African Capital Alliance announced a $570 million final close for its fourth fund last week making it the largest private equity fund raise completed for African opportunities so far this year. Capital Alliance Private Equity IV (CAPE IV), which was originally targeting $600 million, secured commitments from a broad range of investors, including public and corporate pension funds, sovereign wealth funds, funds-of-funds and development finance institutions. Among those reported was a first-time $85 million commitment from the New York State Common Retirement Fund which was announced in May 2015. Approximately 70% of total commitments to CAPE IV were made by investors in Africa Capital Alliance’s earlier funds.
In deal news, reports emerged that Africa-focused private equity fund Development Partners International or DPI is investing $100 million in Atlantic Business International, the financial services partnership established in 2012 between West Africa’s Atlantic Financial Group and Morocco’s Banque Centrale Populaire. The investment is being made through African Development Partners II, which at $725 million was one of the larger private equity funds to close in 2015, and will be used to buttress the group’s capital as well as support the group’s expansion plans throughout the West Africa Economic and Monetary Region (or UEMOA).
In South Africa, meanwhile, Steinhoff International has concluded an agreement to acquire Tekkie Town in an undisclosed deal, giving private equity investor Actis a full exit from its 42.5% stake in the South African shoe retailer which it acquired for $65 million in November 2014. The fact that Actis is exiting the stake somewhat earlier than the typical five to seven year holding period combined with Steinhoff’s determination to secure some of the other acquisition targets this year has led to speculation that the integrated retailer offered an attractive premium to take control of the firm.
Oman’s State General Reserve Fund and Africa-focused Summit Private Equity are among the members of a consortium investing $50 million in ASX-listed Elemental Minerals. The third member of the consortium is a strategic investor, Sociedad Quimica y Minera de Chile or SQM, an integrated producer and distributor of specialty plant nutrients, iodine, lithium, potassium-related fertilizers and industrial chemicals. Both SQM and the State General Reserve Fund are investing $20 million in the transaction, each acquiring approximately 133 million shares at an issue price of $0.20 to give them each a 17.4% stake in the junior mining company. Summit Private Equity is investing $10 million in exchange for 8.6% of the total issued share capital of the company.
In a strong indication that appetite for African sovereign debt is sharpening once again, Ghana raised $725 million in a Eurobond issue that was more than five times oversubscribed. According to reports, demand enabled Ghana to reduce the yield it offered on the six-year bonds to 9.25% from the 9.5% to 10% pricing being talked about earlier.
A couple of reports caught our eye on the last week. In August, the U.S. Congress was sent the first Power Africa report since the Electrify Africa Act of 2015 was passed and signed into law in February this year. The bill, which provides a crucial underpinning for the President’s Power Africa initiative, establishes the framework for a Public-Private Partnership between the United States and the countries of sub-Saharan Africa to help give millions of people reliable, affordable access to electricity.
And the Africa Private Equity and Venture Capital Association (AVCA) published the results of its annual LP survey having quizzed 67 LPs from a broad range of institutions across the world on their thoughts on the private equity opportunity in Africa. The report finds that LP’s appetite is sharpening, with more LPs looking to increase their exposure to African private equity than in the prior year.
There were a number of high-profile people moves announced at high-profile investment organizations over the past 7 days.
Jürgen Rigterink is taking over as the new Chief Executive Officer of FMO on October 1st, 2016, succeeding Nanno Kleiterp who is stepping down from leading the Dutch development bank after his second term in the role.
Finnfund has appointed Markus Pietikäinen as its new Chief Investment Officer, effective September 1st where he will be responsible for the Finnish development finance institution’s investment operations and serve as a member of the company’s management team and investment committee.
Stuart Bedford, who has led over $40 billion of transactions over his career, has joined LeapFrog Investmentsas General Counsel from Linklaters, where he headed the law firm’s London corporate division and the private equity group.
And Quantum Global, the Swiss-based private equity firm focused on Africa, has tapped Professor Mthuli Ncube to head its independent research business, Quantum Global Research Lab. The division provides macro-economic analysis of key development and economic issues on the continent.
Allan Cunningham is a senior media executive who has spent the last 15 years of his career working for some of the world’s most respected M&A and Private Equity media companies including Dow Jones’s publications Private Equity Analyst and VentureWire and most recently, The Deal. He has built a number of successful digital and event content businesses, both subscription and sponsor-supported, delivering information and content-marketing services to clients in the M&A and broader deal ecosystem. He recently struck out on his own and launched Rowayton Press, a multi-platform media company focused on the private capital opportunities in emerging and frontier markets. Mr. Cunningham holds a Bachelors degree from Liverpool John Moores University in the UK.
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