Last week in brief... Under scrutiny for LP claims of fund mismanagement, The Abraaj Group filed for provisional liquidation in the Cayman Islands last week, in effect pushing the pause button on creditor claims while the company and provisional liquidators work out a restructuring of its debt obligations. Abraaj met its creditors to negotiate a stand still deal at the beginning of June. While most of the creditors reportedly agreed, Kuwait's Public Institution for Social Security which is seeking repayment of a $100 million loan and Auctus which claims it is owed $300 million held out.
Abraaj's woes began in December last year when several investors including the Bill & Melinda Gates Foundation and the IFC accused the investor of mismanagement of its $1 billion healthcare fund which backs hospitals and clinics in Africa and Asia. While the company has always denied any wrong doing and audits have reportedly found no sign of misappropriation of funds, Reuters reports that Deloitte found that the investor had commingled the fund's capital with its own. Abraaj, on the other hand, maintains that money moved out of the fund was used for its stated purpose or returned to investors.
While overshadowed by the Abraaj news, there was some deal and fundraising activity last week. Having sold its stake in Ghana's largest independent pensions trustee Petra Trust in March this year, LeapFrog Investments is striking a deal for a piece of another West African pensions company. This time the private equity impact investor is taking a stake in ARM Pension Managers, one of Nigeria's largest pension fund administrators. Terms of the deal have not been disclosed.
A high-growth company with approximately $1.8 billion in funds already under management, ARM looks to be well-positioned to benefit from the rapid rise in demand for pensions in Nigeria, a sector which is one of the fastest growing in the country's financial services market. It's estimated that about 89% of working Nigerians do not yet have pensions, a huge and under-penetrated market that offers ARM significant opportunities.
Oil major Royal Dutch Shell's corporate venture capital arm has led a group of investors backing SunFunder. Shell Ventures led this, the solar financing company's latest round, in concert with Schneider Electric and Better Ventures, both previous investors in the firm. With offices in San Francisco and Nairobi, SunFunder has already provided some $45 million in debt financing to 40 companies operating in the off-grid and weak-grid sectors since it began making loans in 2012.
Pointing towards a possible exit for Vumatel's investors, it was announced last week that Community Investment Ventures Holdings is taking an initial 35% stake in the South African fibre-to-the-home provider which counts Investec and Vantage Capitalamong its backers. The deal is a precursor to an eventual buyout of the firm which Vumatel's shareholders have agreed to, pending the receipt of funding and regulatory approvals.
Meanwhile, in fundraising news, Criterion Africa Partners has held the first close for its latest fund, the Africa Sustainable Forestry Fund II. The US-headquartered private equity firm has received commitments totalling $81 million from a quintet of European development finance institutions. Ultimately, the private equity fund manager is looking for $150 million to back businesses acros the forestry value chain.
Zebu Investment's latest fund, the African Food Security Fund, has won an investment commitment from the African Development Bank. The pan-African private equity fund manager is $15 million closer to its $100 million goal courtesy of the Abidjan-headquartered DFI. The fund expects to hold its final close this year.
African Food Security Fund's strategy will be to invest in SMEs operating in the food and agriculture value chains across sub-Saharan Africa which display strong potential for rapid growth.
That's it for this week. As always, you can review these and other stories by clicking through to this week's 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.