Last week in brief...Funds, funds, funds. Once again this week, most of the news coming out of Africa's private capital markets concerned fund launches and raises. And some of them are of a significant size.
We'll start with the one that is potentially the biggest. It's also the newest. Helical Capital Partners announced the launch of its first private equity fund last week which is targeting $300 million in time for its final close, raised exclusively from South African and other sub-Saharan investors. Partners Group will manage the fund, leveraging its successful Global Value investment program to give Africa's investors access to global returns, geographic diversification and a broad range of private company investment opportunities, investing into a blend of direct, primary and secondary private equity opportunities primarily in North America and Western Europe.
The second new fund announced last week is the Agri-Business Capital Fund, an impact fund which will be managed by Bamboo Capital and Injaro investments. The fund, which is ultimately looking to raise €200 million or about $225 million, will invest either equity in or provide small loans to rural small and medium-sized businesses, farmers’ organisations, ‘agri-preneurs’ and rural financial institutions in Africa. The fund is starting off with €50 million (or $56 million) in first loss capital from several institutions including the European Union, the Luxembourg Government and the Alliance for a Green Revolution in Africa.
In an SEC filing, Sango Capital revealed that it has has raised $81.6 million for its third private equity fund from a group of eight LPs. According to the Form D filing, the fund's final close target is $200 million, and while details of the the fund's strategy were not immediately available, Sango earlier funds pursue a hybrid investment strategy, backing Africa-focused private equity funds as well as making direct co-investments in select businesses, sticking to four investment themes that seem likely to be Africa's biggest growth drivers; the emerging consumer, energy and power, food and mineral value chains and infrastructure services.
Investisseurs & Partenaires announced the second close for their second African entrepreneur fund last week. The impact investment firm has raised an additional €25 million to the fund, which is added to the €50 million raised in time for its first close in December 2017. The impact investor hopes to have reached its final target pf €80 million to €90 million by the middle of this year, making it one of the largest impact funds around targeting opportunities in Africa.
There was news of two dfi-related fund commitments during the week. In the first, OPIC is providing the anchor investment for an off-grid solar debt fund backing opportunities in sub-saharan Africa and Asia. The US government's DFI is providing $20 million to SIMA's Off-Grid Solar and Financial Access Senior Debt Fund 1, which will provide senior loans to companies that finance, manufacture and/or distribute individual solar home systems to customers in its regions.
And in the second, IFC is mulling whether to make a commitment to TLcom Capital's TIDE Africa Fund, whose strategy is to invest in early stage and growth stage businesses that leverage technology to lower the cost of services to both Africa’s enterprises and consumers. Regionally the focus will be on anglophone countries, particularly Nigeria, Kenya, Ghana and South Africa, sourcing opportunities in several sectors including agribusiness, financial services, energy, education and healthcare.
In deal news, South African venture firm Knife Capital is making a substantial growth capital investment in PURA Beverage Company in exchange for a significant minority stake. The fresh funding will be used to expand the company's marketing initiatives, recruit new, needed employees, boost product development as well as provide the working capital needed to keep up with market demand.
For its second deal of 2019, CDG Capital PE is making an investment in a Moroccan chemical and fertilizer manufacturer. The SME-focused private equity fund manager is taking a minority stake in SCE Chemicals for an undisclosed amount on behalf of the Capmezzanine II fund. The fresh capital will be used to finance the development of a new manufacturing unit to produce chemicals the company previously has had to import.
And finally, Ray Washburne, who Donald Trump tapped to lead OPIC in mid-2017, announced he is stepping down as the agency's President & CEO on March 1st. He's been in the driving seat as what many believe to be the biggest change in the United States' development policy got underway, the formation of the US International Development Finance Corporation with a remit to use broader financing methods and new authorities designed to support Africa and other emerging markets as they build critical infrastructure. He'll be succeeded by David Bohigian, OPIC's Executive Vice President.
That's it for this week. As always, you can review these and other stories by clicking through to this week's preview edition of the newsletter.
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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