Last week in brief... Actual deals were hard to come by in Africa's private capital world last week. The main news centered around fund raises, with a couple of notable announcements.
The biggest of the week was a debt issuance - to be precise a Sukuk issuance. Africa Finance Corporation, the multilateral finance institution,issued its maiden Sukuk, raising $150 million, handily beating its initial target of $100 million. The highest-rated ever Sukuk issuance from an Africa institution attracted approximately $230 million in orders in a sign of strong investor interest. The Murabaha Sukuk, has a three-year tenor and will mature on January 24th, 2020. Moody’s has awarded the privately placed issuance an A3 senior unsecured rating.
On the equity front, Inspired Evolution announced that it held a first close for its second fund in late December, garnering commitments totaling $90 million from development finance institutions, specialized fund-of-funds and a family office.
Evolution II, which is aiming to hit $250 million in time for its final close at the end of this year, is a 10-year closed-end fund which will make equity and equity-related investments to take significant minority or equity-control stakes in clean and sustainable development and project finance infrastructure opportunities and growth equity investments in energy and resource efficiency businesses and their supporting value chains.
Pearl Capital Partners, the Kampala headquartered private equity firm which specializes in agriculture investments, has held a €12 million first close for Yield Uganda Investment Fund, a new Agro equity impact fund being supported by the European Union, the International Fund for Agricultural Development and Uganda’s National Social Security Fund.
The fund aims to hold a second close by the end of the year, raising an additional €13 million to bring the fund’s total commitments to €25 million. Pearl Capital Partners is coordinating the raise with Deloitte Uganda, and will target both private and public investors for the fund which will provide Uganda’s small and medium-sized enterprises with access to capital.
In private capital deal news, Kleoss Capital-backed Real Foods has been given the green light by South Africa’s Competition Commission to acquire Highveld Honey, one of the country’s largest honey producers. The undisclosed deal is the latest acquisition for the multi-brand food group which was first backed in 2014 by Genesis Capital Partners and, most recently, in August 2016, when it sold Kleoss Capital a “significant minority stake” to help the company execute its acquisition strategy in the natural food industry. The deal was done via Kleoss Capital Find 1, a R1.2 billion generalist fund which typically looks to invest between R50 million and R150 million in established companies.
There were a couple of interesting perspective pieces in other publications last week. Reuters reports that Africa’s sovereign investment funds are offering infrastructure co-investment opportunities and guarantees to foreign investors in a bid to help close the continent’s yawning infrastructure gap.
Aubrey Hruby writes about the developmental difference private equity can make in Africa. In the Financial Times, she outlines how the Africa-focused private equity community is playing a unique role in the development of the continent, enjoying a symbiotic relationship that turns economic growth into positive investment returns and boosting healthy economic development and the accompanying job creation and political stability it provides.
And finally, a company profile. Last September, London-based Atlas Merchant Capital launched its subsidiary AMC Trade Finance to tap into the opportunity that's offered by Africa's Trade Finance gap. With 32 transactions settled of closed since then and a deal pipeline in excess of $50 million, much is promising to the firm which opens the doors of its South African office this week.
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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