Enko Capital Management has held a second and final close for Enko Africa Private Equity Fund at $83.25 million, garnering commitments from PROPARCO, the French government’s development finance institution through its investment arm FISEA, and a mix of European family offices and high net worth investors managed by Massena Partners.
The fund, which is Enko’s debut private equity vehicle, held a $48.25 million first close in April 2014, receiving cornerstone commitments from the African Development Bank and Soros Brothers Investments as well as a number of institutional, family office and high net worth investors.
EAPEF, which is targeting African capital markets as the primary exit route for its investments, will look to make growth capital deals in late-stage private companies that have the potential to be listing candidates within 4 to 5 years of an investment. Enko’s research shows that listing multiples in many African markets compare favorably with the typical exit multiples delivered through trade sales due to the undersupply of investible equities available to local institutional investors. The 8-year fund is targeting an IRR of 25%
Approximately half the capital will be reserved for investments in West Africa, where Enko enjoys a strong network, while the balance will be spread across opportunities in Central, East and Southern Africa.
While the fund plans to make investments across a variety of sectors, more emphasis may be given to sectors the firm has a close understanding of, in particular agriculture and financial services, as well as those which have a stronger appeal to the IPO markets, for example retail and FMCG. The fund anticipates making between 7 and 8 deals, averaging approximately $10 million to $12 million in size.
To date, the fund has made one transaction, an undisclosed investment for a minority stake in Madison Financial Services, a Zambian financial services group, which was announced in March 2015.