Archive for the 'Private Equity' Category
March 9th, 2011 by Tom Minney
The International Finance Corporation (www.ifc.org), a member of the World Bank Group, on 8 March announced it was investing $10 million in equity in Catalyst Fund I LLC. The fund aims to stimulate employment and accelerate economic growth across East Africa by improving access to equity financing for emerging and mid-size companies.
Catalyst Principal Partners (www.catalystprincipal.com), a private equity firm based in Kenya, has raised $70 million for the fund. Other investors include the African Development Bank, the Commonwealth Development Corporation, Germany’s development finance company DEG and PROPARCO of France.
The fund will invest in growth companies with dynamic management to drive growth, regional expansion, consolidation, and performance improvement. Investments in target companies will range from $5 mn to $15 mn. It will be managed by Catalyst Principal Partners LLC, and aims to invest in Kenya, Uganda, Tanzania, and other East African countries. It will provide financial and management advice to up to 14 mid-size companies across different sectors.
Paul Kavuma, Chief Executive Officer of Catalyst, said: “We anticipate additional substantial commitments in the coming months to achieve our target fund size. We are particularly encouraged by the interest expressed from regional pension funds and insurance companies, noting that we have already received significant capital from reputable local institutions and private investors.”
Jean Philippe Prosper, IFC Director for Eastern and Southern Africa, said: “IFC is supporting this fund to help East Africa’s entrepreneurs gain better access to finance and promote the high growth and dynamic companies that encourage sustainable development and create jobs and new opportunities.”
IFC is the largest global development institution focused on the private sector in developing countries. Investments climbed to a record $18 billion in fiscal 2010.
March 9th, 2011 by Tom Minney
Emerging Capital Partners (www.ecpinvestments.com) has won an award as “Best Private Equity House in Africa” named by EMEA Finance magazine (www.emeafinance.com). This recognizes ECP’s achievements in raising over $613 million for its third pan-African fund, ECP Africa III (AF III), making it the largest fund ever raised for growth equity investing across Africa. It brings ECP’s total assets under management to $1.8 billion.
ECP is praised for committing over $1 billion to diverse investments across all of Africa and impacting growth and development in over 40 countries. It is the second consecutive year ECP won the award.
Hurley Doddy, a founding partner and Co-CEO of ECP said in a press release: “We are extremely proud to receive the award for “Best Private Equity House in Africa” for a second consecutive year. Africa’s profile as a compelling investment story has accelerated in pace over the last two years, so we feel ever more privileged to be held up as the leading firm among our many excellent peers.
“The fact that we were able to raise over $613 million during a time of great financial uncertainty proves that we are certainly not alone in believing in Africa’s potential. Our dedicated focus and extensive presence on the ground adds operational value unrivalled by our peers. We look forward to continuing our success across Africa throughout 2011 and beyond.”
Doddy told Reuters agency in an interview on 7 March that Africa offers plenty of scope for private equity investments, with at least another decade of strong growth expected from consumer goods, broadband internet and financial services. After years of explosive growth in cell phones and banking, he foresees the new growth sectors will also include TV over Internet, insurance and real estate.
Recently, ECP has deployed over $180 million from AF III in 4 investments which provide new services and increase opportunity in 17 countries: Financial Bank, a Togo-based commercial bank with operations in Benin, Cameroon, Gabon, Chad, Mauritania and Guinea; Wananchi Group, a high-speed Internet provider serving Kenya and Tanzania; Groupe NSIA, a West African company providing insurance to Benin, Togo, Senegal, Guinea Bissau, Ghana, Mali, Guinea, Cameroon, Congo and Gabon; and Thunnus Overseas Group, a leading canned tuna provider supplying France with over 25% of its canned tuna products from bases in Madagascar and Cote d’Ivoire.
The group has already made more than 50 investments and 20 successful exits in Africa. Past investments include Nigerian wireless network operator Starcomms and pan-African mobile operator Celtel International, sold to Kuwait’s MTC for $3.4 billion in 2005 before MTNCI was rebranded Zain last year and its African assets were bought by Bharti Airtel. Doddy told Reuters: “Those companies are now quite big. The rates of growth are declining so we’ve been getting out of our last investments in that segment of the telecom business, looking maybe to get in some other segments,” he said.
