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Weekly Wrap, May 18th, 2015; Brait, AIIM, AfDB and more make private capital news

Last week in brief…May 18th, 2015

South African investment firm Brait SE spent approximately $1.2 billion of its war chest to buy a 90% stake in UK-headquartered retail chain New Look. The deal provides Apax Partners and Permira with exits from their stakes in the company, which they originally acquired in 2004. Sources told the Financial Times that the transaction provides the private equity returns more than four times their original investment. With over 550 of its 800 stores based in the UK, the deal gives Brait a substantial position in the country’s ultra-competitive fashion retail market, as well as a platform to support its planned growth strategy elsewhere, in particular China. 

The African Development Bank has announced that is making a $50 million investment in CEC Africa Investments (CECA) in a combined equity/convertible debt deal, marking the DFI’s first equity investment in a power company with interests across Africa. To date CECA has been capitalized with assets from CEC plc in excess of $100 million, and is looking to be capitalized to the tune of $500 million within three to five years. In March last year, Standard Chartered Private Equity invested $57 million in Zambian Energy Corporation, a controlling shareholder of CEC plc, in a deal that equates to a 26% stake in CEC plc.

A couple of planned private equity fund raises made the news last week, although neither announced targets for their planned funds. Old Mutual and Macquarie, both backers of Africa Infrastructure Investment Managers, look set to join forces once more to back a second fund. The fund will likely launch in the third quarter of this year. And Databank Group, the Ghanaian private equity and asset management firm, is planning to raise a buyout fund that will target agricultural and financial services opportunities in the West African country.  Last May, Databank closed a $36 million fund which took stakes in a poultry producer in Burkina Faso, a bakery in Nigeria and a juice factory in Zimbabwe.

In what is Kenya’s largest startup acquisition to date, financial services company afb has acquired Weza Tele for $1.7 million. The mobile solutions company, which was incubated by Nailab, provides services in a number of countries, including Kenya, Nigeria, Tanzania and Zimbabwe. In other exit news, Bloomberg reports that Standard Chartered Private Equity has asked advisors to recommend potential exits from its private equity portfolio in Asia, the Middle East and Africa. The move forms part of the company’s overall strategy of scaling back its activities following two years of slow growth and lower profits.

Finally, a useful summary of the eight candidates currently vying to take over as President of the African Development Bank from Donald Kaberuka, whose second five-year term comes to an end this month. It profiles each of the candidates and highlights their vision of where the development institution needs to go.

Read more on these and other stories by clicking through to the complete issue of this week’s Africa Capital Digest.

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