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Weekly Wrap, March 28th, 2016; Duet, AfricInvest, Synergy Capital make private capital news last week

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Last week in brief…March 28th, 2016

In private equity deal news in Africa last week, London-headquartered Duet Group, the alternative investment management firm with more than $5 billion in assets is paying $18.6 million for an undisclosed minority stake in Kenya’s Fidelity Commercial Bank. The deal is being done through Duet’s East African Financial Holdings entity and the capital injection will be used to help Fidelity achieve its regional expansion ambitions. The investment gives Duet a strong platform to invest in Kenya’s banking sector which Henry Gabay, Duet’s Co-Founder and CEO sees as being ripe for consolidation.

On the western side of the continent, meanwhile, Synergy Capital Management closed its sixth investment for its first $110 million fund, taking an undisclosed stake in Suburban Fiber Company, a broadband provider that delivers content products and services to residential customers in Abuja and Lagos. The capital has been earmarked for investment plans in the firm’s technology platform as well as for content development and service marketing initiatives to attract new customers to its services.

In Zimbabwe, AfricInvest is joining forces with MicroCred to acquire microfinancier MicroKing from the country’s  Deposit Protection Corporation, which liquidated MicroKing’s parent company, Afrasia Bank Zimbabwe, in February last year.  It’s expected that this investment will be followed by an additional capital injection plan funded by both of MicroKing’s new shareholders in order to provide the institution with the means to properly execute its strategy. The liquidity challenges at AfrAsia Bank Zimbabwe had a serious impact on MicroKing, forcing it to curtail its lending operations.

Impact investor Investisseurs & Partenaires announced an undisclosed capital commitment to Teranga Capital, an equity impact fund which will target deals ranging from €75,000 to €300,000 in promising businesses in Senegal. Teranga Capital, which is the third fund backed by I&P’s impact fund-of-funds, IPDEV2, manages €5 million, and counts several Senagalese institutional and private investors among its supporters, including the Sovereign Fund for Strategic Investments (FONSIS) and SONATEL. This is the third fund backed by I&P, which aims to invest in ten impact funds in ten African countries over the next 10 years.

Abraaj’s Growth Markets Healthcare Fund, which is currently  being raised, landed a $25 million commitment from the African Development Bank for African healthcare investments. The fund, which has a hard cap of $1 billion, will target opportunities driven by the expanding demand for healthcare services from Africa’s growing middle class and rapidly urbanizing population, improving the quality of healthcare infrastructure and healthcare services.

In portfolio company news, Endeavor Energy, the Denham Capital-backed power generation firm, has received approvals to begin development of a gas-fired power station in Côte d’Ivoire and is looking to source $900 million to finance the project. According to Reuters, the company’s CEO is confident in finding an “over-supply of financing” for the project.

We found a couple of interesting pieces on the investment plans and strategies of firms on the continent last week. According to South Africa’s Business Day, Tiso Blackstar, the investment company that emerged from the merger of Blackstar plc and Tiso Investment Holdings in 2015, looks set to hone its focus on the media sector and start divesting itself of non-media assets in a range of sectors including the financial services, healthcare and industrial sectors. The move will allow the investment company to build value through a concentrated approach rather than risk dilution that can occur with a multi-sector strategy.

And in another indication of the rising interest in Africa from Islamic financiers, China-Africa Fund, the Beijing-based private equity firm, and the Islamic Corporation for the Development of the Private Sector signed a Memorandum of Understanding to explore and execute co-financing and co-investment opportunities in up to 19 countries on the continent.

As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.

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