The
weekly roundup of Africa's Private Capital news
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Here's this week's wrap of the most interesting Africa-related private equity, infrastructure and venture capital deal stories, market opinion articles and information pieces for our review. Thank you for being a reader and we hope you continue to find the newsletter useful.
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This week's issue supported by...
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Last week saw The Abraaj Group realize two Africa-related private equity exits. The first, Saham Finances, was sold to two organizations; Sanlam Group, the South African financial services company and Saham Group, a Moroccan conglomerate and Saham Finances parent company. Saham Finances parent company. The IFC and the IFC Africa, Latin America and Caribbean Fund (ALAC Fund) exited their stakes alongside Abraaj, providing the acquirers the opportunity to buy a combined 37.5% stake in Saham Finances. Since investing in the company in 2012, Abraaj and the IFC have helped Saham
to become one of the largest pan-African insurance groups, currently operating 31 insurance and reinsurance subsidiaries in 26 countries on the continent and the Middle East. The company is now the market leader in most of the countries it operates in, with a network of over 650 branches, a staff complement of more than 3000 people, and a consolidated turnover of over $1 billion. Bloomberg reports that Sanlam is paying $375 million for the 30% it is acquiring, making it one of the larger private equity exits of the year.
For its second exit, American private equity firms Warburg Pincus and General Atlantic have agreed to acquire Abraaj's 49% stake in Network International, a payment processor with operations in the Middle East and Africa. Terms of the deal were not disclosed. Abraaj originally invested in the firm in 2011, and
supported the company's growth by augmenting its senior management team, by helping product and geographic diversification and by facilitating greater market access to the sub-Saharan region.
The deal is expected to close once regulatory approval has been given.
Meanwhile, in other deal news, Old Mutual Alternative Investments has reached an agreement to acquire the 50% of African Infrastructure Investment Managers that it does not already own from joint venture partner Macquarie Infrastructure and Real Assets. Once again, terms of the deal were not disclosed. AIIM was established in 2000 as a 50/50 joint venture between the two companies, and since then has developed into one of Africa's leading infrastructure investment managers with over $1 billion under management across five infrastructure funds.
AIIM is expected to continue to operate as an autonomous business, sourcing and executing deals from its offices in South Africa, Kenya and Nigeria.
In another financial services sector deal last week, private equity firm Actis announced that it is spending $62 million to acquire a majority stake in partnership with the CEO and management of Sigma Pensions, a Pension Fund Administrator (PFA) in Nigeria. Neither the size of the stake nor valuation terms of the deal were disclosed. Sigma was founded in 2004 and, working from 11 offices and 32 service centers, currently has over 650,000 customers. To date, Actis has invested more than $570 million into opportunities in Africa's financial services sector.
The private equity firm sees significant potential in the continent's asset management industry, as a young, growing population start to save and invest for the future.
In fundraising news last week, Novastar Ventures announced that it had held the final close for Novastar Ventures East Africa Fund I at $80 million at the end of September with a commitment from FISEA, an investment fund advised by PROPARCO, the French development finance institution. The fund, which was launched in 2013, has already backed eight businesses, all of which demonstrate the characteristics favored by the fund-mass-market scale potential, business model innovation and entrepreneurial leadership. By meeting proven demand for basic goods and services, with innovative business models that widen access, improve quality and lower the cost of basic goods and services, the fund aims to achieve positive social impact as the result of its portfolio companies' commercial success.
Keep an eye out for more exits by Abraaj in the coming months. The National reports that the $9 billion private equity firm anticipates exiting between 12 and 20 investments in its fund portfolios annually with 50% of them being in the Middle East and Africa. It plans to make similar numbers of acquisitions in the same time frame.
You may have heard of Investec's plan to reduce its exposure to the private equity asset class by unbundling Investec Principal Investments and establishing Investec Equity Partners. Business Day provides us with more information about the plan in an article last week. Apparently, the plan would still leave the investment bank managing R3.7 billion (approximately $257 million) in direct investments, while the balance of the assets, worth some R3.7 billion (approximately $520 million) would be transferred to the new entity.
To read more on these and other stories from the last week, please scroll down for the abstracts and links.
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Actis takes a $62 million stake in Nigeria's Sigma Pensions
Image Credit: Sigma Pensions
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Private Equity
IFC, Abraaj sell Saham Finances stakes
IFC, the IFC African, Latin American and Caribbean (ALAC) Fund and The Abraaj Group have exited their combined 37.5% stake in insurer Saham Finances to Sanlam Group, the South African financial services company and Saham Group, a Moroccan conglomerate and the parent company of Saham Finances. Sanlam is acquiring 30% of the company for $375 million according to
Bloomberg, with Saham Group acquiring the balance of 7.5%. No additional terms of the deal were reported.
