The African Development Bank’s Board of Directors approved a commitment of 20 million euros, or approximately $21.7 million, to private equity firm AfricInvest’s third fund. AfricInvest III, which was targeting 200 million euros, is planning to invest growth equity in midcap companies on the continent, creating a group of regional champions. The fund aims to source deals across Africa in a number of sectors that are expected to see rapid growth, including manufacturing, agribusiness, healthcare, financial services, energy and consumer goods.
The commitment forms part of the fund’s second and final closing for the fund, which saw participation from a number of investors, mostly DFIs but also some private investors, in AfricInvest’s first two funds.
The fund’s strategy is to invest in high-potential mid-sized companies in sub-Saharan Africa, a significant but under-invested sector on the continent. As in other geographies, mid-sized companies are the backbone of commercial and industrial activity in Africa, but remain a sector ignored by larger private equity funds or microfinance investors. By enhancing investee companies’ corporate governance, sales and marketing strategies and skills transfers as well as providing capital, AfricInvest aims to build a portfolio of significant value.