Private Equity News
- IFC invests in Côte d’Ivoire’s mining through Sama Resources 22 December 2011
The International Finance Corporation (www.ifc.org), a member of the World Bank Group, on 20 Dec agreed to invest some CAD1,250,000 (Canadian dollars, equivalent to US$1.2million) in nickel and copper exploration. Sama Resources Inc (www.samaresources.com) will use the funds raised to advance the Samapleu project in eastern Côte d’Ivoire, near the border with Guinea, which it hopes will provide future jobs and government revenues to Côte d’Ivoire. The transaction is set to close in December.
The country has significant mineral resources but development of the mining sector has been hampered by political and military crisis during the past decade. IFC’s support to the Samapleu project will help promote good environmental and social standards in the country’s mining sector and send a positive signal for future foreign direct investment in the country.
IFC will work with Sama to ensure that exploration and any subsequent mine development is carried out in an environmentally and socially sustainable manner.
Dr. Marc-Antoine Audet, President and CEO of Sama, said in a press release (search “samapleu” on IFC website): “Sama is pleased to welcome IFC as a shareholder and partner on the Samapleu project. We look forward to drawing from IFC’s expertise to help ensure that the progress at Samapleu follows global best practices for the mineral exploration industry, the environment, and for working with local communities.”
Tom Butler, IFC Global Head for Mining, added: “We are excited to be making IFC’s first mining investment in Côte d’Ivoire through Sama, a company we believe has the leadership and resources to make the Samapleu project a success. This investment aligns with our strategy to support early-stage exploration companies with financing and advice.”
IFC offers mining clients in developing countries a broad range of financial and advisory services throughout the mining life cycle. Its early-equity investment programme is to help exploration-stage companies, such as Sama, with financing and advice on best practice in environmental and social management.
IFC is the largest global development institution focused only on the private sector. In fiscal 2011, investments climbed to an all-time high of nearly $19 billion.
IFC is acquiring 3,968,254 units, each of 1 common share and 1 warrant, out of 5,105,539 units offered by Sama to IFC and 2 other investors in a private placement. Each warrant entitles the holder to purchase 1 common share of Sama at an exercise price of CAD0.4725 per common share for a period of 4 years, subject to Sama’s right to accelerate the expiration of the warrant.
The issue price per unit is CAD0.315 Canadian dollars. It is expected that after completing the subscriptions to IFC and the other 2, there will be 66,013,174 Sama common shares outstanding and IFC will directly hold approximately 6.01% of the outstanding share capital and approximately 11.34% of the outstanding share capital if it exercises all its warrants
About Sama Resources
Sama is a growth-oriented resource company focused on exploring and developing nickel-copper-sulphide and laterite resources in West Africa. Its goal is to become the first poly-metallic producer in the region along side its joint venture partner SODEMI (Société pour le Développement Minier de Côte d’Ivoire – www.sodemi.ci). Its key assets are Samapleu project in Côte d’Ivoire and Lola project in Guinea, both in exploration phase. Future production from Samapleu will be managed by a joint venture controlled 66⅔% by Sama Nickel Corporation, a wholly-owned subsidiary of Sama, and 33⅓% by SODEMI. The licence encompasses 449 square kilometres and hosts nickel-copper and nickel-cobalt rich laterite deposits, and the newly discovered massive chromites occurrences.
The Lola project is 100% owned by Sama and encompasses 1,212 square kilometres adjacent to the Samapleu project. The Lola project has strong potential for nickel and copper mineralization and nickel-cobalt rich laterite. - Aureos Africa Health Fund invests $2.5m in Kenya healthcare 21 November 2011
Aureos Africa Health Fund invested $2.5 million in a Kenyan hospital and health insurance company, the Avenue Group (www.avenuehealthcare.com), which offers affordable healthcare cover, integrated with quality healthcare provision. It has a 70-bed full-purpose hospital in Nairobi, 7 clinics through Kenya as well as in-house clinics for corporate clients, a home-based care service for elderly, terminally ill or otherwise dependent patients, rental and sale of wheelchairs and other rehabilitation equipment for home use, and First Aid training schemes.
It combines healthcare cover with quality, affordable outpatient and inpatient medical services. The group’s corporate medical schemes are designed to be accessible to businesses with as few as 10 employees and around 70% of the staff covered are in non-managerial roles. With Aureos investment, Avenue Group will expand into other regions in Kenya, building 2 more clinics in smaller towns and expanding existing in-patient facilities in Kisumu and Mombasa. The funding will ensure the group can continue non-profit activities, such as free medical camps across Kenya and public health screening days at Avenue clinics.
