January 26, 2015 
The weekly roundup of Africa's Private Capital news


 

Please find the latest digest of the most noteworthy private equity, venture capital and infrastructure financing deal news and investment insight related to Africa that was published over the last week.  Feel free to share it with interested colleagues and/or partners.  If they would like to receive their own weekly copy, they're more than welcome to sign up here.  
 
As ever, if you'd like to get in touch or share any tips or comments, please contact me at acunningham@africacapitaldigest.com.

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The week in  brief...

As we were finalizing this week's issue, news starting filtering in that The Abraaj Group has just closed its latest Africa fund at almost $1 billion.  Fuller details were not immediately available, and we will follow developments as they emerge through the week.  This fundraising is the second major fund to be raised this month, following Helios's $1.1 billion raise a couple of weeks ago, and adds to the significant, growing pool of capital targeting opportunities on the continent.  EMPEA reported that private equity raised a total of $4 billion for Africa in 2014.  Now that we have already hit 50% of that figure before the end of the first month of the year suggests that 2015 will be a banner year for private equity funds raised.

 

Adding to that total, look to see Atlas Mara raise more capital for their Africa plans in 2015.  CBS News caught up with Atlas Mara's Bob Diamond at the World Economic Forum in Davos where, among other things, he told them that having raised $700 million in 2014, he's planning to raise a similar amount this year.  He's continues to be a firm believer in the opportunity for scale in Africa's financial services sector.

 

On the deal front last week, Ethos Private Equity is placing another bet on the auto sector.  Having sold its stake in Tiger Automotive to Carlyle and Old Mutual Private Equity in December, it has now acquired a controlling stake in South African automotive parts retailer AutoZone from RMB Corvest and Zico Capital.  While financial terms of the deal were not reported, Ethos will be taking up 3 seats on the company's board.  Ethos sees significant expansion opportunities for the company within South Africa as well as a launch pad for further growth from its footprint in Namibia, Botswana, Swaziland and Zimbabwe.

 

To help its portfolio company Rift Valley Railways head off competition from a proposed new railway linking Mombasa with Nairobi, Qalaa Holdings last week announced that is investing $70 million in a new Cargo Handling subsidiary in the Port of Mombasa.  The deal is aimed at accelerating the movement of rail cargo and remain competitive with the planned new $3.8 billion China-backed rail link.  In other deal news this week, TLG Capital announced an investment of $25 million in GetBucks, the pan-african, technology-driven microfinance company.  The deal is TLG's first in the fintech space, and will help GetBucks expand into new regions and develop new products and services for the market.

 

Ventures Africa reports that Australian oil firm Swala Energy has appointed London-based FirstEnergy Capital as an adviser as it considers options to sell some of its interests in East Africa.  The firm's holdings are mainly in the East African Rift system.  The firm has continued its exploration activities in the region despite the nosedive in the price of oil.

 

Once again, we found a number of interesting trend and perspective pieces last week.  New research out from law firm Baker & Mackenzie predicts that the number of Africa firms listing their shares could jump by 25% in 2015.  In less cheerful news, Thomson Reuters data show that investment banking fees in the sub-saharan region slipped by 9% in 2014 when compared to the prior year.  Meanwhile The Economist had an article on Africa's increasing attractiveness to Private Equity investors, despite the specific challenges making investments on the continent present.  And Heirs Holdings CEO Tony Elumelu wrote a post for the Financial Times on how the concept of Africapitalism is helping to achieve solutions required by the new global context through entrepreneurship, trade and resource management.  

 

You can review these and other stories by scrolling down and reviewing the headlines, abstracts and links. 

Deal News...
Private Equity
Ethos buys RMB Corvest stake and takes control of AutoZone // reuters.com

Making its fourth investment from its $682 million Fund VI, Ethos Private Equity has gained control of South African car parts seller, AutoZone, by acquiring the stakes owned by RMB Corvest and Zico Capital.  Terms of the deal were not disclosed.

Private Equity
Qalaa invests $70mln in Mombasa port cargo subsidiary // bloomberg.com

Qalaa Holdings, owner of Rift Valley Railways, is investing $70 million in a new cargo handling subsidiary in Mombasa, East Africa's busiest port.  The goal is to accelerate the movement of rail cargo and head off competition from the planned $3.8 billion Mombasa-Nairobi rail link which is being backed by China's Exim Bank. 

Private Equity
TLG makes $25mln growth investment in GetBucks // newsday.co.zw

Consumer-focused private equity investment holding company TLG Captal is making a $25 million investment in GetBucks.  The deal will help the financial technology company expand its product and service mix and deliver its services to new countries in Africa.