One such example is Kenya’s Wananchi, a triple-play telecoms firm which bundles broadband internet, cable television and voice telephony into one package and is rolling out its services to 9 east African countries. “A country like Kenya may be over 50% in terms of cell phone penetration but Pay TV, broadband are still at the 1% and 2% type range, so once again we probably have another decade of growth in that type of business,” Doddy said.
He saw further growth in Nigeria’s banking sector, a favourite of frontier market investors, and predicted financial services including insurance would also generate high returns. Changes in land ownership laws would also allow lucrative real estate investments and growth in mortgage lending. Soaring food prices in recent quarters meant investors were increasingly interested in Africa’s agricultural potential, with swathes of arable land that could be put to more productive use. “We’ve seen a real uptake in people looking at agro-businesses here.”
Popular uprisings in North Africa might slow investment in the short term but could unlock the region’s economic potential in future. “Those places had been held back by governance that needed to be changed…I think it is reasonable to expect higher growth rates in North Africa if you look over the next decade.”
He said there was increased interest from Chinese and Indian investors but viewed these as potential co-investors or exit opportunities rather than direct competition.
“If you have a good cash-generative business here in Africa, almost anywhere in almost in any sector, somebody is probably interested in buying,” Doddy said.
The EMEA Finance award is to be presented at annual Achievement Awards charity dinner in London in June.
March 2nd, 2011 by Tom Minney
South Africa’s largest private equity company is transforming itself into a long-term investment holding company and aims to raise ZAR 6 billion ($857.7 million), according to a report on Bloomberg. Brait SA (www.brait.co.za), listed on the JSE Ltd stock exchange (www.jse.co.za), lists its business on its website as “is the raising and management of investment funds that are typically classified as Alternative Assets. The current product-set includes private equity funds, mezzanine debt funds and a range of hedge fund solutions. Additionally, Brait deploys its capital in proprietary investment programmes in these product areas. These investments are made predominantly in South Africa and its region. Investors include leading global and South African institutions.” Bloomberg says Brait manages over $800 mn in 4 funds.
Bloomberg reported a statement to the JSE today (2 March) that the money raised will be used to buy 24.6% of Pepkor Ltd, South Africa’s biggest clothes retailer, which has more than 2,800 outlets in 12 countries under the Pep, Ackermans and Best & Less brands and will use a special purpose vehicle to get exposure of another 10.3%. It will also buy 49.9% and lend R221.2 mn in shareholder loans to Premier Foods, maker of Blue Ribbon bread and Snowflake flour.
The news agency quotes Zaheer Joosub, an analyst at Citigroup Inc: “This is one of those investment opportunities that comes along once every 20 years. It’s a very prudent thing to do.”
Executive director John Gnodde will replace Chief Executive Officer Antony Ball. Christo Wiese chairman of Pepkor and Shoprite Holdings Ltd. will take an anchor shareholding – targeted at 33% – and will become non-executive director of Brait.
The new Brait shareholding is additional to the 20% of Pepkor held by Brait Fund III. The agency quotes Gnodde saying: “We are doing the deals to afford the market an opportunity, through Brait, to get exposure in good, cash companies.” He said the aim was to become a long-term investor. As a private equity firm, Brait would have looked for an exit after about 8 years.
According to a previous company announcement on 13 January, as reported on I-Net Bridge: “International investment group Brait S.A.,Societe Anonyme disclosed on Thursday that the company is considering a potential transaction that may involve a significant equity markets capital raising, the securing of an anchor shareholder, the acquisition of investment assets and an internal reorganisation in support of these steps. The group, that that manages alternative assets, with a focus on hedge funds and private equity, said in a cautionary that the potential transaction remains highly conditional and will require, inter alia, regulatory and shareholder approvals.”
Bloomberg says the offer will be 3 new Brait shares for every 1 held and will open on 15 April 15 and close on 27 May. Shareholders representing 57.41% of Brait’s issued share capital have signed commitments or irrevocable undertakings supporting the transaction.
