Agri-Vie, the South African private equity investment fund, and STANLIB, the Pan-Africa asset manager have teamed up in a 50/50 partnership to launch EXEO Capital to manage current and potential future private equity vehicles in strategically selected sectors. EXEO Capital’s investment team is made up of Agri-Vie professionals who will continue to manage the funds while benefiting from a partnership that allows each firm to expand their alternative investment offerings.
In the press release announcing the partnership, the firm’s Co-Founder and Managing Partner Herman Marais stated “We have found a strategic partner in STANLIB who shares our investment philosophy and will enable us to accelerate the growth and strategic diversification of our Africa private equity business, while retaining ownership and management control as an independent investment manager.”
This partnership adds private equity to STANLIB’s alternatives offering which includes Infrastructure, High Yield Credit and Direct Property investment capabilities. According to the asset manager’s Chief Investment Officer for Alternatives, Patrick Mamathuba “This transaction is an ideal fit that will enable us to continue delivering on our investment promise to customers. It strengthens our existing capabilities and introduces new ones where we believe there will be strong future demand based on global trends.”
The harvesting phase of Agri-Vie’s $100 million first fund, which has been fully deployed in companies in Eastern and Southern Africa, will be managed by the EXEO Capital team in addition to the raising and management of Agri-Vie’s planned second fund which is expected to hold a $75 million first close early in the second quarter.
Agri-Vie II, a 10-year fund which is looking to raise $175 million with a hard cap of $200 million, will build on the success of Fund I, targeting investments in the agribusiness and food value chain and aiming to deliver investors a 2.5x return in US dollar terms on a net basis. The mix of investors will likely be similar to the investor mix in Agri-Vie’s first fund, with 35% to 40% of the capital being committed by private sector investors and family offices and the balance being provided by development finance institutions.
While 55% of the first fund was deployed into Sub-Saharan Africa, Mamathuba expects that three-quarters of the next fund will be earmarked for investments outside of South Africa. In addition to opportunities in East and South Eastern Africa, it is expected that deals will be also be sourced in West Africa over the life of the fund.
For future private equity vehicles, EXEO may look at opportunities outside the investment focus of its first two funds, tapping into the dominant growth trends in markets in Sub-Saharan Africa, especially in consumer-related sectors.
“EXEO Capital will consider opportunities beyond the food and agri sector as it completes its current commitments to fund investors in this sector,” said Herman Marais. “Adjacent sectors also aligned with the consumer development process in Sub-Sahara Africa will be logical areas of interest, such as other FMCG, household goods and logistics.”
Bowman Gilfillan provided legal advice on the partnership formation.