Last week in brief… It was another quiet-ish week on the private capital investment from in Africa last week. In terms of deals done, Vantage Capital made its third investment from Fund III, which is currently in fundraising mode and aiming for a $260 million final close. The transaction was with United Africa Group, a property and hospitality group in Namibia, which Vantage agreed a debenture facility of approximately $5.6 million to support the company’ share of the development of a new Hilton Garden Inn in Windhoek.
Moving north on the continent, Catalyst Principal Partners, the private equity firm which targets opportunities in East Africa, announced an investment in Orbit Chemical Industries last week. While terms of the deal were not disclosed, Catalyst’s typically invests between $5 million to $20 million in its transactions. The Orbit deal marks Catalyst’s fourth transaction in the manufacturing and consumer product sectors, following earlier investments in Tanzania’s Chemi & Cotex Industries, Chai Bora and Ethiopia’s Yes Brands. The investment is the third for Catalyst in Kenya, with the private equity firm having previously invested in Goodlife, a pharmaceutical retailer and most recently, Jamii Bora Bank, an SME lender.
Meanwhile, 8 Miles, announced it is taking a significant minority stake in Verde Beef Processing, an Ethiopian agribusiness. The capital will be used to finance the firm’s expansion plans, multiplying its current base of 6,000 animals ten-fold and constructing an abattoir and meat processing facility. Demand for premium beef in the Middle East, Africa and Asia continues to rise, offering Verde Beef Processing the opportunity to grow overseas markets for its products and services.
The IFC is considering a number of potential investments at the moment. The biggest is an investment of $40 million in the Senior Unsecured Note of African Local Currency Bond Fund, an investment vehicle sponsored by German development bank KfW, which will be managed by LHGP Asset Management, an affiliate of Lions Head Global Partners, a London-based merchant banking firm. The fund’s goal is to support the development of African Capital markets by improving and diversifying access to long-term funding in local currencies, anchoring first-time or innovative bond issuances by local entities.
Not far behind in terms of size, the IFC is also mulling an investment of up to $30 million in a mix of senior debt and quasi equity/equity in Hassan Allam Construction, a private, Egyptian construction group that is looking to diversify its activities by developing and taking partial ownership in a select number of the country’s long-term infrastructure projects.
Finally, a couple of interesting trend pieces were published within the last week. EY and the African Private Equity and Venture Capital Association released their fourth annual analysis of the private equity industry on the continent, reporting that private equity asset sales reached a nine-year high in 2015 as funds raised between 2006 and 2008 came to the end of their lives. And EMPEA published the latest Global Limited Partners survey last week which finds that some 40% of LPs anticipate increasing the dollar value of new commitments to emerging market private equity funds over the next two years compared with 46% in the 2015 survey. Southeast Asia ranks as the most attractive emerging market for GP investment over the next 12 months, while Sub-Saharan Africa comes in third.
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.