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Weekly Wrap, November 2nd, 2015; Adenia Partners, Synergy, UTIMCO and others make private capital news

Image Credit: US AID

Last Week in Brief…November 2nd, 2015

There were a number of private equity and venture capital deals in Africa last week, but true to form, getting more detailed information on the terms of the transactions proved difficult. Synergy Capital, the new-ish West African private equity firm, announced its investment in Riggs Ventures West Africa, a Nigerian manufacturer of polypropylene sacks that are used for packaging and transporting industrial goods.

The transaction is the third for Synergy’s debut private equity fund which held a final close in September with more than $100 million in capital. It seems that the pace of investment from the fund is set to accelerate as there’s talk of the fund doing another deal before the end, with an additional three or four targeted for 2016.

News of two solar power sector deal also caught our attention last week. In their first international investment, DBL Investors, the San Francisco-based venture firm lead a $25 million series C round in Off Grid Electric, a much-talked about distributor of solar power in Tanzania, where it operates under the M-Power brand. The company is installing solar power in 10,000 homes and small businesses every month at the moment, and has an agreement with Tanzania’s government to complete 1 million installations within the next 3 years. It is also exploring opportunities in neighboring Rwanda.

In the second solar-related deal of the week, non-profit venture firm Acumen is teaming up with a number of others to invest in Devergy, an energy services provider based, like Off Grid, in Tanzania. The company provides what it calls village-sized, solar powered micro-grid electricity to homes and small businesses.

Adenia Partners was the only private equity manager to report an exit last week–in actual fact they announced two. In the first, they exited ownership of the Hotel du Louvre, a 4-star property in Antananarivo, the capital Madagascar which they had owned since 2006. The sale, for an undisclosed price, was made to a family group. The second exit they reported last week actually closed in August; Newpack, a packaging provider in which they took a 75% stake in 2008, was sold to the management of the firm, again without terms being disclosed.

In fund news, a number of notable bits of news caught our eye. Bamboo Finance and Louis Dreyfus Holding announced the launch of a $50 million impact fund that will target small and medium-sized agribusinesses. They expect the fund to have its final close in mid-2017. Sanari Capital, the South African private equity firm, is launching a R200 million ($14.7 million) generalist, country-focused small-cap fund which it will market to a mix of high net worth individuals, family offices and institutional investors. Look for a first close at R100 million in mid-2016. On a much larger scale, Nigeria is planning to raise a $25 billion infrastructure fund, tapping domestic institutional investors as well as those from overseas. And UTIMCO, the $36 billion university pension fund from Texas is looking to gradually increase its exposure to Africa private equity, looking for new partners as it goes.

To finish up this week, a riposte to the speculation caused by a report from a UK think tank, the Overseas Development Institute, where a number of commentators concluded that the private equity market in Africa is starting to bubble. A timely reminder of the nuances of private equity investing 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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