Spotlight On The Busy Start To African Private Equity In 2016

Written by Dana Sanchez

While the level of investment this year in sub-Saharan Africa is unlikely to exceed 2015’s $4.3 billion, private equity companies have been active in Africa so far in 2016, Moneyweb reports.

They’re focusing increasingly on the continent’s fast-growing consumer markets and on funding infrastructure projects — especially energy.

Here’s a roundup of some of the private equity action so far in Africa in 2016, according to Moneyweb.

This week Medu Capital, a South African private equity firm, announced it had acquired Universal Paints and increased its shareholding in Elite Truck Hire from 27 percent to 100 percent. The total ticket price: $29.5 million US.

South African buyout company Rockwood Private Equity said it was looking to raise $500 million for a new fund investing primarily in South African industrial and service companies with leveraged buyouts.

U.K.-based Ashburton Investments announced it had raised $32.8 million for its first private equity fund which it plans to limit to investments in Africa excluding agriculture, resources, venture capital and property.

Dubai-based MENA Infrastructure said it had exited its investment in Egypt’s Alexandria International Container Terminals. The fund sold its 30.3 percent stake in the two container terminals to Hutchison Port Holdings, a company owned by Asia’s richest man, Li Ka-shing.

Singaporean sovereign wealth fund, GIC, plans to make its first investment commitments in Africa, backing real estate funds managed by U.K.-based Actis and South Africa-based RMB Westport with a combined total of $100 million.

Earlier this month, U.K.-based venture capital firm Amadeus Capital Partners invested $2 million in Cape Town-based digital insurance distributor Hepstar. Founded in 2013, Hepstar was established to address the need for e-commerce companies in general and airlines and travel companies in particular to maximise revenue from ancillaries.

Along with South Africa-based mobile service company MTN, Amadeus invested $40 million in February in Travelstart, an online travel agency with more than 75 percent market share. It has a market leadership position in Nigeria, Egypt, Kenya and parts of the Middle East.

Actis announced the sale of Emerging Markets Payments (EMP) to Dubai-based Network International. EMP is a leading Africa and Middle East payments business established in 2010 as a buy-and-build platform to capitalize on increasing demand for payments infrastructure in the regions.

Amwal AlKhaleej, a Saudi Arabia-based private equity firm, sold its investment in Sarwa Capital, the parent company of Contact Auto Credit, to the Egyptian-American Enterprise Fund.

Investec Africa Private Equity Fund 2 raised $295 million backed by pension funds, endowments and development finance institutions from across the U.S., Europe, the U.K. and Africa. The fund will focus on investments in the consumer space across the continent.

Also in February U.K.-based Enko Capital Managers announced the $83.25 million second and final closing of its Enko Africa Private Equity Fund which targets late-stage companies across the continent that have the potential to list on the local stock exchanges.

Synergy Capital,with offices in Nigeria and Ghana, announced it had made the fifth deal for its $100 million-plus fund with an investment in Africa Terminals, a terminal and storage company, offering services to local and international petroleum products companies across West Africa.

Global growth markets investor The Abraaj Group has been particularly active since the start of 2016. Through its second generation North Africa Fund it has acquired a significant minority stake in Algerian Cellulose Processing, a manufacturer and distributor of baby diapers and feminine products. It also bought a stake in Société d’Articles Hygiénliques, a producer of disposable household and personal care products for babies, women and adults in Tunisia. The private equity group also announced the exit of its investment in Integrated Diagnostics.

In January Ethos invested into the Eazi Group in a deal valued at $105 million. Through its Fund VI, Ethos acquired a 65 percent stake in the rental, sale and servicing group.

Vantage Capital exited its investment in TrenStar, a southern African returnable packaging company. In 2010, Vantage provided expansion funding to TrenStar and funded its black empowerment partner African Woman Chartered Accountants Investment to acquire a 26 percent stake in TrenStar. Following the exit, the new investors in TrenStar are Kleoss Capital Fund I, Leaf Capital and management.

About Dana Sanchez

Dana Sanchez was born in South Africa and is a U.S. citizen. After working in advertising, she went back to school and earned a master's degree in journalism from the University of South Florida. As a business writer, she won regional and national writing awards. As editor of a daily newspaper, she coordinated staff writers, freelancers and photographers in the fast-paced environment of daily news. Dana was an editor at Moguldom Media Group for four years, helping to build and manage a team of staff and freelance writers. She works now on for Nubai Ventures. A long-distance hiker and cyclist, she writes about the business of technology.