November 17, 2014 
The weekly roundup of Africa's Private Capital news


 

This week, as with every week, we've sifted through a large amount of content from multiple sources to bring you the latest digest of the most noteworthy private equity, venture capital and infrastructure financing deals and investment news stories related to Africa from the the last seven days.  We'd be delighted if you shared it with interested colleagues and/or partners, so please feel free to forward the newsletter on to them.  If they would like to receive their own weekly copy they're more than welcome to sign up here.  
 
We're trying to make this as useful a tool as possible for private capital market professionals focused on Africa.  Send tips, suggestions and feedback to me at acunningham@africacapitaldigest.com.

Many thanks for reading.
The week in  brief...

News of planned and actual fund raising activity grabbed most of our attention during the last week.  In the first of a couple of exclusives, Private Equity News broke the story that African Capital Alliance is aiming to raise $600 million for its fourth fund, Capital Alliance Private Equity IV.  The fund will invest in growth equity deals in West Africa, with a significant proportion of the fund earmarked for opportunities in Nigeria.  In the second exclusive, Private Equity International reports that Verod Capital has held a successful first close for its debut fund at $55 million.  Sources tell PEI that they expect the fund to hit its hard cap of $125 million by the year's end.  Meanwhile, Vantage Capital is raising R2.5 billion for its third mezzanine fund, targeting its final close for the end of the first quarter next year. 

 

On the debt financing front, TMT Finance reported that IHS Towers is seeking upwards of $700 million to help finance the deal it struck with with MTN Group in September. This is on top of the $600 million debt tranche of the bumper $2.6 billion equity/debt financing package that it sealed a couple of weeks ago.  Investor demand for this company's paper is expected to be strong.


Hard news of actual deals was actually relatively thin on the ground last week compared to the week before.  Once again, African Capital Alliance makes its second appearance of the week with an undisclosed investment from its third fund in Filmhouse Cinemas, the fast-growing Nigerian cinema chain and its movie production subsidiary Film One.  Film One is the firm behind two blockbusters in Nigeria thus year - 'Half of a yellow sun' and 'October 1st' - and the capital injection will be used to scale the organization further.  In other deal news, Aabar Investments, a subsidiary of the UAE's sovereign wealth fund acquired at 5.1% stake in Egyptian listed property developer Palm Hills.  You may remember that Ripplewood took at 2.3% stake in the company earlier this year.  

  

And finally, an interesting post in the Financial Times by Mike Casey, EMPEA's director of consulting, in which he examines various data points around private equity investments in Africa in context with other merging market private equity industries.  A number of useful reference points and conclusions can be drawn from his insight.

  

To find out more about these and other stories, please  scroll  down and review the headlines, abstracts and links to the original articles. 

Media Barter
Deal News...
Credit
IHS looking to secure additional $700mln of debt // tmtfinancenews.com

Following on from its bumper $2.6 billion equity and debt financing package announced two weeks ago, TMT Finance is reporting that sources say that the towers company is looking to secure upwards of $700 million of additional debt.  Proceeds of the latest debt round will be used to help finance IHS's deal with MTN Group which was announced in September.

Private Equity
Aabar Investments takes 5.1% stake in listed Palm Hills // ventures-africa.com

Aabar Investments, a subsidiary of the UAE's sovereign wealth fund, has acquired a 5.1% stake in Egypt's second largest listed property developer, Palm Hills.  While terms of the deal were not disclosed, Reuters estimates this deal to be valued at approximately 285 million Egyptian pounds or $39.8 million.  As reported previously, private equity firm Ripplewood acquired a 2.3% stake in the firm in May this year.

Private Equity
African Capital Alliance takes stake in Filmhouse Cinemas

According to a press release on their website, Lagos-based private equity firm African Capital Alliance has made an investment in Filmhouse Cinemas, the Nigerian cinema chain and its associated production and distribution company, Film One. The investment will be used to help scale the company's operations to become the largest mass media organization in the country.  While terms of the deal were not disclosed, the investment is being made from ACA's third fund.      

Venture Capital
Mobile Payment startup Irofit lands $600,000 seed round // vc4africa.com

Mobile payment startup Irofit has secured a $600,000 seed round from investors that include Nordic early stage investor, Inventure, payments software development company Sofinor, and angel investor Rasheed Olaoluwa.  The capital will be used to complete development of the firm's proprietary platform and launch the service in Nigeria.

