The
weekly roundup of Africa's Private Capital news
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Here's the latest weekly wrap of the most interesting Africa-related private equity, infrastructure and venture capital deal stories, market opinion articles and information pieces.
Thanks you being a reader and we look forward to continuing to keep you informed on the private capital investment themes, deals and fundraisings in Africa.
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As always, if you have any tips, suggestions or questions, please reach out to Allan Cunningham at
[email protected]
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This week's issue supported by...
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It was Africa's energy sector that proved to be the major beneficiary of private equity investment activity last week with the news that
Seven Energy, a Nigerian oil and gas company, received $100 million in equity capital from a number of its existing investors as well as the Islamic Development Bank's Infrastructure Fund II, a $2 billion private equity infrastructure fund managed by Bahrain-based
ASMA Capital.
IDB Fund II is investing $50 million in the deal while the balance is being provided by a group of the Nigerian company's existing shareholders including
Temasek, Petrofac, Capital International Private Equity, Standard Chartered, the
International Finance Corporation and the IFC's Africa, Latin American and Caribbean Fund. The firm is going to use fresh capital to boost its liquidity as it completes work on a gas pipeline that will integrate its existing pipeline network in the south east of Nigeria.
Staying in West Africa, private equity firm
African Capital Alliance is acquiring a significant minority stake in publicly-listed Continental Reinsurance for an undisclosed amount. The investment is being made through Capital Alliance Private Equity IV, ACA's most recent fund, which is reportedly targeting a final close of $600 million and is being backed by, among others, the
New York State Common Retirement Fund.
Development Partners International or DPI is on the verge of closing its first deal in Egypt, according to South Africa's
Business Day. The deal will be in the retail sector and will be made through DPI's latest fund, the $750 million African Development Partners Fund II which was the third largest Africa-focused private equity fund to close last year. Once the transaction is complete, the fund will have approximately 60% or $450 million of its committed capital remaining for other deals.
On the fundraising front, sources told
Dow Jones LBO Wire that
Kuramo Capital Management has garnered a combined $140 million in commitments for its second Africa-focused fund of funds and a companion co-investment vehicle last week. Ultimately the New York-headquartered firm is targeting a combined total of $250 million for both vehicles and anticipates holding a final close between April and June this year.
In South Africa, well-known venture capital firm
Knife Capital has become the latest firm to establish a 12J Venture Capital Company with the launch of
KNF Ventures. The firm's goal is to raise R100 million or $65 million to invest and has delivering investors annualized returns of 40% or more as a target. 12J Venture Capital Companies take advantage of a South African Government-implemented tax incentive designed to help the country's SMEs with access to equity finance by encouraging more investment in privately-owned entrepreneurial businesses. Individuals, companies and trusts investing through approved section 12J venture capital companies can deduct the full amount of their investment from taxable income.
And finally this week,
LeapFrog Investments is pushing ahead with its initiative to expand its investment activities into the healthcare sector and has appointed Felix Olale, an entrepreneur as well as a physician-scientist, as a Partner and Lead for the impact investment firm's healthcare deals in Africa. He'll have Matthew Myers, a Director and Tom Verghese, an Associate Director, working with him and playing, what the firm describes as being "pivotal" roles in LeapFrog's healthcare investments strategy in Africa.
To read more on these and other stories from the last week, please scroll down for the abstracts and links.
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Seven Energy lands $100mln in equity capital from investor group
Image Credit: Seven Energy
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Private Equity
Investors back Seven Energy with an extra $100mln
Seven Energy, the Nigerian Oil and Gas company which counts
several private equity, sovereign wealth and DFI
funds among its investors, has landed an additional $100 million in equity capital from some of its existing investors as well as the Islamic Development Bank's Infrastructure Fund II, a $2 billion private equity infrastructure fund managed by Bahrain-based ASMA Capital. As part of the deal, ASMA's CEO, Stephen Vineburg, joins Seven Energy's Board of Directors.
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Private Equity
ACA buys 49% stake in Continental Re
French insurance group AXA is spending approximately $84 million for an 8% stake in Africa Internet Group, the owner of several e-ventures, including Jumia, the continent's largest online retailer, in a deal that reportedly values AIG at over $1 billion. As part of the deal, AXA will have exclusive rights to market its products through AIG's portfolio of online and mobile consumer companies.
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Private Equity
African Alpha backs equipment financer SERS
African Alpha Investment Partners announced last week that it is backing Mauritius-based SERS Ltd, an equipment finance company. The debt transaction fulfills two goals; a partial re-finance of a debt financing the two parties concluded in October 2014, extending maturities and lowering SERS's borrowing costs as well as providing fresh capital for new equipment purchases. Additional terms of the deal were not disclosed.
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Funds & Fundraising News...
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Kuramo's second fund of funds holds $140mln close
New York-headquartered Kuramo Capital Management has garnered a combined $140 million in commitments for its second Africa-focused fund of funds and a companion co-investment vehicle, Dow Jones LBO Wire reported sources as saying last week. Kuramo is ultimately targeting a total of $250 million for both funds and expects to hold a final close between April and June this year.