February 23rd, 2011 by Tom Minney
Leading international private equity firms are investing $79 million to build and acquire mobile phone towers in sub-Saharan Africa. Investec Asset Management (www.investecassetmanagement.com), the International Finance Corporation (www.ifc.org, a member of the World Bank Group), and the Netherlands Development Finance Company (www.fmo.nl) are taking equity in IHS Nigeria Plc (www.ihsnigeria.net) which says it is the largest provider of telecommunications infrastructure in West Africa.
IHS is reported to have more than 2,700 towers under its management and is still expanding its ownership and leasing operations throughout Africa. It has subsidiaries in Ghana, Sudan and Tanzania and employs 800 people, according to the website and is listed on the Nigerian Stock Exchange. IHS Executive Director, Issam Darwish, said in a report on the website that the fund would enhance telecommunications services in the country by breaking current barriers in the sector. Investec made the money available via its African private equity funds. The transaction is subject to regulatory approval.
According to the report, Darwish said: “IHS is dedicated to partnering with operators and investors across the African continent and is thrilled to add the IFC, FMO and Investec Asset Management’s private equity fund to our shareholder base. Since 2001, the company’s core strategy has been to serve the growing needs of the telecommunications operators in Africa and enhance the quality of the network performance.
“The investors understand the unique needs of the growing telecoms sector and the changing competitive landscape. The additional financing package also includes up to $115 million of IFC-led senior debt, mezzanine and syndicated loans, which will allow us to continue our leadership role in providing managed and co-location services to mobile operators and users in Africa.”
Darwish said IHS intended to bring down costs, expand coverage, accelerate technology rollouts and improve the quality of service for subscribers in Africa.
Last October, Nigerian President Goodluck Jonathan had called for more investments in the telecoms sector as Nigeria sought to become Africa’s telecommunications hub.
Yvonne Bakkum, Director Private Equity, FMO, reportedly said: “Access to telecommunications continues to be essential for the economic and social development of Africa. IHS increases the efficiency and quality of existing networks and helps operators accelerate network expansion into rural areas. FMO is proud to contribute to this through our investment in IHS, alongside Investec and IFC.”
IFC is a member of the World Bank Group and the largest global development institution focused on the private sector in developing countries. Andrew Gunther, Senior Manager, IFC Infrastructure and Natural Resources in Africa and Latin America, said: “Broadening access to affordable mobile telecommunications services remains a crucial part of development across Africa. IHS’ track record of improving quality while reducing costs will continue to provide savings that benefit all constituents of telecommunications in Africa.
“With this investment, IFC is helping improve quality of service, expand network coverage, reduce deployment, operating and usage costs – while accelerating the innovation that governments and operators can deliver throughout Africa.”
Investec Asset Management is one of the largest third-party investors on the African continent. It was established in 1991 and has grown into an international business managing approximately $80 billion (end Sept 2010). Mark Jennings, Investment Principal, Investec Asset Management: “IHS has a 10-year track record of profitable growth, is led by an energetic and experienced management team which includes the founders of the business, and is poised for substantial further growth which the new funding will assist. We are pleased to be associated with this dynamic business and team.”
In October 2009, the IFC invested $100 million into Helios Towers Nigeria Ltd. (www.heliostowers.com), set up by Helios Investment Partners as reported on this blog. HTN builds and maintains a network of telecommunications towers and leases space to providers of wireless telecommunications services.
February 21st, 2011 by Tom Minney
A leading African private equity firm, Citadel Capital (www.citadelcapital.com) based in Cairo, says change in Egypt in brings “very compelling opportunities for long-term private equity investors in Egypt and beyond.” However it warned in a press release on 3 February: “The situation on the ground in Egypt remains fluid. Events of the past week may have a short-term impact on both our investment and divestiture plans.”
Citadel Capital (CCAP.CA on the Egyptian Exchange www.egyptse.com), has US$ 8.6 billion in investments under control, according to its website. It also has offices in Algeria. It confirmed that none of the staff in Egypt or 13 other nations where it invests had come to harm during the disturbances. It was due to resume full operations in Egypt from 6 February and operations in other nations were not interrupted.