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Infrastructure
Old Mutual acquires full control of AIIM
Old Mutual Alternative Investments has reached an agreement to acquire the 50% of African Infrastructure Investment Managers that it does not already own from joint venture partner Macquarie Infrastructure and Real Assets in an undisclosed deal. AIIM was established in 2000 as a 50/50 joint venture between the two companies, and since then has developed into one of Africa's leading infrastructure investment managers with over $1 billion under management across five infrastructure funds.
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Private Equity
Abraaj exits 49% Network International stake
The Abraaj Group has exited its 49% stake in Network International, the Middle East and Africa payments processing firm in which it first invested in March 2011, in a sale to Warburg Pincus and General Atlantic. Existing investor Emirates NBD will retain its 51% stake. Terms of the deal were undisclosed.
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Private Equity
Actis acquires $62mln stake on Sigma Pensions
Actis, the leading emerging markets private equity investment manager is spending $62 million to acquire a majority stake in partnership with the CEO and management of Sigma Pensions, a Pension Fund Administrator (PFA) in Nigeria. Neither the size of the stake nor valuation terms of the deal were disclosed. Sigma was founded in 2004 and, working from 11 offices and 32 service centers, currently has over 650,000 customers. The private equity fund manager plans to help further expand the business, combining the capital with its asset management and distribution expertise.
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Private Equity
Genesis Capital takes lead in €15mln private placement
Genesis Capital Partners, the investment manager with investments in Australia, South Africa, the USA and the UK, has led a €15 million private placement transaction for shares in Pefaco International, a Malta Stock Exchange-quoted company in the Leisure and Gaming industry in West Africa. The offering was priced at €2.23 per share, valuing Pefaco at €50 million and giving Genesis a 30% stake in the company.
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Venture Capital
EAV backs Off-Grid Electric Series C round with $2mln
Energy Access Ventures announced its participation in the $25 million Series C round in Off-Grid Electric,
a micro-solar leasing platform which operates as M-Power in Tanzania. The impact-focused venture firm has agreed to commit $2 million as part of the Series C round led by DBL Partners and a consortium of new and returning investors which included SolarCity, Omidyar Network, Serious Change LP, Western Technology Investment, Vulcan Capital and Tope Lawani, the founder of Africa-focused private equity firm Helios Investment Partners.
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Funds & Fundraising news...
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Private Equity
Novastar holds $80mln final close for first fund
Novastar Ventures announced last week that it had held the final close for Novastar Ventures East Africa Fund I at $80 million at the end of September with a commitment from FISEA, an investment fund advised by PROPARCO, the French development finance institution. Other partners who had already made commitments to the fund, which was launched in 2013, include fellow European DFIs CDC, FMO, Norfund and the European Investment Bank, as well as private institutions J.P. Morgan, AXA Investment Management and Triodos Bank.
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Credit
IFC raises $71mln Green Bond issued in rand
The IFC has raised approximately $71 million for climate-friendly investment in emerging markets by issuing its first Green Bond denominated in South African Rand. FirstRand Bank is the anchor investor in the Bond, which has a maturity date of December 10th, 2024 and offers at yield of 8.72%.
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Private Equity
STANLIB's Kenyan REIT oversubscribed
STANLIB Fahari I-REIT, East Africa's first Income Real Estate Investment Trust, has raised KES3.6 billion or approximately $35 million in an oversubscribed placement, beating the KES2.6 billion it sought. East African institutional investors acquired 58% of the offer, foreign institutional investors acquired 25% of the offer with the balance being acquired by retail investors in East Africa. The proceeds will be used to acquire seed properties and pay set up costs, with the rest being invested in income generating properties where 80% of rental income is payable to shareholders twice a year.
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Sovereign Wealth
Nigeria makes $250mln contribution to country's SWF
In its first commitment in over a year, Nigeria announced that it is injecting $250 million into the Nigeria Sovereign Investment Authority, the country's sovereign wealth fund, as government savings improved despite the slump in oil prices. The wealth fund had not received any fresh funds since the country's previous government injected $1 billion in 2014.
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This week's issue supported by...
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Projects & Portfolio Companies...
