Last week in brief… Dollar-wise, the two biggest private equity deals involving African assets last week involved exits-and they were companies that had operations in other regions in addition to their African businesses.
In the first, having sold a significant proportion of its stake in Rocket Internet in late February this year, Swedish investment firm Kinnevik AB sold its remaining 6.6% shareholding in the publicly-listed internet investor, earning gross proceeds of €217 million.
The transaction caps a very successful investment for Kinnevik, returning an IRR of more than 90% on its €155 million investment through a combination of dividend and divestment proceeds. Rocket Internet holds a stake in e-commerce company Africa Internet Group, the owner of several African e-commerce businesses through the Jumia platform.
The second comes courtesy of The Abraaj Group, which led a $60 million deal in Careem, the Dubai-based app-based car service in late 2015 and has now sold its stake to Kingdom Holding Company. The exit forms part of an overall $150 million investment in Uber's regional rival by a group of companies that include German car maker Daimler, venture capital firm DCM Ventures and hedge fund Coatue Capital.
Kingdom Holding is investing a total of $62 million for a 7% stake in the company, which it acquired through a combination of the secondary share purchase from Abraaj as well as participation in Careem's broader fund raise.
In an infrastructure deal, African Infrastructure Investment Managers is taking a 44% equity stake on behalf of its third fund in Albatross Energy Mali as part of a mixed debt and equity financing package totaling €125.5 million. The size of AIIM's stake means that the infrastructure investment specialist is now Albatross Energy's largest shareholder and the asset joins AIIM Hydroneo and DSM Corridor Group in Fund III's portfolio.
Hot on the heels of its investment in KARE Distribution two week's ago, XSML Capital is backing Maison Galaxy, a retail chain based in Kinshasa. Terms of the deal, which is the fifteenth for the fund, were not disclosed.
Maison Galaxy, which was only founded in 2014, now operates a chain of 8 stores, located in Goma, Kitanga, Kisangani as well as Kinshasa. The firm is tapping into increasing consumer demand in the Democratic Republic of Congo for fashion, cosmetic and beauty products, and, with the latest investment, plans to open three additional stores and broaden the range of merchandise it offers.
ABO Capital, the Angolan investment firm headed by Zandre Campos, has acquired Complexo Escolar Privado Internacional in Benfica, a suburb south of the country's capital Luanda. The move looks like it is a first step in building an educational platform for ABO Capital, which plans to open up three additional schools in the near future.
In fund raising news, Fanisi Capital, the Kenyan private equity fund manager, has held the first close for its second fund, garnering $30 million from a group of institutional investors, which, notably, numbers eight East African pension funds among its members.
The fund, which is ultimately looking to raise a total of $75 million, will pursue a strategy similar to Fanisi's maiden fund, the $50 millions Fanisi Capital Fund I, which is now fully invested in four high-growth sectors-agribusiness, education, healthcare as well as retail and wholesale-in Kenya, Rwanda, Tanzania and Uganda.
The African Development Bank is making a $15 million commitment to ShoreCap III, Equator Capital's planned $150 million fund which will back small and medium-size enterprise banks, microfinance institutions, micro-insurance and financial technology companies in equity and quasi-equity deals. The fund will make investments exclusively in sub-Saharan Africa and expects to make up to 15 deals averaging $8 million in size over the course of its 10 year life.
Capital Eye, the South African private equity and venture investor, has established a new fintech platform called Crossfin Technology Holdings to house its current and future fintech investments. Durban-based investment firm Multiply Group is backing the new platform, acquiring 35% of the new venture, whose formal launch was announced 10 days ago. Using Capital Eye's capital as well as the investment from Multiply, Crossfin will actively look to make new acquisitions as well as make further investments in the existing businesses.
Two reports came out last week with some interesting data points. Firstly, among the findings in a report from KPMG and the East African Venture Capital Association, private equity firms raised a total of $1.1 billion for investments in East Africa between 2015 and 2016, a marked increase on prior years. But heading North on the continent and the story couldn't be more different. The MENA Private Equity and Venture Capital Association's annual report has found that fundraising by funds in the region faced significant headwinds in 2016 due to economic and geopolitical factors. In their view, the outlook for 2017 is not much better.
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.
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.