Monday, March 13, 2017 03:45 PM / Africa Capital Digest
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 on the private capital investment themes, deals and fund raises in Africa.
The Week In Brief
Fundraising news for Africa-focused or Africa-related private equity funds attracted a lot of attention last week. But then, so did news of a maiden African investment by a significant US-based private equity firm. Compared to the previous couple of weeks, there was a lot of activity to report.
Let's start with the private equity firm and its maiden Africa investment. The firm in question is TA Associates, a global growth investor headquartered in Boston which announced it has acquired a minority stake in Interswitch, the Nigerian digital payments company, from Helios Investment Partners in an undisclosed deal. Founded in 2002, Interswitch enjoys significant market share in Nigeria, owning and operating Verve, the country's principal domestic credit card scheme, and serving as a third-party transaction processor for many of the country's largest banks.
On to fund raising, there was one launch announcement and three significant closes last week. The launch announcement sees Mediterrania Capital Partners kick off fund raising for its third fund, looking to raise €250 million to invest in companies in North Africa as well as a select number of sub-Saharan countries. MCP III is a significantly larger fund than either of its two predecessors and is targeting an IRR in excess of 25%.
The biggest fund close of the week came from Actis who managed to hit the $2.75 billion hardcap for its fourth energy fund in record time. The fund, which was significantly oversubscribed, will invest in select countries in Latin America, Africa and Asia, building four regional platforms, one of which, Azura, has a pan-African focus. Much larger than its predecessor fund, Actis Energy 4 was raised by the firm's in-house team, with a number of sizeable reups as well as new commitments.
In the other fund close story of the week, Apis Partners, a private equity manager that targets growth capital opportunities in financial services companies in Africa and Asia, announced the final close for their first fund, handily beating their $250 million target with $287 million in commitments. Apis Growth Fund I will target investments that need between $20 million and $40 million of capital has already deployed $130 million in capital in 5 deals since it held its first close in August 2015. It expects to add another 5 investments to the fund's portfolio over the next couple of years.
For the smaller end of the deal spectrum, the Accion Frontier Inclusion Fund, managed by Quona Capital, announced that it has received commitments totaling $141 million for its final close. The fund will target investments in small, innovative companies that aim to provide financial services to underserved consumers and businesses.
In other deal news, an investor consortium made up of CDC, the IFC, Maris Capital and Mbuyu Capital Partners are jointly investing $48 million in Africa Logistic Properties, a newly-established developer and manager of Grade A warehousing. In committing $25 million to the deal, CDC is providing the lion's share of the investment.
Sea Harvest, the South African fishing company majority-owned by Brimstone Investments, is looking to raise up to $100 million by floating 38.7% of its share capital on the Johannesburg Stock Exchange. The date of the listing has been set for March 23rd. The firm will use the proceeds to pay down debt and fund the its acquisition strategy as it seeks to become a global diversified seafood business. Following the listing, Brimstone still plans to retain a majority stake in the company.
Making its fourth investment on behalf of the Fund for Agriculture Finance in Nigeria or FAFIN, Sahel Capital is teaming up with CardinalStone Capital Advisers to acquire an undisclosed stake in Crest Agro Products, an integrated cassava processor. The capital will be used to support the establishment of the company's starch processing facility as well as help expand its farming activities.
Heading North East to Egypt, the African Finance Corporation is backing Carbon Holdings, a privately-held Egyptian petrochemicals company, with $25 million in a quasi-equity deal. The capital, which is being invested alongside capital commitments from the IFC and Gulf Capital, will be used by Carbon Holdings to expand its operations.
There were a couple of other DFI-related items last week. Once again, Africa Finance Corporation featured, announcing the successful $350 million financial close for an 80MW peat-to-power project in Rwanda's Gisagara district. AFC is the Mandated Lead Arranger for the project's debt, which was also supported by Finnfund, Afreximbank and others. And DEG, the German DFI announced a $7.6 million investment in Retailability, a retailer of low price fashion clothing and footwear to a young customer demographic, with a chain of 200 stores in Southern Africa.
Finally, some interesting perspective was on offer in other publications. Euromoney finds that a lack of fintech innovation and funding coming into the continent to support a sustained level of fintech growth is forcing Africa's banks and telcos to play a much bigger role in the development of technologies than in the US and Europe.
And Africa's economics and changing consumer patterns are fueling considerable interest in real estate investment opportunities from many European institutional investors, but not all. Investments & Pensions Europe takes a look at this market, its opportunities and challenges.
1. Private Equity Emerging Market Review for WE 040217, AFC Backs Alufer Mining in $205m Deal
2. AFC raises $150mln maiden Sukuk and Other Private Equity News
3. Financing Innovation in Africa: The Last Middle
4. Privatisation in MENA: The Pitfalls and the Politics
5. Abraaj, MCP, Cauris and Other Private Capital Investments in Africa
6. Private Equity Emerging Market Round-Up
7. Summary of Trends in Private Equity in Africa, 2010 - 2015
8. The Venture Capital Industry in Nigeria: DFIs have a Role to Play
9. Mainstream Renewable Power Signs Landmark Africa Clean Energy Equity Funding
10. Private Equity seeks Investment Opportunities in Nigeria