The
weekly roundup of Africa's Private Capital news
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Here's the last weekly wrap of the most interesting Africa-related private equity, infrastructure and venture capital deal stories, market opinion articles and information pieces for the year. As everything winds down for the holiday season, we will be taking a break before returning with our first issue for 2016 on January 4th.
Thanks you being a reader this year, and we look forward to keeping you informed on the private capital investment themes, deals fundraisings in Africa next year.
Best wishes for a happy holiday season from all of us at Africa Capital Digest to you and your colleagues.
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This week's issue supported by...
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The biggest private equity-related news coming out of Africa last week was that
LeapFrog Investments
has landed a $200 million commitment for its funds from the Overseas Private Investment Corporation or
OPIC
, the U.S. Government's development finance institution. The fresh capital makes Leapfrog
the first billion-dollar group dedicated to equity impact investing, and will be used for financial services and healthcare deals in Africa and emerging Asia.
Meanwhile, the Board of Directors at the International Finance Corporation or IFC is considering a commitment of up to $22 million to Metier Capital Growth Fund II, the latest fund being raised by South African private equity fund manager, Metier. The fund, which is targeting almost $200 million, is looking to build a portfolio of 8 to 12 sub-Saharan companies in sectors that look likely to benefit from the continent's growing middle class, the rising investment in the continent's infrastructure services and intra-regional trade.
Actual deals were thin on the ground last week. We did report that Stellar Capital Partners,
the South African investment holding company which counts Christo Wiese among its major backers, has announced it is expanding its stake in Tellumat, the electronics and communications company in which it already half a minority stake. Its spending $10.5 million to acquire the combined 63% stakes owned by Asgard Capital and Makana Components Holdings, thereby raising its stake to 93%.
In portfolio company news, Sun International's $775 million bid for Peermont Group, the rival hotel and casino operator owned by Mineworkers Investment Company and a consortium of management and community trusts hits a bump in the road when South Africa's Competition Commission announced its decision to reject the deal. Sun International is awaiting the report from the Commission before deciding on their next steps. And satellite network provider O3b Networks, which counts Africa-focused Satya Capital and the Development bank of South Africa among its backers announced it has successfully raised an incremental $460 million financing package to support its growth plans. The capital from the financing round will be used to expand the total number of satellites in O3b's constellation from 12 to 20 in response to increasing market demand for high throughput, high performance connectivity. O3b stands for the "Other 3 billion" referring to the people who do not have high speed access to the internet today.
Donald Kaberuka, the former President of the African Development Bank who stepped down in August this year following the completion of two 5-year terms at the helm of one of the continent's largest financial institutions is joining TPG/Satya as a Senior Adviser. The partnership between private equity firms TPG Growth and Satya Capital was announced in June this year and plans to invest up to $1 billion in African opportunities.
And finally this week, an interesting piece from Brookings on China's announcement that it is
tripling its financing commitment to Africa. It provides some interesting context on the pledges in light of China's slowing economic growth and the downturn in Sino-African relations this year.
To read more on these and other stories from the last week, please scroll down for the abstracts and links.
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South Africa's Competition Commission rejects Sun International's $775 million bid for Peermont Group
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Private Equity
LeapFrog earns $200mln commitment from OPIC
LeapFrog Investments has landed $200 million from the Overseas Private Investment Corporation or OPIC, the U.S. Government's development finance institution, bringing commitments to LeapFrog to over $1 billion and making the firm the first billion-dollar group dedicated to equity impact investing. The capital will be used for financial services and healthcare deals in Africa and emerging Asia.
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Private Equity
IFC mulls $22mln commitment to Metier's latest fund
The Board of IFC is scheduled to meet in January to consider making a $22 million investment in Metier Capital Growth Fund II, South African private equity firm Metier's latest fund which is looking to raise up to R3 billion or almost $200 million. The fund will target control or significant minority investments in high growth, middle market companies.
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Private Equity
Stellar Capital raises holding in Tellumat
Stellar Capital is expanding its holding in Tellumat with the purchase of an additional 63% of the company, giving the investment holding company which counts Christo Wiese among its major backers a controlling stake of 93% in the electronics and communications company. Stellar Capital will pay almost $10.5 million for the stakes owned by Asgard Capital and Makana Component Holdings, in a deal which is expected to close by the end of April 2016.
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Venture Capital
WeChat funds tech seed fund with $3mln
WeChat Africa is investing R50 million or $3.1 million in a seed fund to help tech startups in South Africa get off the ground. The mobile app firm will partner with Batstone a tech strategy consultancy, to source and coordinate suitable early stage tech startups for investment. Once companies have been selected, WeChat will support the companies' market entry strategy by providing access to the millions of WeChat users to test and grow new business ideas.
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Private Equity
Cytonn repays $2.1mln note
Cytonn Investments has repaid a KES 220 million or approximately $2.1 million structured real estate loan provided by Taaleritehdas Private Equity, an arm of a Finnish Wealth Management company. The note had been structured at the market rate cost of funds of 18% plus participation in the capital appreciation achieved during the period of the note, delivering the Helsinki-headquartered investor an annualized return of 54%.
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Projects & Portfolio Companies...
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Private Equity
O3b Networks raises $460mln in incremental financing
O3b Networks, a satellite provider operating a satellite network for telecommunications companies, internet service providers, corporations and governments in emerging markets which counts Africa-focused investor Satya Capital and the Development Bank of South Africa among its backers has announced it has raised an additional $460 million financing package to support its growth plans.
