Last week in brief… Blame it on the time of year, perhaps, but actual deals were thin on the ground in Africa's private capital world last week. But funds and fund raising news bucked that trend and were once again at the forefront of the action.
The only private equity deal of consequence was undertaken by a portfolio company. MédiS, a generic pharmaceuticals business with operations in Tunisia and Algeria in which Actis acquired a stake from fellow-private equity investor AfricInvest last year, announced it is buying Winthrop Pharma Senegal from Sanofi in an undisclosed deal.
A proportion of the capital for the acquisition was provided by MédiS, with the balance being provided by Actis’s $780 million Africa Fund 4. Winthrop Pharma Senegal enjoys a significant position in the pharmaceuticals sector in French-speaking sub-Saharan Africa, and the deal is in line with the strategy to build MédiS into a significant pan-African and Middle Eastern pharmaceuticals platform.
AfricInvest is launching its second fund specifically targeting financial sector opportunities on the continent. With the goal of raising €200 million (approximately $214.5 million), the fund will build on the track record and experience of its predecessor fund, which has backed 21 financial companies in 16 countries.
The new fund plans to be more than double the size of its predecessor, which closed in early 2014, garnering €61 million (approximately $83 million at the time) in commitments from several institutions. The fund aims to capitalize on the opportunities presented by the continent’s rapidly changing financial services landscape.
Sango Capital Management has raised $145 million for its second private equity fund from a group of 26 Limited Partners. This appears to be a second close for the planned $200 million fund, following an $86.8 million close held in the in July last year. Based in Johannesburg, Sango Capital pursues a hybrid investment strategy, investing its funds’ capital in Africa-focused private equity funds as well as making direct co-investments in select opportunities.
The remaining fund-related news last week was largely the preserve of the DFI sector. In terms of specific commitments, the largest came from the European Investment Bank, which is mulling whether to invest $16 million in Maghreb Private Equity IV, a €200 million ($214.5 million) generalist closed-end fund managed by AfricInvest. The fund makes growth capital investments in small and medium-sized businesses in Tunisia, Morocco, Algeria and Egypt.
Meanwhile, helping Catalyst Principal Partners’ second fund close in on its $175 million target, SIFEM, the Swiss Government’s development finance institution is investing $8 million in Catalyst's latest generalist, East Africa-focused private equity fund. The fund held a $103 million first close at the beginning of April, landing commitments from several development finance institutions, fund-of-funds and family offices. It 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.
Infrastructure finance was the source of the remaining fund news of the week. Once again, various DFIs were seen taking the lead. The IFC is joining forces with Amundi, the European asset management firm, to launch the largest green bond fund for emerging markets. With a $2 billion target, it’s aimed squarely at the growing market for climate investments. The IFC will provide $325 million for the Green Cornerstone Bond Fund while Amundi will raise the balance of $1.675 billion from institutional investors as well as manage the fund. The fund’s strategy will be to buy to green bonds issued by emerging market banks, including those in Africa, and it aims to be fully deployed within seven years.
In early March, the heads of the Agence Française de Développement and the Caisse des Dépôts, both French development finance institutions, agreed to team up and launch a €600 million infrastructure fund for emerging markets. The fund’s strategy will be to source greenfield opportunities in the energy, transport, water, sanitation, health, education, telecoms and digital infrastructure projects. With leverage, it’s anticipated that the fund will be able to invest up to €6 billion across all the projects it backs.
In strategy news, Indian conglomerate Tata Group’s Housing arm is planning to set up a $200 million investment platform with the help of private equity investors to develop projects in East Africa. The company, which has already signed term sheets for projects in Kenya and Tanzania, will develop the projects in partnership with government and local private companies.
In a piece of positive trend news, Thomson Reuters' latest Sub-Saharan African deals analysis shows that Africa's in-bound M&A activity reached a 7-year high in the first quarter of the year, quintupling in value compared to the same period last year. Meanwhile, international acquisitions made by South African organizations accounted for 59% of the region’s outbound M&A deals.
Finally, a couple of significant appointments in leading investment firms on the continent were announced last week. Firstly, Chris Newson, the former Chief Executive of Standard Bank Africa, has joined Investec Asset Management as Director of Private Markets. He’ll work with the heads of the various private markets teams to help them continue to develop their lines of business.
And secondly, Africa50, the infrastructure investment vehicle backed by the African Development Bank and more than 20 African countries, has appointed Carole Wamuyu Wainaina to head up the non-investment side of the business as its Chief Operating Officer. In this new multidisciplinary role, Wainaina will be responsible for the activities in the Investor Relations, Strategy, Communications, Human Resources and Environmental and Social Governance functions of the firm.
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.
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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