Africa Health Fund is managed by private equity manager Aureos Capital Ltd (www.aureos.com), which specialises in socially sustainable small to medium-sized businesses in emerging markets. It has more than 20 local offices covering more than 50 markets. It has expertise in healthcare, with investments in hospitals and medical supply companies across Asia, Latin America and Africa. It builds environmental, social and governance performance into its investments as an integral part of managing risk and generating returns, particularly in Africa where managing employees’ health is a major challenge for many of Aureos’ portfolio companies.
Africa Health Fund was established by Aureos in June 2009 with the International Finance Corporation (www.ifc.org), the African Development Bank (www.afdb.org), DEG, and the Bill & Melinda Gates Foundation (www.gatesfoundation.org) as cornerstone investors. Subsequent investors include the Elma Foundation (www.elmaphilanthropies.org) along with private investors such as family offices and a major European retail bank. Committed capital in the fund now totals $75.4m. The fund aims to help low-income Africans access affordable, high-quality health services while providing investors with good long-term financial returns. It has invested in hospitals in Kenya and Ghana.
Shakir Merali, Partner at Aureos Africa Healthcare Managers Limited in Kenya, says: “Avenue has developed strong links with the Kenyan business community that are helping to bring health cover to a wider range of workers, even those who work in smaller firms. We are looking forward to helping the Group to pursue its plans for growth and to extend its successful model and high quality care, initially within Kenya, and eventually in neighbouring East African countries.”
Diana Patel, Executive Director at The Avenue Group, comments: “We are very pleased to be working with an investor with such extensive experience of the medical sector. The support from Aureos’ strong local team will be crucial in helping us to achieve our ambitions to make affordable health cover a reality across the whole of East Africa.”
Aureos was set up in 2001and has increased funds under management to US$ 1.3 billion with a footprint in over 50 emerging markets covering Asia, Africa and Latin America, by establishing 17 regional private equity funds. - InReturn Capital invests in Kenya's Eagle Eye Laser Centre 3 November 2011
East African venture capital firm InReturn Capital (www.inreturncapital.com) has entered a partnership with Hurlingham Eye Care Services group (HECS – hurlinghameyecare.co.ke), according to a press release issued on 2 November. InReturn Capital is an impact investing company which aims to generate positive social impact and profits by investing in small and medium enterprises (SMEs) in the East African region, from its offices in Nairobi, Kenya and Dar es Salaam, Tanzania. It has Jacana Venture Partnership (www.jacana.org) as an investor and key partner in fund management, and several Dutch and international partners.
HECS has been operating optical shops and a diagnostics centre around Nairobi since 2000 and in April 2010 opened the Eagle Eye Laser and Diagnostics Centre at the 5th Avenue Building on Ngong Road, close to the Nairobi Hospital. This aims to be a leading provider of eye-care surgery and diagnostics in East Africa, particularly long-term eye problems. The centre is the first clinic in East Africa to offer Lasik surgery, which is the most advanced type of laser surgery for vision correction. Other eye surgeries include cataract, glaucoma, multifocal refractive surgery, as well as a broad variety of eye diagnostics using modern technology. The founders, Dr. Ilako, Dr. Kimani and Dr. Kiumbura, all have a long track record in eye surgery and have teamed up with Dr. Gaeckle, one of the most successful and experienced eye laser surgeons in Germany.
InReturn already has investments in construction, infrastructure and energy and is keen to expand into healthcare. It linked with HECS in July 2011. It provides hands-on support to HECS in strategic focus, human resource management and marketing and financial administration processes, as well as joining weekly management meetings and being a member of the board. Its investment in the surgery centre will assist in expanding and improving operational capabilities while the centre prepares to expand within the region. The plan is also to set up a non-profit unit that will provide free eye-care health services such as free surgeries and consultations to the lowest income groups.
Dr. Kiumbura, CEO and co-founder of HECS commented: “There is a saying in my language that two are always better than one. The partnership with InReturn has just proven this to be true one more time! It has been a time of improvement in the organisation, from personal growth to organizational transformation, and to a more efficient and focused entity from the time we started working together. I have no doubt in my mind that together we will grow to unchartered heights in provision of quality affordable eye-care in this region in the coming years.”
Eelco Benink, Investment Manager of InReturn commented: “We are excited to invest in this state-of-the-art eye-care institute in Kenya. The doctors are amongst the best in their field and the technology available at the Eagle Eye Laser Centre is unparalleled in East Africa. Together with the optical shops it forms the only one stop shop for eye health care in greater East Africa. Our partnership will lead to further expansion of the HECS group, and it will contribute to the growth of quality medical industry in the region.”