Private Equity
Tembo Capital Mining takes 5.9% stake in Amara // minesite.com
Tembo Capital, the mining private equity fund group, is making its first investment in AIM-listed Amara Mining.  The deal forms part of an overall placement of 21% of the company's equity which was reported last week.  Amara will be be delivering a report on the viability of the Yaoure gold project in Cote d'Ivoire, which has the potential to be the largest gold mine operated by a non-major.
Venture Capital
PALF and Village Capital seed two education startups // vc4africa.biz

Ubongo and Lekki Peninsula Affordable Schools have emerged as the two top startups taking part in the Edupreneurs Southern Africa Program, thereby earning them an investment of $75,000 each from the Pearson Affordable Learning Fund and Village Capital. 


roadsafety.co.za
Ethos Private Equity acquires controlling stake in car parts retailer AutoZone 
Image Credit: Roadsafety.co.za          
Fund & Financing News...
Private Equity
Abraaj raises almost $1 billion for latest Africa fund // efinancialnews.com
Late Sunday night, Financial News reported that The Abraaj Group has raised almost $1 billion for its latest Africa fund.  Details are sparse as we go to press, and we will follow developments through the week.  The new fund will be one of the largest pools of capital focused directly on opportunities on the continent.
Private Equity
Atlas Mara plans to raise another $700mln in 2015 // cbsnews.com
In the corridors of Davos, CBS News spoke to Bob Diamond, CEO of Atlas Mara, about his plans for expansion in Africa.  Having raised $700 million in private placements in 2014, Diamond tells CBS that he plans to raise a similar amount in 2015.
Credit
Egypt to issue a $1.5bln Eurobond in April // cnbcafrica.com
As it looks to repair its battered finances, Egypt is planning to return to the international capital markets in April after a break of 4 years, with the issue of a dollar-denominated Eurobond.  The $1.5 billion issue is likely to be split into two tranches, according to a deputy minister from the country's Ministry of Finance.
Credit
IDB approves $189mln for interest-free loans // ventures-africa.com
The Islamic Development Bank has approved $189.4 million in financing for infrastructure and agricultural projects in some member countries.  The largest project, financed to the tune of $136 million, is the construction of a 130km road connecting Yamoussoukro to Tiebissou in Cote d'Ivoire.  Other projects in Burkina Faso, Chad and Djibouti are also being supported.
Credit
China Exim Bank releases $65mln credit facility to NetOne // herald.co.zw
China's Exim Bank has released the first part of the total credit facility granted to Zimbabwean mobile network provider, NetOne.  The $65 million dollar payment was released to Huawei International, the Chinese telecomms company, to start the manufacture of the equipment required to help NetOne further expand its network. 
Projects & Portfolio Companies...
Private Equity
TMG Group divests non-core recruiter Career Junction // bdlive.co.za

Blackstar-backed Times Media group has sold its recruitment business, CareerJunction, to international online recruitment company Saon Group for an undisclosed amount. According to CEO Andrew Bonamour, the sale marks the last of TMG's disposals of non-core assets.

Private Equity Real Estate
Nairobi's Garden City Mall to open in April // sacommericalpropnews.co.za
The opening of the first phase of Nairobi's Garden City Mall on the Thika Road looks set to take place in April.  The first phase of the Actis-backed development includes some 33,000 sqm of retail space and 76 residential units.  Once completed the mall will be the second-largest mall in East Africa.
Venture Capital
Green Accelerator selects 11 Kenyan startups // disruptafrica.com
From a pool of 249 applicants, Green Pioneer Accelerator has selected 11 Kenyan startups to participate in a 16-week acceleration program.  The program aims to help green entrepreneurs scale their businesses as well as have an opportunity to earn $58,000 in funding.  The program is a joint initiative of Impact Ampifier, GrowthAfrica, VC4Africa and Hivos.
Compliance & Regulation...
Legislation - Mergers
SACC opens draft guidelines for comment // africanantitrust.com
The South Africa Competition Commission is inviting comments on its draft guidelines for the Assessment of Public Interest Provisions in Merger Control.  This piece in African Antitrust provides details on how to participate.  The deadline for comment submission is set for February 23rd, 2015.
Sectors & Strategies...
Mining
Junior Miners will continue to struggle in 2015 // bdlive.co.za
In a globally-focused report relevant to mining investors and owners in Africa, Deloitte predicts that, once again, miners will continue to grapple with challenging market conditions.  Business Day quotes the report as saying that junior miners are "struggling simply to keep the lights on."  According to the report's authors, the key to future success lies not in figuring out how to ride the waves of volatility, but rather "how to accelerate resurgence from a down cycle".  The full report can be downloaded here.
Trends & Perspectives...
Trends - Capital Markets
New report sees Africa's IPOs jump by 25% // reuters.com
The number of African firms listing their shares could rise by 25% this year. Reuters
reports that, according to research published earlier last week by international Law firm Baker & MacKenzie, 30 firms are preparing to list this year, up from 24 in 2014.  For more details, you can access a summary of the research on Baker & MacKenzie's website.
Trends - Capital Markets
Investment Bank fees slip 9% in sub-Saharan Africa // bdlive.co.za
With fewer deal completions and less debt issuance, the fees earned by investment banks in sub-Saharan Africa slipped by 9% to $338.9 million, according to Thomson Reuters.  Another major factor was significant currency depreciation in some countries against the strengthening US dollar.
Perspectives - Private Equity
Private Equity's interest in Africa continues to expand // economist.com
A report in the latest issue of The Economist looks at private equity activity in Africa and what it will take to be successful there.  A neat summary of the challenges non-African private equity funds face doing deals on the continent and a look at some of the models being used to take advantage of the opportunity the continent offers.   
Perspectives - Private Equity
Heir's Holdings Tony Elumelu on Africapitalism // ft.com
To coincide with the World Economic Forum in Davos, a guest post for the Financial Times by Tony Elumelu on how to address the challenges being set by the new global context.  He calls for a disciplined focus on sustainable, inclusive and integrated solutions, and spells out how implementing the vision of Africapitalism achieves these solutions through entrepreneurship, trade and resource management. 
Perspectives - Private Equity
QE in Europe could boost debt financing to Africa // businessdayonline.com
As QE kicks off in Europe, some analysts believe that we'll see an increase in private equity activity in Africa, in particular Nigeria, as debt financing flows from Europe in search of higher yields.  Helping the trend, depreciating emerging market currencies, which investors see offering even greater emerging market opportunity.
Perspectives - Venture Capital
Low awareness, red tape crimp entrepreneur schemes // disruptafrica.com
A study undertaken by Oxford University to evaluate the impact of government schemes in Ghana aimed at encouraging business innovation and entrepreneurship has found that most business owners are unaware of the schemes.  Of the 4% who were aware, the administration involved in applying for loans and grants was found to be too much of a disincentive.
Perspectives - Venture Capital
Venture Builders; a new way to launch Africa's startups // venturebeat.com
An interesting perspective piece by MIT Ventures Founder Ali Diallo on venture-builders, explaining how the approach to building startups differs from traditional models and why he sees momentum gathering both in and outside the USA.  In Springlab, South Africa already boasts its own venture builder.  Will others follow?
Companies, People & Profiles...
People News
Scipion Capital unveils high-level advisory board // hedgeweek.com

