Catalyst holds $103mln first close, Enko launches $200mln debt fund


Monday, April 03, 2017   04:41 PM / Africa Capital Digest

Fund raising news dominated the headlines in Africa's private capital world last week. Both fund launches and partial closes. And in various shapes and sizes for various asset classes.

The biggest private equity fund making news last week came courtesy of Catalyst Principal Partners. The Nairobi-based fund manager held a first close for its second fund, touching $103 million in commitments from a mix of Africa-focused fund-of-funds, development finance institutions and regional family offices. All had been investors in the fund's $123 million predecessor fund, with a number of them reportedly increasing the size of their commitment to the new vehicle.

Catalyst Fund II is targeting $175 million for a final close, which it anticipates will take place later this year. The 10-year fund will pursue a similar strategy to that executed by Catalyst Fund I, making mid-market growth capital investments within fast growth consumer demand driven sectors across Eastern Africa.

Pan-African asset management firm Enko Capital is launching a $200 million bond fund which will invest in Africa debt instruments denominated in both hard and local currencies. The new fund is the third investment vehicle for Enko, adding a fixed income product to its offering which, until now, has featured a private equity fund and a listed equity fund.

It's hoped that the fund will attract commitments from foreign investors keen to expand their exposure to the higher yields available on the continent. The fund will back both sovereign and corporate debt issues across the continent, with the exception of South Africa.

Brian Joffe, who founded Bidvest in 1988, is listing Long4Life, an investment firm with an expected capitalization of R2 billion (about $150 million) on the Johannesburg Stock Exchange at the end of this week. The investment company will not be raising any additional capital after the listing date, according to the SENS announcement.

Broadly speaking, Long4 Life will back both listed and unlisted consumer sector-oriented companies or ones which the firm describes as having a "lifestyle" focus. It will steer clear of banking, mining and resources opportunities. The investment vehicle aims to deliver annualized growth in excess of 15% over the medium-to-long term. 

Amethis, I&P and Partech Ventures are all in line for a capital commitment to the funds they're raising from the European Investment Bank. In statements on the EIB's website, the EU's development finance institution is mulling whether to invest a total of €50 million in the three private equity funds, all of which are focusing on opportunities within the SME sector, predominantly in the sub-Saharan region.

In deal news last week, Africa-focused private equity firm, 8 Miles is making the eighth investment for its first fund by acquiring a significant minority interest in Blue Skies, a UK-incorporated tropical fruit business with operations in several African countries.  While financial terms of the deal were not disclosed, the fund typically puts between $15 million and $45 million to work in each investment.

One of the companies in 8 Miles' existing portfolio received an additional capital infusion last week. Verde Beef Processing, which 8 Miles backed in early 2016, is the beneficiary of Norfund's first investment in Ethiopia. The deal, which was led by Kjartan Stigen, Norfund's Regional Director for East Africa, is a $7.4 million convertible debt investment and grants the Norwegian DFI an observer seat on the company's board. Should full conversion of the debt occur, that seat would become a full seat.

In venture capital investment news, KNF Ventures, the section 12J Venture Capital Company launched by Knife Capital in early 2016, is backing Quicket, an online ticketing solutions company, in an undisclosed deal. The capital will be used to support the company's plans to streamline its service offering in South Africa as well as its plans to expand to other select countries on the continent. A significant portion of the KNF investment will be allocated to fine-tuning Quicket's mobile ticketing solution and developing a scalable mobile ticket kiosk to build a physical distribution network in Africa.

In an article in the Financial Times, Imaduddin Ahmed, a PhD student at University College, London, discusses how off-grid solar has taken the crown to be the latest leapfrog infrastructure technology from the mobile phone. He explores the impact the technology is having in Rwanda as well as the challenges and risks investors face in building their businesses.

Last week, the London Stock Exchange, in partnership with a number of other organizations, launched its report "Companies that Inspire Africa 2017." This is the first edition of the publication, which identifies 343 private companies from 42 African countries considered to be the continent's most dynamic and exciting small businesses. It will be interesting to take a look.

And finally, a couple of job change items were reported last week. In the first, Daniel Kamau is succeeding Luke Kinoti as Chief Executive Officer of Fusion Capital, the East African private equity and real estate investment firm. Kinoti, who has been the firm's CEO since 2006 when he co-founded the firm with Philip Goodwin, is retiring from the role and will pursue other business interests.

And in the second, Joseph Nnanna, the Deputy Governor of the Central Bank of Nigeria is taking over the role of Chairman of the Africa Finance Corporation from Sarah Alade, who is retiring. A well-respected Economist and Banker, Dr. Nnanna's career spans more than 30 years, and has included periods spent as an advisor to several leading institutions including the United Nations Conference on Trade and Development, the Government of Nigeria as well as serving on the Board of the International Monetary Fund. He was appointed to the Board of the Central Bank of Nigeria in February 2015.


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