April 27, 2015 
The  weekly roundup of Africa's Private Capital news


 

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 to sign up here.   
 
As ever, if you'd like to get in touch or share any tips or comments, please contact me  at acunningham@africacapitaldigest.com.  Many thanks for reading.
This week's issue supported by...             
ASPFIF 2015
The week in  brief...

There was a flurry of private equity investment activity in Africa last week, although in each of them both the valuation and the terms of the deals remained undisclosed.


 
Advanced Finance & Investment Group or AFIG Funds has taken a stake in Accra-based real estate developer Primrose Properties through its Atlantic Coast Regional Fund. The capital will help Primrose fund its current pipeline of development projects as well as bring its mixed-use Rhombus development in Kanda to completion. Founded in 2006, Primrose is a special purpose vehicle formed that develops, holds and invests in high-quality real estate assets. According to the firm's website, it counts major oil and gas corporations, foreign multinationals and the diplomatic corps among its clients.

 

Another notable piece of deal news was the announcement that Coast2Coast's consumer goods platform Bounty Brands has acquired 100% of Musgrave Agencies, a designer, importer and distributor of quality apparel brands, from private shareholders in an all-cash dealMusgrave, headquartered in Durban, was founded in 1985 and now has more than 100 employees. It owns the sole license to the Jeep apparel brand in South Africa, which contributes a significant portion of the company's revenues, along with its own outdoor utility brands as well as other complementary brands under license. The transaction creates a significant apparel platform within Bounty, and provides an established distribution network to the market. 


 
Meanwhile it was announced that Verod Capital Management is teaming up with company management to acquire Union Trustees from Union Bank of Nigeria. Terms of the deal were not disclosed. The investment is the third from Verod's second fund. The Lagos-based financial services company is one of the leading corporate trustee and fund management companies in Nigeria, providing trusteeship services, nominee services and fund. 


 
In exit news last week, impact investor Vital Capital announced successful exits from two Angolan infrastructure projects--the Sumbe-Gabela-Waku Kungo electricity transmission project and the Water for All project. The mezzanine financings, originally made in late June 2014 and early July 2014, plus the requisite interest, were returned by the companies executing the projects in one payment earlier this month, yielding an IRR of over 24% for the fund's investors. 


 
Fresh from spending $1 billion last week for an 80% stake in fitness chain Virgin Active, investment firm Brait still has another $2 billion available to spend on deals, according to the firm's largest shareholder Christo Wiese. Bloomberg reports that the firm is seeking businesses in Europe as well as its home market of South Africa that are cash generative and have proven management teams. 


 
Vantage Capital has received commitments of approximately $60 million for its third mezzanine fund from a number of european investors.  DEG, the German DFI is investing $20 million. In an emailed response from Vantage Capital to our questions, additional participants include a major Swiss Bank, a German Family Office and a European Research Foundation. Vantage Mezzanine Fund II is targeting $250 million and is expected to hold the final close later on this year. 


 
Finally, a couple of trend and perspective pieces caught our attention last week. Firstly, the Emerging Markets Private Equity Association, (EMPEA), published a special report on Private Equity in the Middle East and Africa, its first in-depth look at the asset class in the region.  Its data driven analysis gives interesting insight into the fundraising and investment dynamics in the region. And secondly, in an article for Africa Outlook Magazine, Craig Metherell, an analyst with Riscura, lays out the challenges and opportunities presented by public-private partnership models in helping Africa's governments narrow the infrastructure gap.


You can review these and other stories by  scrolling  down and reviewing the headlines, abstracts and links. 
Deal News...
Private Equity
AFIG Funds invests in developer Primrose Properties  // africacapitaldigest.com

Advanced Finance & Investment group or AFIG Funds, the private equity investment firm with $122 million under management, announced an undisclosed investment in Ghanaian real estate development company Primrose Properties last week.  The investment was made through the firm's maiden fund, the Atlantic Coast Regional Fund (ACRF), which targets high-growth companies cross all sectors in 29 countries in West and Central Africa.

Private Equity

Coast2Coast acquires 100% of Musgrave Agencies // africacapitaldigest.com

Coast2Coast's consumer goods platform Bounty Brands announced the acquisition of 100% of Musgrave Agencies, a designer, importer and distributor of quality apparel brands, from private shareholders in an all-cash deal last week.  Terms and valuation of the deal were undisclosed. The transaction creates a significant apparel platform within Bounty, and provides an established distribution network to the market.

Private Equity
Verod Capital in Union Trustees MBO deal  // africacapitaldigest.com

Investment management firm Verod Capital Management is teaming up with company management to acquire Union Trustees from Union Bank of Nigeria. Terms of the deal were not disclosed.  The investment is the third from Verod's second fund.