Fund News...
Private Equity
African Capital Alliance aiming for $600mln for fourth fund // penews.com
African Capital Alliance is targetting $600 million for its fourth private equity fund.  The fund, Capital Alliance Private Equity IV, will invest in growth equity deals in West Africa, with up to 75% focused on opportunities in Nigeria.  Details of the fund raising were sourced by PE News from investment due diligence documents from the IFC.  
Private Equity
Vantage Capital plans R2.5 billion raise in Q1 2015 // bdlive.co.za
Vantage Capital is planning to raise a R2.5 billion, (approximately $230 million), for its third mezzanine fund by March 2015.  The fund will target opportunities in infrastructure, power, telecoms, agriculture, logistics and real estate, with 50% deployed in South Africa and the balance earmarked for opportunities in other sub-Saharan countries.  
Private Equity
Verod Capital debut fund hits $55mln first close // privateequityinternational.com
Lagos-based private equity firm Verod Capital has held a $55 million first close for its debut fund, according to an exclusive report by Private Equity International. Both Verod Capital and its placement agent declined to comment.  PEI quotes sources as saying that the private equity firm is on track to hold a final close at its $125 million hard cap before the end of the year. 
Regulation...
Mergers & Acquisitions
Key changes to COMESA's merger control rules // dentons.com

Following the COMESA Competition Commission's publication on October 31st of the first set of formal guidelines on merger notification requirements, Dentons has put together a useful overview and summary of the key points.

Read more...


Nigerian Blockbuster released by Film One
ACA invests in Filmhouse and Film One, producer of Nigerian blockbuster"Half of a Yellow Sun" 
Image Credit: Film One              
Sectors & Strategies...
Agriculture
SSA's rising demand for poultry products attracts investor // theafricareport.com
As demand for chickens and eggs continues to expand in Africa, a number of private equity firms have been making investments in firms along the poultry business's value chain.  According to The Meat Atlas, average consumption of chicken in South Africa is expected to jump from 37.8kgs per person in 2012 to 50kgs per person in 2020.
Consumer
The growth of Nigeria's middle class consumer society // gga.org
A look at the evolution of Nigeria's middle class consumer over the last ten years and how it is expected to continue expanding.  By some estimates, this segment will be made up of 68 million people by 2030, thereby offering investors and corporations a larger set of consumer investment and expansion opportunities than many other countries around the world.
Energy
East African daily oil production to hit 1mln barrels in 2025 // oilreviewafrica.com
Quoting a study by IHS Energy, Oil Review Africa reports that East Africa's oil production will likely be the equivalent of 1 million barrels per day by 2025, with Mozambique and Tanzania leading the way.  The region is responsible for the highest number of gas discoveries between 2010 and 2013.  The study notes that the business environment is still risky given weak infrastructure and regulatory frameworks.
Perspectives & Trends...
Perspectives - Private Equity
Africa's private equity landscape in an emerging markets context // ft.com
An interesting guest blog in the Financial Times by Mike Casey, EMPEA's director of consulting.  He takes a look at the latest private equity data from Africa and compares it with other EMPEA statistics on emerging market private equity industries.  He gives his insights on fund flows, the fundraising and investment environment facing GPs and LPs, as well as the availability of investable deals. 
Perspectives - Private Equity
Western investor models for African ventures // hbr.org
Curiously titled "What western investors want from african entrepreneurs" in that the article does not really answer that question directly, this Harvard Business Review piece lays out a number of different approaches private equity and venture capital investors are adopting as they do deals in Africa.
Perspectives - Infrastructure
Structured financing increasingly important financing model // bdlive.co.za
Structured Finance for large infrastructure projects is increasingly important in helping Africa's corporations close the significant infrastructure gap facing the continent.  No longer the province of just the large global banks, the world of international finance is branching in many different directions. 
Trends - Credit
Debt boom looks set to continue in 2015 // africanbusinessreview.co.za
African governments and corporations are still on course to grow debt issuance next year as global investors still hunt for yield, even though quantitative easing in the USA has come to an end.  Despite challenges to the market, several african countries are looking to issue in 2015, and investor appetite remains high.
Trends - Private Equity
Investment flows in manufacturing and agribusiness // cnbcafrica.com
A 'Power Lunch' interview with German Vergarra, the IFC's Regional Head and Associate Director of manufacturing, agribusiness and services.  He discuss the growth in regional equity investment and how this is playing out in various sectors of the economy.
Companies, People & Profiles...
Company News
Liberty's SIMS takeover helps expand alternative investments // ghanaweb.com

