The week in brief… As we were finalizing this week’s issue, news starting filtering in that The Abraaj Group has just closed its latest Africa fund at almost $1 billion. Fuller details were not immediately available, and we will follow developments as they emerge through the week. This fundraising is the second major fund to be raised this month, following Helios’s $1.1 billion raise a couple of weeks ago, and adds to the significant, growing pool of capital targeting opportunities on the continent. EMPEA reported that private equity raised a total of $4 billion for Africa in 2014. Now that we have already hit 50% of that figure before the end of the first month of the year suggests that 2015 will be a banner year for private equity funds raised.
Adding to that total, look to see Atlas Mara raise more capital for their Africa plans in 2015. CBS News caught up with Atlas Mara’s Bob Diamond at the World Economic Forum in Davos where, among other things, he told them that having raised $700 million in 2014, he’s planning to raise a similar amount this year. He’s continues to be a firm believer in the opportunity for scale in Africa’s financial services sector.
On the deal front last week, Ethos Private Equity is placing another bet on the auto sector. Having sold its stake in Tiger Automotive to Carlyle and Old Mutual Private Equity in December, it has now acquired a controlling stake in South African automotive parts retailer AutoZone from RMB Corvest and Zico Capital. While financial terms of the deal were not reported, Ethos will be taking up 3 seats on the company’s board. Ethos sees significant expansion opportunities for the company within South Africa as well as a launch pad for further growth from its footprint in Namibia, Botswana, Swaziland and Zimbabwe.
To help its portfolio company Rift Valley Railways head off anticipated competition from a proposed new railway linking Mombasa with Nairobi, Qalaa Holdings last week announced that is investing $70 million in a new Cargo Handling subsidiary in the Port of Mombasa. The deal is aimed at accelerating the movement of rail cargo and remain competitive with the planned new $3.8 billion China-backed rail link. In other deal news this week, TLG Capital announced an investment of $25 million in GetBucks, the pan-african, technology-driven microfinance company. The deal is TLG’s first in the fintech space, and will help GetBucks expand into new regions and develop new products and services for the market.
Ventures Africa reports that Australian oil firm Swala Energy has appointed London-based FirstEnergy Capital as an advisor as it considers options to sell some of its interests in East Africa. The firm’s holdings are mainly in the East African Rift system. The firm has continued its exploration activities in the region despite the nosedive in the price of oil.
Once again, we found a number of interesting trend and perspective pieces last week. New research out from law firm Baker & Mackenzie predicts that the number of Africa firms listing their shares could jump by 25% in 2015. In less cheerful news, Thomson Reuters data shows that investment banking fees in the sub-saharan region slipped by 9% in 2014 when compared to the prior year. Meanwhile The Economist had an article on Africa’s increasing attractiveness to Private Equity investors, despite the specific challenges making investments on the continent present. And Heirs Holdings CEO Tony Elumelu wrote a post for the Financial Times on how the concept of Africapitalism is helping achieve solutions required by the new global context through entrepreneurship, trade and resource management. 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.