Convergence Partners announced the final close for its Convergence Partners Communication Infrastructure Fund (CPCIF) at $200 million last week. The fund, which started raising in 2013, reached its goal with the help of final capital commitments from the Public Investment Corporation (PIC), manager of South Africa’s Government Employees Pension Fund and an as yet unnamed “international commercial investor.”
The fund is the largest fund dedicated to ICT infrastructure investments in Africa. Along with Convergence Partners (as sponsors), the fund received earlier commitments from a number of DFIs including the International Finance Corporation, the European investment Bank, the Dutch Development Bank (FMO), the Development Bank of South Africa and the CDC Group.
The fund plans to invest in opportunities across the ICT infrastructure spectrum on the continent, providing people and companies with better access to technology as well as communication and broadband services. According to some reports, Convergence CEO Brandon Doyle says that market demand for broadband and related services is exploding across the continent. Citing Ericsson’s Mobility report predictions that the Internet of Things will push the number of devices in use globally from 6 billion in 2014 to 16 billion in 2020, he told Nigeria’s Business Day that Africa must have reliable, ubiquitous broadband if it too is to participate in the benefits.
Commenting on the close, Adile Ngcaba, Chairman and Founding Partner of Convergence said, “We believe the current fund size is well suited to the scale of infrastructure investment opportunities we are seeing across the continent, including fibre, data centres, wireless/spectrum, fintech and ICT platforms that enable e-learning and broadcast and media.” The fund has a strong pipeline of potential deals, particularly in West Africa where Convergence plans to open a local office in Nigeria.
The fund has already made a number of investments—Comsol Wireless Solutions, a wireless network deployment company, FibreCo, a South African long-haul network as well as Synergy Communications, a platform company which holds two leading corporate ISPS, Skyband in Malawi and IS Mozambique.