Last week in brief... Bets on Africa’s expanding middle class dominate deal activity in Africa last week. And for those market commentators fretting about the lack of a market for private equity secondary sales on the continent, there were signs that it may be becoming more robust.
Mediterrania Capital Partners sold its 35% stake in Cellulose Processing or CEPRO, an Algerian manufacturer and distributor of baby diapers and feminine sanitary pads, to leading emerging markets private equity investor The Abraaj Group in an undisclosed deal. Robust population growth, rising incomes and low product penetration rates make the North African country and this company an attractive investment for Abraaj.
In another deal inspired by the continent’s consumer story, Old Mutual Private Equity invested upwards of R200 million in In2Food, manufacturer of convenience foods. In December, you may remember, OMPE acquired a 70% stake in MoreCorp, the South African Golf and Cycling retailer, in another bet on the resilience of the country’s upper middle class in the face of the current economic downturn.
Meanwhile Vantage Capital has fully exited its investment in Trenstar, a South African returnable packaging company, in a deal with private equity fund Kleoss Capital, Leaf Capital and Trenstar’s management team. Both Kleoss and Leaf are first time equity investors in the firm. The mezzanine fund manager originally invested in Trenstar in 2010, providing a total of R85 million (or $12 million at 2010 exchange rates) in a combination of expansion capital and management buyout funding. How much they realized with this particular exit was not disclosed, although to date, the investor states that it has now exited seven investments from is first two mezzanine funds, yielding proceeds of almost R2.2 billion of $131 million.
At the venture end of the scale, Silvertree Capital, the investment arm of South Africa-based Silvertree Internet Holdings, announced that it has $10 million earmarked for investment in African e-commerce and tech startups in 2016, doubling the level of investment in acquisitions and business-building initiatives the consumer internet investment platform made in 2015. Preferring to invest in deals from $50,000 to several million dollars in size, the investment company will look for deals in a number of consumer-related sectors, including ecommerce, ad technology, comparison sites, travel, food technology and classifieds, primarily in South Africa, Kenya and Nigeria.
Finally, a couple of notable job announcements last week. Jin-Yong Cai, the former head of the International Finance Corporation, is joining TPG Capital to help develop the global alternative investment firm’s investment push into emerging and frontier markets. His appointment is the latest in a set of moves by TPG Capital to boost its efforts in developing markets and Africa in particular within the last few months. In June 2015, the firm announced a tie-up with Mo Ibrahim’s Satya Capital to invest up to $1 billion on the continent, and made other high-profile hires including the appointment of Donald Kaberuka, the former head of the African Development Bank as a Senior Advisor and Yemi Lalude, the founder of Adlevo Capital, as the Managing Partner for Africa.
And Former senior GE Capital executive Sherwood Dodge is joining The Abu Dhabi Investment Authority as the sovereign wealth fund’s global private equity head. At ADIA, which has $700 million under management, he will spearhead the wealth fund’s private equity strategy, overseeing the institution’s investments in private equity funds, principal investments, secondary fund investments and private credit.
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.