According to the release: “In the long term, however, Citadel Capital believes that this difficult period will result in a more stable and faster-growing Egypt and region. These opportunities are underpinned by a large, young and increasingly talented workforce; by cost-factor advantages in energy and labor; by an abundance of raw materials; by proximity to major global export markets; and, not least, by consumer markets that include some 400 million Arabs and more than 1 billion Africans.
“We hope, going forward, that these opportunities will be further underpinned by greater democracy and accelerated reforms.
The company builds regional platforms in select industries through acquisitions, turnarounds, and greenfields investments executed via Opportunity-Specific Funds. It has 19 OSFs which control “platform companies” with investments worth more than US$ 8.6 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. According to its website, Citadel Capital has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million) since 2004, more than any other private equity firm in the region. It is the largest private equity firm in Africa by private equity assets under management (2005-2010, as ranked by Private Equity International).
December 21st, 2010 by Tom Minney
Jacana (www.jacana.org), a UK-based group that supports emerging SME private equity firms in Africa, has launched its second investment, a strategic partnership with Ghanaian fund manager Fidelity Capital Partners Limited (www.fidelitycapitalpartners.com).
Jacana’s investment, announced on 13 December, will enable Fidelity Capital Partners to expand the senior team. Jacana will also provide hands‐on management support to the investment team and the portfolio companies ahead of the planned launch of Fidelity’s third fund in 2012.
Fidelity Capital Partners was founded in 1999 and is one of West Africa’s leading SME private equity firms. It manages two SME funds – Fidelity Equity Funds I and II – with a total of $32 million under management.
Stephen Antwi‐Asimeng, Senior Partner of Fidelity Capital Partners, commented in a press release: “We approached Jacana as a strategic partner because we believe that the combination of our local market experience and deal flow with their international expertise in private equity will be a powerful one which will enable us to scale new heights.”
Fidelity manages the funds on behalf of a number of investors, including Ghana’s Social Security and National Insurance Trust (www.ssnit.com) and Venture Capital Trust Fund (www.venturecapitalghana.com.gh), Netherlands-based Oikocredit (www.oikocredit.org) and social venture capital fund Sovec (www.sovec.nl), and leading development finance institutions (DFIs), such as FMO (Netherlands) SIFEM (Switzerland) and Finnfund (Finland).
Claude Barras, Managing Director of SIFEM and Ben Zwinkels, Senior Investment Officer of FMO, both Board Directors of Fidelity Capital, commented: “We believe that the combination of Jacana and Fidelity Capital will enhance returns for all investors and help us to achieve our development goals in Africa. We are excited about working together with Jacana and supporting both partners in their future growth.”
Jacana was founded by European private equity experts and its mission is to contribute to long‐term poverty alleviation by attracting public and private investment to SMEs in Africa and by partnering with and developing local private equity fund managers. Jacana adds capital and expertise and enables its partners to grow their teams, build their track records and raise larger funds. It is Jacana’s second partnership, following its investment in InReturn Capital, an East African SME investment firm, announced in June 2010 (as reported on this blog.
The partnership with Fidelity Capital enables Jacana to extend its footprint in Sub-Saharan Africa and further develop its track record in building successful SME private equity firms.
Jacana was founded in 2008 by a group with substantial experience in the private equity and venture capital industry in Europe. Its co‐founders include Stephen Dawson (a pioneer in the UK VC industry 30 years ago and a co‐founder of Impetus Trust, a venture philanthropy charity), Lord Joel Joffe (a philanthropist with a background in human rights law, a successful entrepreneur and former Chairman of Oxfam), Connie Helyar (a successful entrepreneur in fund administration for private equity) and Simon Merchant (a successful entrepreneur and VC investor). Jacana’s vision is the creation of a sustainable, responsible and robust SME growth capital industry in Sub‐Saharan Africa that supports local SMEs, fuels economic growth, creates employment and thereby makes a major contribution to the reduction of poverty in Africa.
Fidelity Capital Partners Limited was established in February 1997 and started business in November 1999 as a venture capital and private equity fund manager and corporate finance advisor. Fidelity Capital’s shareholders include its management, local and international private investors, and development finance institutions. It is also the local investment partner of Africinvest Capital Partners Limited (www.tuninvest.com), a Pan‐African private equity fund management company.