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Private Equity
NewAge and Genel explore potential merger
NewAge, an Africa-focused oil exploration and development company owned by a consortium of private investors that include Wall Street investment manager Och-Ziff Capital Management, oil trader Vitol and an undisclosed group of sovereign wealth funds is reportedly in merger talks with Genel Energy, a London-listed firm headed up by former BP boss, Tony Hayward. Genel's oil production is predominantly focused on Kurdish Iraq, but it has a string of assets in Somaliland, Morocco, Côte d'Ivoire and elsewhere in Africa.
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Strategies - Private Equity
Private Equity investors beat a path to Nigeria
Nigeria continues to attract private equity investors, eager for the chance to tap into the opportunities presented by targets serving a young, quickly-growing population. According to data from the African Private Equity and Venture Capital Association, by September this year, the country had accounted for some 22% of all private equity deal activity on the continent, up from an average of 15% over the prior four years. Among the country's private equity fans, the promise of low valuations and hidden gems make up for the fall in the country's GDP following the oil price slump.
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Strategies - Private Equity exits
Abraaj targets up 10 exits per year from MEA region
Having announced two exits in the last week, emerging markets private equity firm The Abraaj Group is planning to exit between 12 and 20 of its investments every year, with some 50% of those coming from the Middle East and Africa. At the same time, the firm, which manages some $9 billion, plans an equal number of investments globally.
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Sectors - Impact Investing
Impact investing to reflect Family Office values
In a recent study conducted by wealth manager, U.S. Trust, some 30% of the respondents either own or are interested in owning social-impact assets. This piece from
Barrons looks at how three families got their portfolios to profitably reflect their values.
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Sectors - Agribusiness
1K1V looks for more deals in sub-Saharan Agriculture sector
One Thousand & One Voices or 1K1V is on the hunt for additional agriculture deals in sub-Saharan Africa. Having done two agribusiness deals to date, RedSun Dried Fruit and Nuts and Beefmaster, the $300 million fund is currently looking at another potential investment in the sector. The firm targets deals between $10 million to $14 million in size, in companies that are capable of generating $2 million in EBITDA.
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Perspectives
Significant potential for smaller buyouts in East and West Africa
// bdlive.co.za
John Bellew, who recently moved to head the private equity practice at South African law firm Bowman Gilfillan, sees significant potential for investors to do small and mid-sized transactions in the $10 million to $50 million range in East and West Africa. While large amounts of capital chase bigger deals in both regions, there are middle market opportunities with good family-owned businesses where the ability to add and realize value is considerable.
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Africa's Bourses face significant challenges to improve their performance and attract more companies and investors to participate and trade their markets. At last week's Africa Securities Exchange Association Conference which took place in Johannesburg, delegates discussed what they needed to do differently to boost their relevance to Africa' private sector.
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| Companies, People & Profiles... |
Company News
Investec to spin out alternative investments in new vehicle
// bdlive.co.za
Investec's plan to reduce its exposure to the private equity asset class by unbundling Investec Principal Investments to establish Investec Equity Partners would still leave it managing R3.7 billion (approximately $257 million) in direct investments. The plan, which needs to secure regulatory approval, would see R7.5 billion in assets (approximately $520 million) transferred to the new entity, in which Investec will retain a 45% stake.
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Company News
ENSafrica announced that it is merging with Ghanaian law firm Oxford & Beaumont Solicitors, further expanding its presence in the rest of sub-Saharan Africa. ENSafrica|Ghana, as the newly merged firm will be called, begins operations on December 1st. As well as its home base in South Africa, ENSafrica now has offices in Ghana, Mauritius, Namibia, Rwanda, Tanzania and Uganda, fielding a team of more than 600 practitioners.
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CFO for Africa-focused Private Equity fund
Based in London, UK
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Principal or Senior Investment 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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Senior Manager, Agriculture Investments at QGIAM
Based in Port Louis, Mauritius
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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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Investment Associate at TLG Capital
Based in London, UK
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Chief Strategy Officer at African Development Bank
Based in Abidjan, Côte d'Ivoire
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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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SAVCA's Private Equity in Southern Africa
Stellenbosch, February 17th to February 18th, 2016
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TMT Finance & Investment World 2015
London, December 1st, 2015
Read more...
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The Global African Investment Summit
London, December 1st to December 2nd, 2015
Read more...
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Accra, December 1st to December 3rd, 2015
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Dar es Salaam, December 3rd to December 4th, 2015
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Washington, DC, January 27th to January 29th, 2016
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Investing in African Mining Indaba
Cape Town, February 8th to February 11th, 2016
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Egypt Energy Investment Summit
Cairo, February 16th to February 18th, 2016
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Johannesburg, February 17th to February 19th, 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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