Last week in brief…June 29th, 2015
The last week saw quite a bit of Africa-related private equity, venture capital and infrastructure deal and fundraising activity. The most interesting, we thought, was the report in Bloomberg Briefs about Vital Capital‘s plans to raise $500 million for its second impact investment fund. Vital Capital Fund II will make between 10 and 20 investments across a number of countries in sub-Saharan Africa, focusing on opportunities in affordable housing, agriculture, water, education, healthcare and clean energy. The hard cap for the fund has been set at $700 million. That’s a significant chunk of change to be sure, and would rank among the largest Africa-dedicated funds raised to date.
Helios Investment Partners and RMB Corvest cropped up more than once in exit news last week. The sale of Continental Outdoor Media to the partnership of JCDecaux, the French outdoor media company, and Royal Bafokeng Holdings, the investment firm, was finally completed. Terms of the deal and returns for Helios, The Rohatyn Group and RMB Corvest went unreported. Meanwhile, Helios continued to reduce its shareholding in Kenya’s Equity Group by selling 90 million shares or 2.44% of its stake to Uganda’s National Social Security Fund for approximately $45 million. Earlier this year, the Africa-focused private equity fund sold a significantly larger proportion, some 12.2% of its holding, to Norfininvest, a company owned by Norfund and Norfinance. Helios still owns almost 10% of the company, in which it made its first investment in 2007. The returns look to be significant, given that it originally invested approximately $109 million (at current rates) for a 24.45% stake in the banking group.
In other deal news, Kagiso Tiso Holdings spent $82 million to acquire a 51% stake in facilities management company, Servest. The deal, which values the group at approximately $370 million, provides RMB Corvest with a partial exit from its investment which it originally made in 2006, generating an IRR in excess of 20%, according to Business Day. And Boston-based Spark Capital led the Series A round for Andela, the computer education startup which first opened its doors in Lagos last year. A number of the startup’s seed investors, including Omidyar Network and Learn Capital, participated once again in this latest financing round.
Egypt has agreed to commit $100 million to Africa50, the African Development Bank-led Infrastructure Fund initiative to help plug the huge infrastructure gap on the continent. Egypt’s investment brings the total amount of commitments to $600 million so far. If you remember, the initial goal is to reach $3 billion in order to build credibility with investors, and allowing the fund to scale significantly after that.
The big news out of Washington last week was that the U.S. Congress finally passed legislation renewing AGOA or the African Growth and Opportunity Act for another 10 years. The 15-year old law, which provides African nations with duty free access to US markets for certain goods, had been due to expire in September, and Congress had seemed to be dragging its heels over its renewal. And in South Africa, Hedge Funds now have only three months left before the deadline to register with the Collective Investment Schemes at the Financial Services Board expires. Business Day reports that none of the 122 hedge funds in the country has submitted the required application so far, a major frustration for the regulator.
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.