November 30th, 2010 by Tom Minney
Many financial institutions are gearing up their staffing as they start to roll out their African operations. These include banks, stockbrokers and others. African Capital Markets News interviewed Frank Behrendt, of recruiter Clement May (http://www.clementmay.com), on the trends and the opportunities.
ACMN: Do you think Africa is a growing opportunity?
FB: I had spent 3 years in Singapore recruiting bankers for Asia. Upon my return to the UK I realised that Africa is on the move, and decided to get involved. That was March 2010. At Clement May we have built a good network of bankers – on the continent and in the hubs of London, New York, Johannesburg and Hong Kong (and Moscow) – who are focussing on Africa.
There is a great need for real talent in the African banking sector, and although there are some recruitment firms that focus on Africa, it is a very underdeveloped market in terms of quality recruitment firms (as always, the recruitment sector follows the banking sector in that regard). It has therefore been relatively straightforward to establish ourselves as an African specialist.
ACMN: What are the changing trends in African investing?
FB: Up until last year, the active players in the secondary markets of Sub-Saharan Africa were mainly boutiques. That has changed. More and more international “bulge bracket” banks are eyeing up Africa and including it in their growth strategies. Already counting some of these banks as our clients in Europe and Asia, this puts us in a strong position to address their growth plans and further extend our reach into Africa.
ACMN: Is a lot of new market infrastructure being built? Are new fields of activity opening up?
FB: Stock exchanges on the African continent are improving their services through collaboration with the big international exchanges and improved technology. Local banks are commanding a bigger portion of the volume going through the system and it seems this development is on the rise. As international bulge bracket interest in Africa is on the rise, the share in market volume that these banks can win is dwindling due to the rise of local players.
Global banks are taking a very active interest across disciplines. While the primary markets have gained in strength over the last number of years, the real evidence of increased activity is in the secondary markets. Liquidity has improved immensely over the last year or so and trading in African equities has also increased significantly, both on the ground in Sub-Saharan Africa and around the world.
ACMN: What do you see of Hedge Funds/institutional investors?
FB: More and more Hedge Funds focus on SSA. More international Asset Managers increase the portion of funds invested in SSA. More local fund houses are opening up. The appetite for SSA equities is growing exponentially as a result.
ACMN: Is there a marked increase in the number of jobs available?
FB: Definitely, yes! As the international bulge bracket banks are expanding their businesses, jobs are available on the ground and in the hubs (i.e. Johannesburg, London, Hong Kong and New York). This in turn is spurring greater hiring activity by local firms as well, and so on. Jobs in secondary markets are growing more than primary markets headcounts.
ACMN: What sort of jobs are available?
FB: Private equity jobs are and have through the last 5 years been the most abundant. M&A and corporate finance jobs have been pretty constant over the last few years, but a new surge is ongoing. In secondary markets, research teams are being built both on the ground across SSA and also in the hubs (as above). Sales and execution teams are in the pipeline. I anticipate there being a surge in Sales, Sales Trading and Trading hires in mid-2011. Most of these jobs will be based in London, Johannesburg and New York servicing the international institutional client base. But there are also many headcount needed for positions on the ground in SSA. Of these, most are in Nigeria, then Kenya.
ACMN: Is it hard to find the right people for the jobs?
FB: Not too hard. There is a huge community of very well-educated Africans around the world. Whereas, only a couple of years ago, very few of them would consider a return to their home country, these days, more and more are actively seeking to return, in order to contribute to society with their education and experience. This is obviously connected to the increased activity in the banking sector, and the remuneration packages now available.
ACMN: Are the jobs mostly being filled by Africans?
FB: The banks are mostly looking for natives of the country in which the hiring is taking place. Only for very senior positions will foreign candidates be considered. This does not stem from immigration policy only (although that can also be a consideration as visas become harder to obtain), but also from a desire to have fully culturally assimilated staff in place. Needless to say, jobs in the hubs of London, New York and others focussing on SSA are being filled by candidates from across the spectrum and regardless of nationality. I have seen quite a few bankers on Asian desks in London shift their focus to Africa.
ACMN: What skills/experience do job applicants require?
