship between the China and African countries in this contributed article for Forbes.
Read more...
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Perspectives
Challenges for Nigerian PFAs investing in infrastructure // cnbcafrica.com
While Nigeria's pension funds are now able to invest as much as 20% of their assets under management in infrastructure opportunities, they still remain largely invested in fixed income securities. CNBC Africa talks to Opuiyo Oforiokuma, the CEO of ARM-Harith's Infrastructure Investments and Niyi Falase, the CEO of pension fund administrator CrusaderSterling Pensions on the challenges and opportunities of investing pension fund assets in infrastructure projects.
Read more...
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Companies, People & Profiles... |
Profile
Surya Capital's plans for African investments // campdenfb.com
A brief Q&A with Riaz Currimjee, the CEO of East Africa focused private equity firm, Surya Capital. He outlines the firm's plans to build a number of leading platform companies across a few sectors in East Africa, using an approach that combines financial capital, human capital and intellectual capital. The firm plans to deploy approximately $300 million over the next few years.
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CEO for Africa50 Infrastructure Fund
Based in Casablanca, Morocco
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Head of Compliance for SSA at JP Morgan Chase
Based in Johannesburg, South Africa
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Senior Investment Manager at DEG
Based in Accra, Ghana
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SSA Business Development professionals at Natixis
Based in Johannesburg, South Africa
Read more...
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Regional Investment Director for development finance company
Based in Lagos, Nigeria
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Head, Investments at Shell Nigeria Closed PFA
Based in Lagos, Nigeria
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COO at Kenya Markets Trust
Based in Nairobi, Kenya
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Advisor, Power Africa Transactions and Reform Programs
Based in West Africa
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Senior Associate, Principal Credit Investments at CPP
Based in London, UK
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Corporate Development & Strategy for Kenyan FMCG firm
Based in Kenya
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Debt and Equity fundraiser for microfinance company
Based in Johannesburg, South Africa
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Director, Financial Sector Investment in Africa
Based in Johannesburg, South Africa
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Investment Banking Analyst at Goldman Sachs
Based in Johannesburg, South Africa
Read more...
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SuperInvestor Africa | 14-16 September | The Westin, Cape Town
Join 250+ members of the cream of the African private equity industry, including 100+ local and international LPs, to explore the evolving dynamics of LP/GP relationships across the continent. With in-depth analysis from over 100 speakers on LP appetite, fundraising, benchmarking, co-investing, due diligence, global & local LP perspectives and much more.
To enjoy 10% savings, please quote VIP Code FKR2383ACDWB.
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Project Finance for Energy & Infrastructure East Africa
Dar es Salaam, July 22nd to July 23rd, 2015
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Africa Infrastructure and Power Forum
Beijing, October 15th to October 16th, 2015
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Powering Africa: the Finance Options
Cape Town, November 5th to November 6th, 2015
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The Global African Investment Summit
London, December 1st to December 2nd, 2015
Read more...
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We hope you found the digest to be a useful summary of the major happenings in Africa's private capital markets last week. We'd love it if you shared it with colleagues and business partners. They can sign up for free
here.
Best wishes for a productive week - if you have any tips, suggestions, questions or comments, please get in touch.
All the best,
- Allan
Allan Cunningham
Editor & Publisher
AfCD | Africa Capital Digest
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Africa Capital Digest is a product of Rowayton Press
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