IFC invests $10 mn in East Africa’s Catalyst I private equity fund

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.

2 Responses to “IFC invests $10 mn in East Africa’s Catalyst I private equity fund”

  1. Rachel Kasumba

    Tom, thanks for the article.

    Emerging and mid-size companies face a lot of challenges when looking for funding to start, grow, and expand their businesses, especially from private investors and commericial banks.

    Having access to private equity money as above will encourage more investment in these companies thereby creating more opportunities for a lot of related businesses. These kind of investments should be encouraged by the governments to supplement other sources of financing.

  2. Tom Minney

    It is great that there is more focus on supporting the growth of emerging and mid market companies. They are the main job creators in economies and the more streamlined the finance can be, the better.