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.
Thank you for being a reader and we look forward to continuing to keep you informed on the private capital investment themes, deals and fundraisings in Africa.
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 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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The big dollar stories in Africa's private equity world last week concerned not investments but rather changes in structure and strategy. Three European institutions who have been active investors in the continent's financial services sector for many years announced that they were pooling their existing African assets to create
Arise, $660 million financial services investment platform. Slated to launch in January 2017 once the necessary approvals have been won, the new platform will look to make minority investments in additional companies, expanding the firm's asset base to $1 billion.
FMO, Norfund and
Rabobank are the institutions behind Arise, between them owning stakes in financial services companies in more than 20 countries. It's expected that Portugal's
Banco Montepio will also join the partnership in the near future.
As reported a couple of weeks ago,
Ethos Capital, a special investment vehicle set up by
Ethos Private Equity was planning to list on the Johannesburg Stock Exchange. That happened on Friday last week, following an oversubscribed private placement which raised R1.8 billion or approximately $131 million.
Ethos Capital will act as a seed fund for the other funds managed by Ethos Private Equity, making primary investments in new funds, acquiring the interests of current Limited Partners in existing funds as well as making co-investments alongside the funds. The listing provides retail investors with the opportunity to participate in the returns offered by the private equity asset class, which in Ethos's case have delivered a gross realized IRR of 37.4% over the private equity fund manager's 32-year history.
Deal activity remained on the light side last week.
Sahel Capital is investing an undisclosed amount in a deal for
Dayntee Farms, a commercial poultry farm located in Nigeria's Kwara State. The deal is being transacted by the
Fund for Agricultural Finance in Nigeria or FAFIN, an agribusiness-focused private equity fund which counts a number of Africa-focused institutions and the Nigerian Government among its sponsors. As part of the deal, Sahel Capital's Olumide Lawson and Olaniyi Oladejo will join Dayntee Farm's board of directors.
The fresh capital has been earmarked to fund the expansion of the company's production capacity and tap the growing demand for protein from the West African country's consumer. The transaction marks the third deal for the fund, which us targeting a $55 million final close. Within the past 18 months, FAFIN has invested in two agribusinesses in Nigeria--
L&Z Integrated Farms, an integrated dairy, and
Diamond Pearls Agro Allied, a producer of edible oils.
Investisseurs & Partenaires announced three deals last week for its Afrique Entrepreneurs fund, a 54 million euro vehicle that is now in its last year of investment. The private equity impact investment firm partnered with French development institution
Proparco to invest $2.2 million in
Enko Education, the private school network founded by Cyrille Nkontchou and Eric Pignot. The capital will be used to both fund the operations of its existing schools as well as execute the launch of Enko Education's planned new schools in 2016 and 2017.
Currently, the company has three schools in its portfolio, located in Cameroon, Mozambique and South Africa. Enko Education plans to have opened an additional thirty schools within the next 5 years, primarily in francophone and southern Africa.
I&P's other two deals involve companies who also have pan-African expansion ambitions.
Barajii
produces and commercializes water and locally produced fruit juices packed in bio-degradable bags and PET bottles. While most of the production currently takes place in Burkina Faso, Barajii aims to develop its production and distribution activities in 8 to 10 countries over the next 5 years. And Africa Radio, which is currently under development, plans to be an independent African radio station, developing a suite of news, music and sports programs led by a team of Africa journalists. No terms for either of the two latter deals were disclosed.
In investment company news,
Private Equity International reports that mezzanine debt fund manager
Syntaxis Capital is setting its sights on the African opportunity. The firm is targeting opportunities presented by the funding gap created by the reluctance of local banks to work with small and medium-sized businesses. Syntaxis's Africa initiative will be led by a three-person team, initially investing on a deal-by-deal basis.
A couple of perspective pieces caught our eye last week - in the first,
Old Mutual Alternative Investments chief Paul Boynton discusses why Africa should retain its attraction for private equity investors despite some of the macroeconomic headwinds buffeting the asset class currently. And in the second, Paul Schroder and Ryan Gawrich of law firm
King & Wood Mallesons provide a commentary on the current deal market for mining assets in Africa today where an upswing in M&A activity predicted by some has yet to materialize. While the immediate outlook perhaps remains subdued, they see "a number of bright spots and once in a generation opportunities for those with an eye to the medium and long term."
As always, you can review these and other stories by scrolling down and clicking through to them below.
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Ethos Capital debuts Johannesburg Stock Exchange Image Credit: Ethos Private Equity |
FMO, Norfund, Rabobank combine $660mln assets
A consortium made up of European development finance institutions and lenders are pooling their financial services assets in Africa to create Arise, a $660 million private equity investment company. FMO, Norfund and Rabobank have agreed to combine their stakes in financial services companies in more than 20 countries on the continent, using the new platform as a launch pad to take minority stakes in additional companies in the sector and expand the new company's asset base to more than $1 billion in size. It's anticipated that Banco Montepio, a Portuguese financial group, will join the partnership in the near future.