Private Equity
Vital Capital earns 24%+ IRR on infrastructure exits  // africacapitaldigest.com

Private equity impact investor, Vital Capital, announced successful exits from two Angolan infrastructure projects--the Sumbe-Gabela-Waku Kungo (SGWK) electricity transmission project and the Water for All (WFA) water project. The mezzanine financings, originally made in late June 2014 and early July 2014, plus the requisite interest, were returned by the companies executing the projects in one payment earlier this month, yielding an IRR of over 24% for the fund's investors.

Private Equity
AAY Investments eyes stake in Zim's Tetrad Bank  // theindependent.co.zw

Panama-based venture capital fund, AAY Investments has approached Zimbabwe's Tetrad Investment Bank with a view to acquiring a stake in the embattled financial institution.  To proceed, an application for an extension of the judicial management of the bank would have to be sought from the country's central bank in order for requisite due diligence to take place.

Private Equity
AfricInvest finalizes deal for minority stake in Elephant Group  // thisday.com

Having signed an original memorandum of understanding in March, Nigerian commodities company Elephant Group has finalized a deal which sees private equity firm AfricInvest taking a minority stake in the company. Terms of the deal were not reported.  The capital will be used to help Elephant Group expand its market share and take advantage of opportunities created by the Nigerian government's drive to improve agricultural productivity as well as boost its share in agricultural commodities trading.


Coast2Coast's Bounty Brands acquires Musgrave Agencies, sole licencee of the Jeep apparel brand in South Africa
Image Credit: Kingons
Fund & Financing News...
Private Equity

Brait has $2bln for additional deals // bloomberg.com

Having just spent $1 billion to acquire an 80% stake in fitness chain Virgin Active, investment firm Brait still has an additional $2 billion available to spend on deals, according to the firm's largest shareholder, Christo Wiese. Potential deals are being sourced in Europe as well as South Africa.

Private Equity
Vantage Capital's Fund III attracts $60mln  // africacapitaldigest.com

Currently raising capital for its third mezzanine fund, Vantage Capital announced last week that it has received commitments of approximately $60 million from a number of European financial institutions. DEG, the German DFI is providing $20 million, with the balance being committed by a major Swiss bank, a German family office and a European Research foundation.

Infrastructure
Nigeria's PenCom allocates $25mln to infrastructure projects  // thisday.com

Nigeria's National Pension Commission has published draft investment guidelines indicating that it is planning to commit 5 billion Naira (approximately $25 million) to infrastructure investments.  The guidelines stipulate that at least 60% of the investments should be in infrastructure projects in Nigeria itself.

Exclusive reader offer...             
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 Advisers; develop clients, transaction ideas and more
  Contact Teresa Hall at thall@africacapitaldigest.com   to reserve your copy today.

Projects & Portfolio Companies...
Private Equity
Bain in re-financing talks with Edcon's creditors  // bloomberg.com

Bain Capital, owners of struggling Edcon Holdings, is in talks with the South African retailers largest note holders about refinancing the company's debt, sources tell Bloomberg. Under current terms, Edcon, which has posted twelve consecutive quarterly losses, faces the prospect of making significant debt repayments beginning in 2016. Restructuring the multi-jurisdictional debt is complex and may take several months.

Read more...

Sectors & Strategies...
Mining
X2 chief will be cautious about investing in coal, Africa  // mining.com

At the FT Commodities Global Summit held in Lausanne last week, X2 Founder Mick Davis suggested investors should steer clear of coal investments as he does not expect to see an improvement in the depressed sector until at least 2016.  He also urged caution over resource investments in Africa given weak energy and infrastructure frameworks.

Infrastructure
Angola, despite weak oil price, seeks $10bln for infrastructure  // ft.com

Nairobi's Kenyatta National Hospital is looking to raise $181 million from private sector investors to help fund the construction of a 600-bed paediatric hospital. The Public-Private partnership proposed by the hospital will allow the private sector investors to operate the hospital and collect 60% of the profits generated before transitioning the asset back to the Kenyatta National Hospital.

Healthcare
Kenyatta National Hospital seeks $181 million in PPP  // ventures-africa.com

Nairobi's Kenyatta National Hospital is looking to raise $181 million from private sector investors to help fund the construction of a 600-bed paediatric hospital. The Public-Private partnership proposed by the hospital will allow the private sector investors to operate the hospital and collect 60% of the profits generated before transitioning the asset back to the Kenyatta National Hospital.

Trends & Perspectives...
Trends
EMPEA publishes new report on private equity in MENA  // empea.org

Last week saw the publication of EMPEA's special report on Private Equity in the Middle East and North Africa, the industry association's first in-depth look at the asset class in the region.  The report gives the latest data-driven analysis on the fundraising and investment dynamics for the region.