FB: Some sort of degree, preferably from an international university. MBAs are even more desirable (and a lot of professionals are taking this to heart). At least 3 years’ work experience with an international bank. As banking in Africa is still relatively vanilla and functions often overlap, specific skill sets are not as important as the desire to return home and contribute. I have seen examples of people hired for equity research, although their entire work history was in M&A etc.
November 25th, 2010 by Tom Minney
There is an opportunity in providing banking services to a “Missing Middle”, by focusing on financial services for lower- and middle-income groups in Africa, both individuals and growing small- and medium-enterprises. This is the thesis behind the Botswana-registered Summit Development Group (www.summitdevgp.com) private equity fund, which is currently in the process of raising $125 million and heading towards its first $40 million close.
CEO Peter Hinton told African Capital Markets News: “The Missing Middle segment in Africa represents a tremendous untapped client base for financial services. The World Resources Institute (www.wri.org) estimates that the lower end of the market (those with incomes below US$3,000 in local purchasing power) is worth US$429 billion in Africa (GDP in Africa is approximately US$1.6 trillion according to McKinsey Global Institute) and represents the region’s dominant consumer market, with 71% aggregate purchasing power and encompassing 95% of the population.
“Growing incomes have led to expanding lower and middle classes that are pushing consumer demand upwards, yet to date these groups have been inadequately served by financial institutions. Only 15% of SMEs in sub-Saharan Africa are able to borrow from banks and, according to the World Bank, less than 20% of African households have any access to formal finance.”
SDG operates from offices in Johannesburg and London and has a pipeline of over $300 million of potential investments across 37 deals in 16 countries that the team has selected as priorities. It is actively in discussion with financial institutions for 7 deals for $41 mln of investments with US$ 574 mln total assets in 6 countries and hopes to start finalizing the first deals in the first half of 2011.
SDG sees an exciting opportunity for investment into banks, since many banks need capital now due to changing regulations and increased minimum capital requirements, declining asset prices in the current environment, less competition as big South African and Nigerian banks concentrate on domestic markets and more management talent is available.
The SDG management team has extensive hands-on experience including running financial institutions in Africa, practical management of businesses in a wide range of sectors, and successful private equity investing in emerging markets.
The first investor is the African Development Bank (www.afdb.org), which has committed $25 million, and talks are progressing well with a range of other institutions. The AfDB said in a press release: “SDG will be managed by capable fund managers well qualified and experienced in private equity, having successfully managed financial institutions in Africa. Its commercial approach renders its model and delivery approach sustainable, replicable and attractive to other commercial players and more likely to have a strong demonstrative impact on the market.
“The project has tremendous economic potential benefits in employment creation, poverty alleviation and government tax revenue enhancement among other benefits. The Bank’s involvement in the Fund will help to deepen the financial sector as well as bring much needed long-term capital to SMEs, a significant sector of Africa’s economies and the unbanked. It will also help to improve Sub-Saharan Africa’s economic development.” The bank will add its own expertise from investing in a range of African financial institutions.
The slogan of the fund is “Commercial Returns, Development Impact”. The fund says it will use its tried and tested expertise to build capacity and capital at financial institutions and SMEs, to reach some 5 mln people who do not have enough bank accounts, finance 190,000 SMEs through its investee institutions, and create 1,000 jobs in financial institutions and up to 1.4 mln jobs in SMEs by 2020.
Hinton says: “SME finance is the next frontier: it can build off the momentum of microfinance to create sustainable economic growth.”
November 19th, 2010 by Tom Minney
Aureos Africa Fund (“AAF”) has completed a US$10 million investment in HFC Bank Ghana Ltd (www.hfcbankgh.com), a commercial and retail bank. The investment in HFC will help the bank remain strongly capitalised as it continues the steady expansion of its branch network and of its lending to businesses and consumers.
AAF is managed by Aureos Capital Ltd (www.aureos.com), a private equity fund management company specialising in investing in small- and medium-sized businesses in emerging markets. This is the fund’s 12th investment.
HFC Bank provides microfinance and mortgage finance services, as well as conventional commercial and retail banking and corporate advisory work.
Jacob Kholi, Managing Partner of Aureos in West Africa, comments in a press release: “Whilst HFC is already a well established, well managed and profitable bank, there is significant scope for expansion. We think that a sensible and sustainable growth in their lending and deposit-taking activities would be a real benefit to both Ghanaian businesses and the wider Ghanaian economy.