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Sahel Capital backs Dayntee Farms in undisclosed deal
Sahel Capital is investing an undisclosed amount in a deal for Dayntee Farms, a commercial poultry farm located in Nigeria's Kwara State. The deal is being transacted by the Fund for Agricultural Finance in Nigeria, an agribusiness-focused private equity fund which counts a number of Africa-focused institutions and the Nigerian Government among its sponsors. As part of the deal, Sahel Capital's Olumide Lawson and Olaniyi Oladejo will join Dayntee Farm's board of directors.
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Enko Education lands $2.2mln for Series A
Enko Education, the private school network founded by Cyrille Nkontchou and Eric Pignot, has landed $2.2 million for its Series A round from Proparco, the French development finance institution, and Investisseurs & Partenaires, the Africa-focused private equity impact investment firm. Each investor invested $1.1 million in the equity deal which was announced last week.
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Africa Rainbow Capital mulls AfriNet stake acquisition
A source tells
Bloomberg that African Rainbow Capital, the private equity investment venture set up by billionaire Patrice Motsepe, is in talks with financial services group Alexander Forbes to acquire a stake in its AfriNet unit. The acquisition would be used by African Rainbow Capital to expand its operations outside South Africa.
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I&P takes stakes in Africa Radio and Barajii
Impact investment firm Investisseurs & Partenaires announced two deals last week for its Afrique Entrepreneurs fund, a €54 million vehicle that is now in its last year of investment. No terms for either deal were disclosed.
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This week's issue supported by...
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Ethos Capital debuts on JSE in $131mln IPO
Ethos Capital, the listed special vehicle set up by one of Africa's largest fund managers, Ethos Private Equity, debuted on the Johannesburg Stock Exchange last week having garnered R1.8 billion or approximately $131 million in an oversubscribed private placement.
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AfDB commits $9mln to Sahel's FAFIN
The African Development Bank approved a $9 million equity investment in the Fund for Agricultural Finance in Nigeria. The fund, which is managed by Sahel Capital, held a $34 million close in July last year and counts a number of other development finance institutions among its backers. The fund targets expansion capital opportunities in agricultural SMEs in the West African country.
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Sectors, Trends & Perspectives...
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Mining
Fortune favors the brave in African mining
A commentary on the current deal market for mining assets in Africa today where an upswing in M&A activity predicted by some has yet to materialize. While the immediate outlook perhaps remains subdued, Paul Schroder and Ryan Gawrich of law firm King & Wood Mallesons see "
a number of bright spots and once-in-a-generation opportunities for those with an eye to the medium and long term."
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Perspectives
Africa's fundamentals still drive private equity deals
Writing for
Moneyweb, Old Mutual Alternative Investments chief Paul Boynton discusses why Africa should retain its attraction for private equity investors despite some of the macroeconomic headwinds buffeting the asset class currently.
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Companies, People & Profiles...
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Companies
Syntaxis sets its sights on Africa
Central European-focused mezzanine debt fund manager Syntaxis Capital is reportedly setting its sights on Africa. Private Equity International reported last week that the mezzanine debt fund manager has built a three-person team to spearhead its strategy on the continent, investing initially on a deal-by-deal basis.
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Companies
Perla Global to source deals for $200mln MENA fund
Perla Global Capital Advisors has signed a memorandum of understanding with an unnamed, $200 million North Africa and UAE fund to source private equity deals in the region across a wide range of industries. According to Perla, the fund is allocating 60% of its capital to opportunities in North Africa, with the balanced earmarked for deals in the UAE.
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Chief Financial Officer for leading Private Equity firm
Based in Harare, Zimbabwe
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Associate, Corporate Finance Advisory at MCB Capital Markets
Based in Port Louis, Mauritius
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Senior Manager, Research at AVCA
Based in London, United Kingdom
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Senior or Principal Investment Officer at the IFC
Based in Washington, DC, USA
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Investment Associate, Impact Investments at CDC
Based in London, United Kingdom
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The Global African Investment Summit London
London, November 30th to December 1st, 2016
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The Global African Investment Summit Kigali
Kigali, September 5th to September 6th, 2016
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London, September 14th to September 16th, 2016
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3rd Africa Alternative Investment Intensive
New York, September 19th to September 20th, 2016
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Lagos, September 20th, 2016
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Tanzania Infrastructure & New Energy Investment
Dar es Salaam. September 21st, 2016
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Kenya International Renewable Energy Congress
Nairobi, October 3rd to October 5th, 2016
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8th Africa PPP Conference & Showcase
London, October 24th to October 26th, 2016
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Dubai, October 24th to October 26th, 2016
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Sub-Saharan Africa Power Forum 2016
Dubai, October 26th to October 28th, 2016
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International Islamic Banking Summit Africa
Djibouti, November 2nd to November 3rd, 2016
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Investing in Emerging Markets Summit
Johannesburg, November 16th to November 17th, 2016
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Cape Town, November 29th to December 1st, 2016
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14th Annual African Capital Markets Conference
Cape Town, November 30th to December 1st, 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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