Commodity Trade Finance Investment manager Scipion Capital announced the appointment of a high-level advisory board to provide advice on the company's activities and strategic priorities.  Taking the chair of the advisory body, Sir Desmond de Silva who is joined by new board members and industry experts Michael Naylor and Eon Brophy.

Read more...

People News
Who's in the running to be next head of AfDB? // ventures-africa.com
As current African Development Bank President Donald Kaberuka's terms comes to an end in May, Ventures Africa takes a look at some of the candidates who could replace him.
Company News
Standard Bank opens a rep office in Ethiopia // ventures-africa.com

Standard Bank is planning to open a representative office in Addis Ababa by March to establish a a foothold in the fast-growing economy and "get to know" Ethiopia on behalf of its clients.

Read more...

Company News
Swala Energy looking to dispose East African oil assets // ventures-africa.com

Australia's Swala Energy has appointed FirstEnergy Capital as an adviser as it considers strategic options for the sale of some of its interests in East Africa.  Ventures Africa reports that Swala's holdings are predominantly in the East Africa Rift System.  

Read more...

Current Job Postings...
Highlighted Jobs...            
Private Equity Analyst at African Capital Alliance 

Based in Lagos, Nigeria

Read more...

PERE Associate at African Capital Alliance 

Based in Lagos, Nigeria

Read more...

Managing Director for African Private Equity firm

Based in Nairobi, Kenya

Read more...

Managing Director for African Private Equity firm

Based in Johannesburg, South Africa

Read more...

Deal Lead for Renewable Energy Investing at Google 

Based in Mountain View, CA, USA

Read more...

Investment Manager for Infrastructure and Power deals 

Based in Johannesburg, South Africa

Read more...

Managing Director, Capital Markets for GE 

Based in London, UK

Read more...

Principal for Private Equity firm 

Based in Nairobi, Kenya

Read more...

New to AfCD this week
Manager for MENA-focused Private Equity office 

Based in Riyadh, Saudi Arabia

Read more...

Investment Officer for the IFC 

Based in Nairobi, Kenya

Read more...

Analyst for prominent MENA Private Equity firm 

Based in Riyadh, Saudi Arabia

Read more...

Associate or VP for Africa-focused Private Equity firm 

Based in London, UK

Read more...

Upcoming Conferences...
Highlighted Event...            
TMT M&A Forum 2015 

London, March 19th, 2015 

Read more...

Powering Africa: Summit  

Washington, DC, January 28th to January 30th, 2015 

Read more...

Investing in African Mining Indaba 

Cape Town, February 9th to February 12th, 2015 

Read more...

2015 SAVCA Annual Private Equity Conference 

Stellenbosch, February 12th to February 13th, 2015 

Read more...

South African Impact Investing Conference 

Johannesburg, February 16th to February 17th, 2015 

Read more...

17th Annual Africa Business Conference 

Cambridge, USA, February 27th to March 1st, 2015 

Read more...

2nd Annual Infrastructure Project Financing Africa 

Cape Town, March 2nd to March 4th, 2015 

Read more...

Somali Investment Forum 

Nairobi, March 8th to March 10th, 2015 

Read more...

Africa GRI 2015 

Johannesburg, April 21st to April 22nd, 2015 

Read more...

12th Annual AVCA Conference 

London, April 27th to April 29th, 2015 

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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