“Our aim is to help HFC become one of the leading banks in Ghana and ensure it has the kind of financial strength needed to provide the loans and other banking products that are often in such short supply in this region.”
He adds that, as in many other regions, Ghana’s small- and medium-sized enterprises have been hindered from expanding by lack of adequate bank financing.
Asare Akuffo, Managing Director at HFC comments: “In recent years we have enjoyed rapid growth and are now arguably the most diverse financial institution in Ghana. However, our focus has always been on providing the best possible service to our customers. Thanks to this investment by Aureos we hope to be able to expand our product offering to even more potential customers across the wider West African region. We are delighted to welcome them on board.”
HFC Bank was formed in 1990 and listed on the Ghana Stock Exchange (www.gse.com.gh) in 1995. The bank existed as a mortgage finance institution until 2003, when it expanded into commercial and investment banking. It has 23 branches across Ghana, and with the investment from AAF the bank plans to open additional branches as it strategically expands its reach.
Aureos explains that their investment in HFC will also allow the bank to improve on its already robust systems, to improve operational efficiency, and to strengthen its Human Resources capacity.
Jacob Kholi adds: “HFC is fully committed to the principles and practice of good corporate governance. One of their key aims is to further improve their processes and operations to ensure they meet ISO banking standards, which include quality of communication with customers and commitments to data privacy. Aureos’ commitment to good practice, and expertise in these areas, will help HFC do that.”
Aureos was set up in 2001 and has increased funds under management to over US$1.2 billion and extended its geographical footprint to over 50 emerging markets, covering Asia, Africa and Latin America through establishing 16 regional private equity funds.
Institutional investors, bilateral and multilateral development finance institutions, pension funds, sovereign wealth funds, fund of funds, family offices and foundations and high net worth individuals are among the investors into Aureos’ funds.
October 21st, 2010 by Tom Minney
Global asset manager Silk Invest (www.silkinvest.com) is launching the Africa Food Fund, a new Euro 150 million ($209 million) private equity fund focusing on the African food sector. The fund is domiciled in Luxembourg and will concentrate on value-adding, including food and beverages processing and distribution.
Silk Invest CEO Zin Bekkali says “(The) focus of the fund is to invest in companies across the food value chain, and we especially like the companies who are servicing the local African consumers. We firmly believe the food industry is one of the most attractive sectors in Africa, especially in the more populous countries where high demographic growth means growing demand for a more efficient and integrated food chain.
The firm says that millions of Africans are moving up the consumer value chain and this will fuel huge internal demand, as infrastructure improves and quality standards increase. Bekkali says: “We believe that consumption will continue to grow at a robust pace, underpinned by the high economic development across the continent, and that well managed companies operating in this space will benefit from exceptional returns,” he added.
Alexandre Cantacuzene, the director of the African Food Fund, has worked in the food industry for over 40 years, including managing Nestlé’s operations in some African and Middle Eastern countries. Bekkali told Reuters agency in April: “”Examples of target companies that we are analysing are (a) fast food chain which wants to accelerate the number of outlets that it has; a cocoa processing company which wants to sell more of its own branded products; a flavoured fizzy drinks producer which is building capacity in mineral water; and a biscuit maker which is importing currently 50% of the products it sells, but wants to replace it by its own goods.”
“Moving to packaged sugar, milk or flour is a big driver of growth. In most African countries, food is still pre-dominantly sold through non-branded items. (In) the last years we are seeing a dramatic change and African food companies are servicing the local need without increasing the cost of the product. Consumers are able to buy a higher quality branded food item for the same price.”
Much of the investment into African agriculture is still focused on food production and raw commodities. Several countries have seen Eastern and Middle Eastern investment agencies taking land and spending money to grow crops in Africa for shipment to their domestic markets to alleviate food insecurity in the Arab world.
Waseem Khan, director of private equity, said: “Silk Invest’s local presence in the key African countries in which we invest provides us with the key advantage.” Silk Invest is based in London. Its name comes from the “Silk Route”, the historic trade paths linking Europe and Asia.