April 10th, 2017
The  weekly roundup of Africa's Private Capital news


  

As many of our readers live and work in countries that have a public holiday next Monday, we have decided to publish next week's edition of Africa Capital Digest a day later than usual. So be on the look out for you next issue on Tuesday, April 18th. We'll be back to our regular schedule the following week.

As always, we'd be delighted if you shared it with any interested colleagues and/or business partners.  If they would like to receive their own weekly copy, they're more than welcome to sign up here. 

Finally, if you have any tips, suggestions or questions, please reach out to Allan Cunningham at acunningham@africacapitaldigest.com
This week's issue supported by...             
AFC Live 2017
The Week in Brief...
Once again, private equity fund raising hogged the limelight in Africa's private capital markets last week. It seems the continent is in step with the global trend in fund raising, which has got off to a quick start this year. While a nice challenge, how and where to put all this fresh capital to work is sure to press on the continent's investment professionals.

The biggest fund announcement of the week referenced a final close that took place at the end of February. The Momentum African Real Estate Fund or MAREF, a joint venture between Momentum Global Investment Management and Eris Property Group, landed a total of $170 million in commitments from eighteen investors including pension funds, institutions and family offices.

The fund, which was launched in 2014, is targeting a net IRR of 18% for its investors by building an investment portfolio of office blocks, shopping malls and warehouses in sub-Saharan Africa, excluding South Africa. So far, the fund has made three commercial real estate investments in Mauritius and Ghana which between them represent a commitment of some 23% of the fund's capital. MAREF aims to make between three and five investments annually over the course of its investment life span, typically deploying $30 million to $50 million in capital for each deal.

Danish private equity firm Frontier Investment Management has held a $116 million first close for its second fund. Several European development finance institutions made commitments to the fund as well as a foundation and a number of ultra-high net worth investors. Of the DFIs, the UK's CDC and European Investment Bank's GEEREF, are re-upping from the first fund, while FMO, Proparco, Swedfund and the Development Bank of Austria are participating for the first time.

Frontier Energy II hopes to end up with $200 million for its planned final close in early 2018. The new fund will back greenfield renewable energy projects across the sub-Saharan region, with a goal to its investors an IRR in excess of 20%.

Cauris Management, a private equity fund that predominantly backs opportunities in francophone West Africa, is part of the winning Yeelen Capital Consortium that has been selected by the West African Development Bank to raise and manage the Yeelen Financial Fund. The planned €150 million fund will focus on financial services sector opportunities in the WAEMU region.

Yeelin Capital, the fund's manager, will be staffed by an investment team from Cauris Management, led by Benjamin Kouakou, a Partner and director of the firm. As well as investment services, the team will provide the fund manager with ESG support reporting and back office services. Yeelan Financial Fund's strategy will be to make investments ranging from €2 million up to €11 million in size in companies at all stages of development in the counties in the WAEMU. 

Meanwhile Incofin, a Belgian investment management firm that advises and manages funds that back microfinance institutions in developing countries, has announced additional commitments from new investors, enabling the fund to reach $140 million in aggregate capital in an interim close. The new investors, which count AXA Investment Managers, KBC Pensioenfonds and Korys among their number, have committed an additional $27 million between them to the third-generation fund, which was launched in 2015.

The final piece of fund raising news concerns an equity commitment to a new fund by the IFC. The DFI's Board of Directors is expected to meet in the middle of May to consider a potential capital commitment of $25 million to LeapFrog Emerging Consumer Fund III,  LeapFrog Investment's latest fund which will look to back mid-market growth capital opportunities in Africa as well as South and South East Asia.

Actual transactions, while sparse, were interesting, nonetheless. African Rainbow Capital is taking a 20% stake in A2X Markets, the nascent South African stock exchange. While terms of the deal were not disclosed, ARC has an option to expand its holding bu another 5% once A2X secured its exchange licence. Hardly had the deal been announced before that milestone was achieved. A2X, which is one of three new stock exchanges launching in South Africa this year, aims to become operational in the final quarter of 2017.

After 40 years, Centum Investments is exiting its stake in Kenya Wine Agencies Limited or KWAL in an undisclosed deal. The Kenyan investment firm is selling its 26.43% stake in the wine and spirits manufacturer and distributor to South Africa's Distell Group. Centum first backed KWAL in 1977 since when the company's enjoyed steady growth. In 2016, KWAL sold more than 8 million litres of alcoholic beverages and today, its portfolio of brands includes several well-known names including Kibao, Kingfisher and Caprice.