Liberty Holdings, owner of asset manager STANLIB, has acquired 100% of Stanbic Investment Management Services, (SIMS), from banking group Stanbic Ghana.  The deal is expected to give STANLIB a strong platform in Ghana and provide SIMS with access to extensive experience gleaned by STANLIB across Africa.  Efforts to broaden SIMS' product offering to include alternative investment solutions tailored for the Ghanaian market are already underway. 

Read more...

Company News
Arrowhead bid for Dipula could turn hostile // sacommercialpropnews.co.za

On the back of an announcement of record results by property investor Dipula Income Fund, CEO Izak Peterson tells SA Commercial Property News that a merger with Arrowhead Properties does not make a lot of strategic sense and that it would be "silly for Arrowhead to pursue a hostile takeover."  Arrowhead's COO Mark Kaplan confirmed the firm's intention to continue increasing their stake in Dipula.

Read more...

People Moves
PineBridge Middle East appoints Copley as new CFO // zawya.com
PineBridge Investments Middle East has appointed John Copley as Chief Financial Officer.  Previously he had been Head of Corporate Finance, Treasury, Insurance and Investor Relations at Aldar Properties in the UAE.
People Moves
Dennis Bugingo joins Simmons & Simmons Africa team // thelawyer.com
Simmons & Simmons has recruited Dennis Bugingo as a partner in its Africa team.  He comes to the firms from Dentons where he had been a partner and the relationship chair of the firm's Africa committee.  He joins a firm with  a number of Africa-focused lawyers in London, Paris and Singapore.
People Moves
Standard Bank appoints Cloete to capture China deals // ventures-africa.com
Annelie Cloete has been appointed as Coverage Manager for China clients by Standard Bank Namibia as part of a strategy to capture a larger share of the inbound investment market originating in China.
Current Job Postings...
Fund of Funds Investment Manager for CDC 

Based in London, UK 

Read more...

Investment Manager, Africa Funds at DFI  

Based in London, UK 

Read more...

Head, Distressed Debt for mid-market African bank 

Based in South Africa 

Read more...

Head, Operations & IR at Accion's Frontier Investment Group 

Based in Washington, DC, USA 

Read more...

Infrastructure Analyst at Old Mutual Alternative Investments 

Based in Cape Town, South Africa 

Read more...

In-House M&A/Corporate Strategy Director 

Based in London, UK 

Read more...

New to AfCD this week
Sustainable forestry fund seeks private equity or vc professionals 

Based in Frankfurt, Germany 

Read more...

Investment Principal for private equity fund 

Based in Nairobi, Kenya 

Read more...

Senior Legal Adviser for Old Mutual Investments 

Based in Cape Town, South Africa 

Read more...

Upcoming Conferences...

A record turn-out of over 550 private equity professionals expected with 120+ local and international LPs including: Public Investment Corporation, Grinnell College, Public Service Pensions Fund, Gatsby Charitable Foundation, Los Angeles County Employees Retirement Association, GIC Special Investments, The Church Pension Fund and many more... 10% discount - please quote VIP code: FKR2356ACDWB:

SuperReturnAfrica.com...

Africa Investment Exchange; Energy 

London, November 24th to November 25th, 2014 

Read more...

Africa Inbound 2014 

London, November 25th, 2014 

Read more...

Africa Middle East Investment Forum 2014 

Nairobi, December 9th to December 10th, 2014 

Read more...

2015 SAVCA Annual Private Equity Conference 

Stellenbosch, February 12th to February 13th, 2014 

Read more...

Global Private Equity Conference 

Washington, DC, May 11th to May 14th, 2015 

Read more...

Africa Financial Services Investment Conference 

Brighton, May 12th to May 15th, 2015 

Read more...

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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