Other InReturn investments include Vipingo Stone, Equator Shipping on Lake Victoria and an engineering company developing micro hydropowerplants. - African Venture Capital Association (AVCA) to provide PE data 2 November 2011
** Save the date: AVCA’s 9th conference will be in Accra, Ghana, from 22-24 April, with extra days for GP and LP training (announced today 2 Nov). More details will be available soon **
The African Venture Capital Association (www.avca-africa.org) and Cambridge Associates (www.cambridgeassociates.com), a global provider of independent research and investment advice, have agreed to work together to provide extensive, independent aggregate African private equity and venture capital benchmark data and statistics to AVCA members and other industry participants.
The 2 organizations will issue quarterly performance data which will include African PE and VC industry returns, compared to other market indices. Returns data will be aggregated to protect the confidentiality of individual funds and their underlying portfolio investments. Vintage year returns and aggregate portfolio returns by industry will be reported where the sample size is sufficiently robust to allow disclosure without compromising confidentiality. Cambridge Associates has been advising institutional and private clients on alternative assets since the 1970s and derives its PE and VC benchmarks from financial information in its proprietary database of institutional-quality PE and VC funds, one of the largest such data repositories in the world.
Michelle Kathryn Essomé, AVCA CEO (see below), commented in a press release: “AVCA is absolutely committed to promoting the dissemination of robust, reliable data on private equity and venture capital in Africa. We are thrilled to collaborate with Cambridge Associates, as they have demonstrated the necessary technical expertise, knowledge of the continent, and global track record to meet this objective. I am confident that this will help promote additional transparency and independent benchmarking to the benefit of all industry stakeholders.”
Cambridge Associates will provide the data to AVCA as a service to its members and the global PE and VC industry overall. Cambridge Associates works closely to grow its coverage of the emerging markets PE and VC industries with the international development institutions that are major limited partners in these markets, and also partners with the Emerging Markets Private Equity Association (EMPEA).More awareness
Ralph Jaeger, senior research consultant and co-head of international private equity and venture capital research at Cambridge Associates said: “We are delighted at the opportunity to work with AVCA to broaden and deepen the industry’s awareness of private equity and venture capital in Africa. Cambridge Associates continuously seeks to expand our manager research coverage to create benchmarks that can serve as valuable tools for the industry. Assessing the attractiveness of private equity and venture capital in Africa will allow investors to better identify local and regional investment opportunities.”AVCA and Cambridge Associates
AVCA is a non-profit association whose aim is to promote, develop and stimulate private equity and venture capital in Africa through research, advocacy, training, networking and the dissemination of industry best practices. It was established in 2002 and today represents African private equity and venture capital firms, institutional investors, foundations, international development institutions and global professional service firms, amongst others. AVCA.
Cambridge Associates was founded in 1973 and gives investment consulting, independent research and benchmarks, performance-reporting and outsourced portfolio solutions, across all asset classes, to over 900 institutional investors and private clients worldwide. It has more than 200 professionals dedicated to consulting, research, and performance reporting on alternative assets and compiles performance results for more than 4,400 private partnerships and more than 60,000 portfolio company investments to publish its proprietary private investments benchmarks.AVCA’s new CEO
The African Venture Capital Association (AVCA) announced the appointment of Michelle Kathryn Essomé as its CEO in September, in a press release. She has nearly 20 years of investment-banking experience and has held a range of marketing and origination roles in equities, fixed income, corporate finance and investment management with Merrill Lynch, Goldman Sachs, JPMorgan, Lehman Brothers and Nomura. Michelle holds an MBA in Finance from Columbia Business School, where she was a Robert F. Toigo fellow, and a BBA in Finance from Howard University. She has worked in the US, UK and France and is fluent in French. She commented: “This is an incredibly important time in the development of the African private equity industry and AVCA has a crucial role to play in supporting GPs and promoting the asset class. I am absolutely delighted to be able to harness the support of the African GP community, our DFI partners and peer associations to build a strong, member-centric association.”
“As CEO, my commitment is to ensure AVCA provides consistent, high value services to our members and acts as a catalyst for the development of private equity in Africa.”
