Jacana merges with InReturn Capital, launches $75m private equity fund for SMEs

Entrepreneurs running small and medium-enterprises (SMEs) in West and East Africa stand to benefit from a new $75 million private equity fund. The announcement follows the news on 29 Jan that two long-term partners are merging.
InReturn Capital (www.inreturncapital.com) is a private-equity company based in Nairobi (Kenya) that invests in SMEs across East Africa, and it plans to close a legal merger in the first quarter of 2013 with London (UK)-based Jacana Partners (www.jacanapartners.com), a private equity specialist in SME investments, which has been building capacity in private equity managers in Africa.
The new partnership will offer a significant boost for East African entrepreneurs seeking value-add expertise and growth capital. InReturn was investing in transaction size of $0.5m-$1.3m and the partnership with Jacana will mean increased access to private equity investment, dedicated investment teams on-the-ground coupled with international private equity expertise and larger deal sizes of between $1m-$5m.
InReturn has rebranded as Jacana Partners. The two firms have been working together for 3 years. Jacana’s West African operations (previously Fidelity Capital Partners) rebranded in August 2012. This creates a leading pan-African SME private equity firm with pan-African coverage which will manage the new $75m SME fund expected to close later this year.
Jacana currently operates in 6 markets (Ghana, Kenya, Liberia, Sierra Leone, Tanzania and Uganda) and intends to move into 2 new countries with the new fund, possibly Ethiopia, Nigeria and/or Francophone West Africa. It is the only pan-African private equity company with a permanent commitment to the SME sector.
Jacana has invested over $20m to date in 20 portfolio companies employing over 1,300 people. In East Africa, 5 investments have been made to date in a stone quarry, an eye care centre, a supplier of tarpaulins to the relief sector, a serviced office provider and a logistics company and several other transactions are contemplated in the next few months.
Professor Njuguna Ndung’u, Governor of the Central Bank of Kenya commented in a Jacana press release: “East Africa is undergoing a period of rapid economic growth largely fuelled by the expansion of our small-to-medium sized enterprises – key generators of job creation and GDP growth. The merger being rolled out today brings scale to the financing of SMEs which will boost their contribution to East Africa’s economic growth. It is my expectation that we shall see more similar initiatives to scale up financing to SMEs that lie at the heart of development blueprints for governments in the region.’’

Passionate about Africa’s entrepreneurs

Getting closer: Ezra Musoke (left) and Anthony Gichini (right) of InReturn Capital flank Simon Merchant CEO of Jacana Partners.


Anthony Gichini, Partner at InReturn Capital said: “The merger of InReturn Capital with Jacana Partners represents a big step forward in private equity investment for SMEs in East Africa. Jacana’s unique model combines international private equity experts with highly-experienced local teams, meaning our entrepreneurs benefit from strategic advice from international business experts as well as dedicated African investment managers on-the-ground who can add-value and provide hands-on management support. This combination is our winning formula which helps us build strong businesses and deliver superior returns.”
Simon Merchant, CEO of Jacana says: “Jacana Partners is a pan-African private equity firm that invests in entrepreneurs, builds successful SMEs and delivers sustainable financial and social returns. We do this because we are passionate about entrepreneurs as the key drivers of job creation and long-term economic development in Africa. Jacana is uniquely structured to overcome the challenges of private equity investing in SMEs in Sub-Saharan Africa. Combining internationally experienced private equity veterans with highly skilled teams on-the-ground, Jacana has the experience, knowledge and resources to structure great deals, grow sustainable businesses and deliver superior returns.
“By merging our African and European operations, we are consolidating our business into a single fund manager, operating under the Jacana brand. As well as investing the remaining capital from our existing funds, the new Jacana will deploy a new $75m SME fund that we are currently in the processing of raising from international investors.
“The new fund will allow us to significantly increase the scale and geographic reach of our operations and will be invested in SMEs in up to 8 countries in East and West Africa. We firmly believe that a unified Jacana operating under the unique Jacana identity is the optimal platform upon which we can fulfill our mission of building the best SME private equity team in Africa, creating sustainable jobs and supporting long-term economic growth.”

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