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Venture Capital
Knife Capital launches R100m 12J VC company
High-profile South African venture capital firm, Knife Capital, has become the latest firm to establish a 12J Venture Capital Company with the launch of KNF Ventures. The firm's goal is to raise R100 million or $65 million to invest in innovation-driven startups which show significant potential to scale, thereby delivering investors annualized returns of 40% or more. The minimum commitment threshold for investor participation is being set at R1 million.
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Projects & Portfolio Companies...
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Middle East Glass acquires control of Egypt's Misr Glass
One of Gulf Capital's portfolio companies, Middle East Glass, has acquired ownership of Misr Glass Manufacturing, an Egyptian company that specializes in the manufacture of container glass for the food and beverage industry. Terms of the deal were not disclosed, but the transaction creates the MENA region's largest glass packaging concern, with a client list that includes a number of the world's largest brands including Coca-Cola, Nestlé and Pepsi as well as other major domestic and regional beverage producers.
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Consumer
DPI on verge of first Egyptian deal
Development Partners International (DPI) is on the verge of closing its first Egyptian deal according South Africa's Business Day. The investment, which is in the retailing sector, will be made through DPI's $750 million African Development Partners Fund II which closed last year. Once the transaction has been completed, the fund will have approximately 60% or $450 million of its committed capital remaining for other deals.
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Real Estate
Taaleri increases commitment to real estate through Cytonn
Finnish wealth management firm, Taaleri, is looking to significantly expand its private equity allocation to Kenyan investment company, Cytonn Investments, to invest in additional real estate projects in Kenya. The amount of additional capital, which was not disclosed, will be deployed through Cytonn Real Estate, which now has a pipeline of potential projects worth some $550 million. To date, Taaleri has invested approximately $20 million in Cytonn's real estate developments.
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Trends
Early signs 2016 could be bumper year for South African VC
In a strong showing, South African start-ups landed $54.5 million in capital from venture investors last year, making 2015 a very good year for startup funding. Early signs are that 2016 could be even stronger, with new fund formation activity levels in the first two months of the year raising hopes that the trend will continue.
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Perspectives
Investment hotspots continue to shine in Africa
While some African economies continue to reel from the ill-effects of the collapse in commodity prices, growth remains robust in a number of cities across the continent, providing investors with some potential investment hotspots. Sectors such as construction, financial services, retail and technology are all prospering, presenting investors with compelling opportunities and allowing them to readjust their strategies to focus on potential deals at the city level rather than at the country or continent level.
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Companies, People & Profiles...
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People
Olale to head up Africa Healthcare team at LeapFrog
Having landed $200 million from the Overseas Private Investment Corporation or OPIC, the U.S. Government's development finance institution,
in December last year, LeapFrog Investments is pushing ahead with its initiative to expand its investment activities into the healthcare sector in Africa and Asia. Felix Olale, an entrepreneur as well as a physician-scientist, is joining LeapFrog Investments as a Partner and will lead the impact investment firm's healthcare deals in Africa.
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People
Rotich joins Africa Technology Ventures
Juliana Rotich, the co-founder of Kenyan companies Ushahidi and BRCK has joined Africa Technology Ventures as a venture partner. The venture capital firm, which is currently raising a $50 million fund, will target tech-enabled startups in a variety of sectors including Agriculture, Consumer, Education, Energy, Financial Services and Healthcare in East African and Nigeria.
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Profile
A typical day for Silvertree Capital's Koser
As part of "A Day in the Life of..." series profiling various professionals in South Africa's venture capital industry, Ventureburn spends a day with one of Silvertree Capital's founding partner, Manuel Koser. Before founding Silvertree Capital, Koser founded and led South Africa's online fashion ecommerce site Zando, and helped launch Jumia in Nigeria.
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Investment Associate at Enko Capital
Based in Johannesburg, South Africa
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Associate for South African Private Equity firm
Based in Johannesburg, South Africa
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Private Equity Compliance and Governance Officer
Based in Port Louis, Mauritius
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VP, Business Development for Silvertree Capital startup
Based in Cape Town, South Africa
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Senior Project & infrastructure Finance Officer at PTA Bank
Based in Nairobi, Kenya
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Senior Analyst at Open Capital Advisors
Based in Nairobi, Kenya
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Associate for Africa-focused Private Equity firm
Based in London, United Kingdom
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Corporate Finance Partner for Law firm's Africa practice
Based in London, United Kingdom
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Law Associate, M&A and Private Equity, Africa & Emerging Markets
Based in London, United Kingdom
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Investment Associate, Africa Funds at CDC
Based in London, United Kingdom
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Investment Analyst at Enko Capital
Based in Johannesburg, South Africa
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13th Annual AVCA Conference
Addis Ababa, April 25th to April 27th, 2016
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Africa's Investment Prospects - The 2016 Annual Debate
London, April 20th, 2016
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Southern Africa Energy & Infrastructure Summit
Maputo, May 4th to May 6th, 2016
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Africa Financial Services Investment Conference 2016
London, May 5th to May 6th, 2016
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18th Annual Africa Energy Forum
London, June 21st to June 24th, 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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