AVCA, which is co-chaired by Tshepidi Moremong, also welcomes 2 new prominent members to its board. Runa Alam has joined the board as a co-Chair. She is a co-founding partner and CEO of Development Partners International LLP. Simon Walker has been appointed a Special Advisor to the board. Simon was CEO of the British Private Equity & Venture Capital Association (BVCA) from 2007 to 2011 and was recently appointed as the Director General of the Institute of Directors. For more details of their backgrounds, see the press release.Working with BVCA
In August, AVCA entered into a memorandum of understanding (MoU) with BVCA to boost the implementation of its re-launched strategy across Africa, according to a report on www.privateequityafrica.com. AVCA is to get technical support from the BVCA including expertise in training African private equity fund managers and other professionals. AVCA will also be able to increase training to pension funds and other institutional investors and to encourage local institutional participation, an initiative supported by the Commonwealth Secretariat.Private equity in Africa
According to AVCA: “Private equity in Africa has a very important role to play in building better, more sustainable companies, creating jobs and delivering genuine economic growth. The continent’s burgeoning middle-class combined with a growing consumer base and greater political stability is making Africa an attractive investment destination.
“Average economic growth in the region reached 5.8% between 2000 and 2008, more than the global average of 4%, driving interest from global private equity houses. In the first half of this year, US$1.1bn was raised by Sub-Saharan African funds.” - OPIC invests $285m in 6 impact investing funds 31 October 2011
The Directors of the U.S. Government’s development finance institution, the Overseas Private Investment Corporation (www.opic.gov), decided on 27 October to provide financing up to $285 million to equity funds. These in turn should raise more than $875m, representing the largest commitment by the U.S. Government to impact investing in emerging markets so far.
“Impact investing” usually means private investing looking for investments that deliver social and environmental benefits while generating profits, and is a very fast-growing area of investment. OPIC called for impact investing proposals in March and received 88 applications from which it picked 6 funds. According to a OPIC press release, the response was “so positive that OPIC expects to announce additional approved facilities in 2012.”
OPIC President and CEO Elizabeth Littlefield commented in the press release: “This is a watershed day in the evolution of impact investing. These new funds, and the additional investment facilities we announce in 2012, will help to fill financing gaps and introduce more innovation into the impact investing space, helping it grow and mature.”
The 6 funds are:
Investment Fund for Health in Africa II (IFHA II): A private equity fund investing in companies that improve health for Africans with low and middle incomes. It expects to target investments in companies that operate in small and medium-sized hospitals and clinics, healthcare products import, distribution and manufacturing, insurance and supporting industries such as water and sanitation, food and nutrition, education and environmental services. The fund manager is Africa Health Systems Management Company B.V. The International Finance Corporation in 2007 invested in the Netherlands-based IFHA I. OPIC: $83m, target capitalization: $250m.
ManoCap: This fund will invest in small and medium enterprises (SMEs) in Sierra Leone, Liberia and other West African countries, with a focus on post-conflict nations. It will invest in sectors including agriculture, agro-processing, sustainable fisheries, services, healthcare, sanitation, construction and building materials, tourism, light manufacturing, and financial services. These SMEs are expected to have a direct effect on the standard of living of “base-of-the-pyramid” communities by providing employment and access to goods and services. Fund manager is ManoCap LLC. OPIC: $34m, target: $100m.
Latin Idea: Growth capital to Mexican SMEs within the technology, media, telecomms and services sectors. Fund manager Latin Idea Ventures III LLC. OPIC: $25m, target: $125m.
MPOWER Ventures: Unbanked and the under-banked populations in emerging markets through providing prepaid debit cards (or GPR cards), and related alternative financial services, starting with Mexico, Brazil, Colombia, Peru and Bolivia. Fund manager MPOWER Ventures III L.P.,OPIC: $15m, target: $50m.
Sarona: Fund-of-funds will invest in 12-18 private equity funds that target market-based returns while investing in SMEs in frontier markets. Fund manager Sarona Asset Management, Inc. OPIC: $87.5m, target: $250m
Terra Bella: Private equity fund will invest in projects that generate carbon credits through protecting and enhancing forests while generating valuable social and environment co-benefits. Terra Bella will generate returns through the sale of carbon on the growing voluntary, compliance and pre-compliance markets that are emerging in the forest and land-use carbon sector. Fund manager Terra Global Investment Management LLC. OPIC: $40m, target: $100m.
According to Ms. Littlefield: “Each of them promises a strong development impact —be it mobile banking for the unbanked, investing in small businesses in the post-conflict countries of Liberia and Sierra Leone, improved health care in Africa, preservation of highly vulnerable forests, or growing small businesses in Mexico. OPIC has a long history of investing for both social and financial returns and we believe impact investing will gain significant traction in the coming years. We are proud to support its development.”