And Kibo Capital has made its first PIPE deal for its second fund, acquiring a stake in the Rwandan business of long term partner, I&M Bank. The transaction, which took place via an IPO on March 31st on the Rwandan Stock Exchange, was more than twice oversubscribed by a pool of local and international investors. Kibo Fund II's investment, whose size remains undisclosed, was apparently the largest of the offering. 

Will the Trump Presidency be good for Africa? In a piece for New African Magazine, Aubrey Hruby argues that, contrary to expectation, the Trump Administration might be a blessing in disguise for the continent. She believes that there's a strong possibility that relations between Africa and the USA might take on an even greater importance during its term in office.

And finally, the Financial Times writes about high-profile financial services investor A tlas Mara's plans to regain the initiative. Macroeconomic factors and adverse currency shifts have pummeled Atlas Mara's profits in the last year, but through a combination of cost savings and a focus on fintech opportunities, the company is looking to double its earnings in the coming year.

As always, you can review these and other stories by scrolling down and clicking through to them below.  

Wine
Centum sells Kenya Wines and Liquors stake after 40 years
Deals News...
Private Equity
African Rainbow Capital takes 20% stake in A2X
African Rainbow Capital is taking a 20% stake in A2X Markets, the nascent South African stock exchange. Terms of the deal were undisclosed, but the BEE investment company, which plans to list as an investment holding company on the Johannesburg Stock Exchange later in the year, has retained the option to raise its equity stake to 25% once A2X secures its exchange licence.
Private Equity
Kibo backs I&M Rwanda in debut PIPE deal
Making its first Private Investment in Public Equity or PIPE deal for its $63 million second fund, Africa-focused private equity fund manager, Kibo Capital Partners, has announced that it has acquired a stake in the Rwandan business of long term partner, I&M Bank. The transaction, which took place via an IPO on March 31st on the Rwandan Stock Exchange, was more than twice oversubscribed by a pool of local and international investors. Kibo Fund II's investment, whose size remains undisclosed, was the largest of the offering.
Funds & Fundraising...
Private Equity
Momentum's Africa Real Estate Fund closes with $170mln
The Momentum African Real Estate Fund or MAREF, a joint venture between Momentum Global Investment Management and Eris Property Group, held a final close at the end of February, garnering a total of $170 million in commitments from eighteen investors including pension funds, institutions and family offices.
Private Equity
Frontier hits $116mln for its second fund's first close
Frontier Investment Management, a Danish private equity firm that invests in and develops renewable energy projects in sub-Saharan Africa, has held a $116 million first close for its second fund. Frontier Energy II will pursue a similar strategy to its predecessor fund, the €60 million DI Frontier Market Energy and Carbon Fund, which is now fully deployed in six investments which will generate 139MW from a mix of hydro, solar and geothermal power projects in East Africa.
Private Equity
Cauris consortium wins €150mln fund mandate
Cauris Management, a private equity fund that predominantly backs opportunities in francophone West Africa, is part of the winning Yeelen Capital Consortium that has been selected by the West African Development Bank to raise and manage the Yeelen Financial Fund. The planned €150 million fund will focus on financial services sector opportunities in the WAEMU region.
Private Equity
Incofin holds $140mln interim close for agRIF fund
Incofin, a Belgian investment management firm that advises and manages funds that back microfinance institutions in developing countries has announced additional commitments from new investors for its agRIF fund, enabling the fund to reach $140 million in aggregate capital in an interim close. The fund aims to help smallholder farmers in Africa, Asia and Latin America gain access to much-needed financial services.
Private Equity
IFC mulls $25mln commitment to LeapFrog III
The IFC's Board of Directors is expected to meet in the middle of May to consider a potential capital commitment of $25 million to LeapFrog Emerging Consumer Fund III, a 10-year closed-end fund that will look to back mid-market growth capital opportunities in Africa as well as South and South East Asia.
This week's issue supported by...             
Projects & Portfolio Companies...
Consumer
Centum exits KWAL in stake sale to Distell
After 40 years, Centum Investments is exiting its stake in Kenya Wine Agencies Limited or KWAL in an undisclosed deal.  The Kenyan investment firm is selling its 26.43% stake in the wine and spirits manufacturer and distributor to Distell Group. The deal gives the JSE-listed drinks company a majority stake in KWAL, following its acquisition of a 26% stake in the company in 2014.
Policy, Regulation & Compliance...
Policy
China's role as capital exporter offers opportunity
As investment growth slows within China, the country's evolving to become a major exporter of capital. In the Financial Times , David Dollar and Astrid Hass urge African governments to actively position themselves to take advantage of this shift.  
Regulation
Competition law enforcement developments across Africa
An overview of some recent developments in the enforcement of competition regulations in various African jurisdictions authored by Lesley Morphet and Nkonzo Hlatshwayo of Hogan Lovells.
Sectors & Strategies...
Venture Capital
Africa Venture round up for March
A summary of major happenings in Africa's tech sector during March courtesy of Jake Bright writing in TechCrunch last week. Google, FaceBook and others feature.  
Trends & Perspectives...
Perspectives
Trump will be good for Africa
In a piece for New African Magazine, Aubrey Hruby argues that, contrary to expectation, the Trump Presidency might be a blessing in disguise for the continent. Relations between Africa and the USA might take on an even greater importance during its term in office.
Perspectives
How DFIs can align with the private sector in Maputo
Using Maputo as an example, Mathew O'Sullivan from CrossBoundary and Quinn Rask from BCS look at what's required to align private sector investment and development with urban plans in a blog for Brookings' Africa Growth Initiative. Using DFI risk insurance and concessional capital may be one approach, but where to start?
This week's issue supported by...             
AfCD 2017 SSA Guide Promo
The essential 2017 Guide to sub-Saharan Africa's
Key Private Equity Investors
 