Perspectives - PPPs
In praise of PPPs for Africa and how to make them work  // africaoutlookmag.com

Perspective from Riscura's Craig Metherell in Africa Outlook Magazine on the opportunities and challenges presented by public-private partnership models in helping African governments narrow the infrastructure investment gap.  Markets are actively shifting towards PPPs, providing private equity firms with opportunities to diversify their portfolios and access long-term returns.

Read more...

Perspectives - Venture Capital
Landing venture financing difficult in underdeveloped ecosystem  // itweb.co.za

Underdeveloped angel networks are crimping the flow of seed capital to startups in South Africa, forcing entrepreneurs to bootstrap their ideas or head overseas in order to raise capital. For this trend to change, local funding sources should look at valuations in a different light and become less risk-averse, according to this piece.

Perspectives - Venture Capital
Jovago.com's Zmyslowski on boosting West Africa's startups // pulse.ng 

A blog post from Marek Zmyslowski, the Co-Founder of Rocket Internet-backed Jovago.com, on what factors act as a drag on the success of West Africa's startups and what needs to change in order to boost the numbers of successful status in the region.

Read more...

Companies, People & Profiles...
People News
Webber Wentzel buttresses M&A practice with 3 hires  // africacapitaldigest.com

South African law firm Webber Wentzel has persuaded 3 senior M&A lawyers to join its corporate and M&A practice.  Gareth Driver and Huneiza Goolam join Webber Wentzel from Werksmans Attorneys while Adam Ismail, who will join the firm's Cape Town team, joins Webber Wentzel from ENSafrica. The move is part of the firm's strategic move to cement Webber Wentzel's position as the dominant South African commercial law firm.

People News
James Formby appointed investment banking CEO at RMB  // bdlive.co.za

James Formby has been named as the new CEO of RMB, FirstRand's investment banking unit, replacing Alan Pullinger who moves to become FirstRand's deputy CEO, starting in September this year once Sizwe Nxasana steps down from his position as FirstRand's CEO to pursue other interests. Formby takes up his new role immediately to facilitate a smooth transition.

Read more...

People News
Wragge moves Jonathan Brufal to Dubai  // africacapitaldigest.com

Jonathan Brufal, who joined Wragge Lawrence Graham & Co. from Norton Rose Fulbright in 2012, is returning to the UAE as an energy and infrastructure partner to focus on the needs of clients in the GCC and Africa.  He had previously led Norton Rose Fulbright's infrastructure practice in Abu Dhabi.

Read more...

Company News
Breakaway investment group Cytonn's CEO on firm's outlook  // cnbcafrica.com

Edwin Dande, CEO of Cytonn, the investment and advisory group founded last year by four colleagues who had worked together at Britam, talked to CNBCAfrica last week about the firm's focus, its current state of development and its strategy to build a leading real estate and private equity investment business in the East African region.

Read more...

Current Job Postings...
Highlighted Jobs...             
Head, Corporate Finance for Investment Bank Advisory 

Based in Johannesburg, South Africa

Read more...

Head of Compliance for sub-Saharan Africa 

Based in Johannesburg, South Africa

Read more...

Associate Analyst, Africa at Ashmore  

Based in Washington, DC, USA

Read more...

New to AfCD this week...
Head of Corporate Finance, South African and Africa 

Based in South Africa

Read more...

Business Development professionals for Nexus Capital Markets 

Based in Johannesburg, South Africa

Read more...

Pan-Africa Private Equity Associate 

Based in Johannesburg, South Africa

Read more...

Principal Investment Officer for DBSA 

Based in Gauteng, South Africa

Read more...

Investment Specialist at GroFin 

Based in Gauteng, South Africa

Read more...

Senior Private Equity professional for Tanzanian fund; 

Based in Dar es Salaam, Tanzania or Johannesburg, South Africa

Read more...

Upcoming Conferences...
Highlighted Event...             
TMT Finance & Investment Africa 2015 

London, June 23rd, 2015 

Read more...

12th Annual AVCA Conference  

London, April 27th to April 29th, 2015 

Read more...

Global Private Equity Conference  

Washington, DC, May 11th to May 14th, 2015 

Read more...

Africa Financial Services Investment Conference 

Brighton, May 12th to May 15th, 2015 

Read more...

CEO Infrastructure Investment Summit 

Cape Town, June 3rd, 2015 

Read more...

Africa Pensions & Sovereign Funds Investment Forum 

New York, June 8th to June 12th, 2015 

Read more...

The Global African Investment Summit 

London, December 1st to December 2nd, 2015 

Read more...

And finally...
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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