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Private Equity
Competition Commission rejects Sun-Peermont deal
In a blow to Sun International's plans, South Africa's Competition Commission has made the recommendation to the Competition Tribunal that the hotel and casino operator's proposed buyout of rival Peermont Group be prohibited. In May this year, Sun bid $775 million to take over Peermont, which was owned by Mineworker's Investment Company and a consortium of management and community trusts.
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Strategies - Private Equity
Old Mutual's decision to back MoreCorp
Following their acquisition of a 70% stake in MoreCorp, the South African Golf and Cycling company, Jacci Myburgh of Old Mutual Private equity gives some of the criteria that motivated the deal despite reports of a contracting market for golf in the USA due to changing incomes and lifestyles.
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This week's issue supported by...
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AfCD's 2016 Guide to sub-Saharan Private Equity
"The must-have reference and planning resource for investors and their advisers exploring the private equity investment opportunity in sub-Saharan Africa."
- Profiles with Names, Emails of each firm's investment professionals
- Details of active funds, preferred deal sizes, regional and sector preferences
- Information on current portfolio companies and projects
- Headquarter and Regional Office contact details
- Expert insight on fund raising, due diligence, execution and exits
- Quick reference indexes of fund managers and portfolio companies by sector
An interesting perspective piece on what response Nigeria's legal and policy institutions should give to private equity's growing interest in the country to ensure that it can be leveraged by the government to achieve some of its strategic infrastructural, social and economic objectives.
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Perspectives
A look at some of the strategies and approaches that private equity firms in Africa have
Following Chinese President Xi Jinping's commitment to triple to country's financing commitment to Africa at the Forum on China-Africa Cooperation held in Johannesburg recently, some context on the pledges in light of China's slowing economic growth and the downturn in Sino-African relations this year.
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Perspectives
Encouraging energy investment in Nigeria
// ft.com
Rematco's Managing Partner, Emmanuel Misghi writes in the Financial Times about what Nigeria's new government needs to do to cement the achievements of the Electric Power Sector Reform Act as well as boost the development of a competitive power sector in the country.
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Perspectives
A look at some of the strategies and approaches that private equity firms in Africa have in place to assess portfolio company management teams and handle recruitment and talent-related activities. Africa Advisory Group's research shows that while there is no universal strategy, several key factors shape a desirable approach.
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Perspectives
Matthew Kofi Ocran, Professor of Economics at the University of the Western Cape, writes about the need for Africa's governments to look to capital markets to fund the amount of capital needed to plug the gap between the level of infrastructure investment required on the continent and the capital provided by traditional and development finance institutions.
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| Companies, People & Profiles... |
Company News
An overview of Grovest, the first venture capital company incorporated under Section12J of South Africa's Income Tax Act. Headquartered in Johannesburg, the fund, which hopes to have raised R100 million by February 2016, is looking to make R5 million to R10 million investments in high impact tech startups, with a particular focus on companies working on mobility and ecommerce, Internet of Things and Smart Sensor Enablement Technologies, Fintech and Cloud and SaaS solutions.
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Company News
Tom Jackson from Disrupt Africa talked to Amber Fowler, a partner at Lagos-based Echo VC which closed its first fund at $22 million in October of 2014, on the firm's approach to investing in startups and the criteria it looks for in potential deals.
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People News
TPG/Satya, the partnership between private equity firms TPG Growth and Satya Capital announced the appointment of Donald Kaberuka as a Senior Adviser. Mr. Kaberuka stepped down from being the President of the African Development Bank in August this year, having served two 5-year terms at the helm of one of the continent's largest financial institutions.
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Chief Strategy Officer at African Development Bank
Based in Abidjan, Côte d'Ivoire
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Vice President for Africa-focused Private Equity firm
Based in London, UK
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Associate, Healthcare Investments at QGIAM
Based in Port Louis, Mauritius
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Graduate Business Analyst at Helios Towers Africa
Based in London, UK
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Investment Director, MEA at Cambridge Associates
Based in London, UK
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Corporate Associate at Norton Rose Fulbright
Based in London, UK
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VP, Transaction Advisory Services at StratLink
Based in Nairobi, Kenya
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Regional Chapter Coordinator, West Africa at ANDE
Based in Accra, Ghana or Lagos, Nigeria
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Division Manager, Capital Markets at African Development Bank
Based in Abidjan, Côte d'Ivoire
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Corporate Finance Transactor at Bowden & Co.
Based in Johannesburg, South Africa
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Corporate Finance role at JSE-listed company
Based in Cape Town, South Africa
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Business Development at Nexus Capital Markets
Based in Johannesburg, South Africa
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New to Africa Capital Digest this week...
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CFO/Financial Controller at Emerging Markets Private Equity firm
Based in London, UK
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Principal for Africa-focused Private Equity firm
Based in London, UK
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Analyst at Emerging Markets Private Equity firm
Based in London, UK
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Portfolio Monitoring for pan-African direct lender
Based in London, UK
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Investing in African Mining Indaba
Cape Town, February 8th to February 11th, 2016
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Washington, DC, January 27th to January 29th, 2016
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Egypt Energy Investment Summit
Cairo, February 16th to February 18th, 2016
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SAVCA's Private Equity in Southern Africa
Stellenbosch, February 17th to February 18th, 2016
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Johannesburg, February 17th to February 19th, 2016
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Johannesburg, February 17th to February 19th, 2016
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Africa Financial Services Investment Conference 2016
London, May 5th to May 6th, 2016
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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
Rowayton, CT 06853, USA
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Copyright © 2014-2015 Rowayton Press, LLC. All Rights Reserved.
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