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Fresh dealflow, new clients, galvanized strategies...
 
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  • Headquarter and Regional Office contact details
  • Expert insight on fund raising, due diligence, execution and exits
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Companies, People & Profiles...
Companies
Atlas Mara looks for a bounce
Macroeconomic factors and adverse currency shifts have pummeled Atlas Mara's profits in the last year, but through a combination of cost savings and a focus on fintech opportunities, the Financial Times reports that the company is looking to double its earnings in the coming year.
Upcoming Investment Missions...
African Agri Council's Investor Discovery Trade Mission and Technical Tour
3 dates in 3 cities

London, May 23rd to May 25th, 2017
Hong Kong, June 21st to June 23rd, 2017

To request an invitation to one of these dates, please send an email to Julia Barton-Hill.
Current Job Postings...
Partner, Africa at Capria  // capria.vc
Based in London, UK or Africa
Post Merger Integration Specialists at KPMG  // kpmg.com
Based in Johannesburg, South Africa
Portfolio Manager, Africa at Deutsche Bank  // db.com
Based in London, United Kingdom
New to AfCD this week...
Principal Banker, Infrastructure at EBRD  // ebrd.com
Based in Casablanca, Morocco
Associate Banker, Energy at EBRD  // ebrd.com
Based in Casablanca, Morocco
Investment Associate, Intermediated Equity at CDC  // cdcgroup.com
Based in London, United Kingdom
Legal Counsel, Debt at CDC  // cdcgroup.com
Based in London, United Kingdom
Upcoming Conferences...
Highlighted Event...             
TMT Finance Africa 2017 
London, May 24th, 2017 
Africa Tech Summit 
London, April 20th, 2017 
Africa Financial Services Investment Conference 2017 
London, May 3rd to May 5th, 2017 
New this week...
4th Annual Ghana Agribusiness Investment Summit 
Accra, May 4th, 2017 
African Nordic Business Conference 2017 
Helsinki, May 4th, 2017 
Euromoney Kenya Conference   // euromoney.com
Nairobi, May 9th, 2017 
AFC Live 2017 
Abuja, May 15th to May 16th, 2017 
IFC & EMPEA's Annual Global Private Equity Forum 
Washington, DC, May 15th to May 17th, 2017 
New this week...
Zambia Renewable Energy & Power Infrastructure Investment Conference   // conventionventures.com
Lusaka, May 17th, 2017 
East Africa Real Estate Investor Forum 2017 
London, June 8th, 2017 
19th Annual Africa Energy Forum 
Copenhagen, June 7th to June 9th, 2017 
And finally...
We hope you found the digest to be a useful summary of the major happenings in Africa's private capital markets last week.  We'd love it if you shared it with colleagues and business partners.  They can sign up for free here.  

Best wishes for a productive week - if you have any tips, suggestions, questions or comments, please get in touch.

All the best,
 
- Allan
 
Allan Cunningham
Editor & Publisher
AfCD | Africa Capital Digest

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