January 19, 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...

If there was a common theme last week for private capital in Africa, it was exits.  Or partial exits to be exact. After grabbing the headlines the week before last with news of their record breaking $1.1billion Africa-focused fund, Helios Investment Partners were at it again last week. Grabbing more headlines that is. Norfininvest AS is paying $258 million for half of their stake in Kenya's largest bank by customers, Equity Bank, earning Helios a bumper return on the value of their initial investment for this stake in 2007, which was estimated at $60 million.

 

In dollar value terms, the biggest potential exit news was made by Standard Chartered. It was reported that their Principal Investments unit is close to selling a portfolio of private equity investments valued at $600 million. Sources tell Bloomberg that an agreement has, in fact, been reached with an investor, whose identity is not being revealed for the time-being. The bundle of assets in question is located in Asia and the Middle East as well as Africa. It seems we'll have to wait for the deal to close to find out more. This is the second such transaction for Standard Chartered in relatively recent past, having sold a $500 million portfolio of assets to an investor group led by Coller Capital last year.

 

You may remember that, in December, The Abraaj Group successfully sold a 21% stake in Egyptian medical services company Integrated Diagnostic Holdings, (IDH), to private equity firm Actis for an undisclosed amount. Now it seems that Abraaj and other investors have a further exit opportunity from the company.  It was announced last week that IDH is planning a listing on the London Stock Exchange in February, the first Egyptian firm to do so for a number of years. According to the Financial Times, shareholders will list up to 45% of the company's shares, including a 15% overallotment option.  The company is expected to raise up to $300 million through the listing and have a market capitalization of $750 million.

 

Tunisia became the latest African country to lay out plans to tap the credit markets in 2015.  The Central Bank's Governor unveiled plans to raise $1.75 billion through a mix of dollar-denominated bonds and sharia-complaint Sukuk debt in 2015.  The money raised will be earmarked to stimulate economic growth, without any specifics as to how. Apparently the first bond issue of $750 million could be offered as soon as the end of this month.  It may answer some questions as to investors' continued appetite for African debt as the other, expected market shifts come into play.


There were a number of other interesting items last week.  From commitments to Pinebridge's sub-Saharan fund to TPG Capital's plans to hire a local team in Africa to perspective from Riscura on the need and ability of Africa's pension funds to expand beyond traditional investment classes in their asset allocation strategies to include private equity for the first time, you can review these and other stories by scrolling
 down and reviewing the headlines, abstracts and links. 
Deal News...
Private Equity
StanChart in rumored $600mln secondaries sale // businessweek.com

Sources tell Bloomberg that Standard Chartered is close to selling a portfolio of private equity investments valued at close to $600 million.  The bank has reached an agreement with an investor to sell a bundle of stakes in assets in Africa, Asia and the Middle East currently owned by the bank's Principal Investments unit.

Private Equity
Helios realizes $258mln exit in partial Equity Bank stake sale // afkinsider.com

AFKInsider reports that Helios Investment Partners is selling half of its stake in Kenya's Equity Bank to Norway's Norfininvest AS, booking an exceptional return in the process. The sale of 12.11% of Kenya's largest consumer bank will earn Helios $258 million, more that double the estimated $120 million the investment firm paid for a 25% stake in the company in 2007. 

Private Equity Real Estate
W. P. Carey buys upscale Mauritian resort for $72mln // africamoney.info

U.S. Sales Leaseback firm W. P. Carey has paid $72 million to acquire La Plantation Albion Club Med, the upscale 266 room resort located in Albion, Mauritius.  The investment is being made through one of the firm's non-traded REITs, CPA: 18 Global.

Private Equity Real Estate
New Frontier Properties to list on JSE this week // bdlive.co.za

Mauritius-based property fund New Frontier Properties is set to list on the AltX board of the Johannesburg Stock Exchange in the coming week.  Whilst seeking capital from South African investors, the fund plans to focus on investments in income-generating and development assets outside South Africa.

Venture Capital
iKubu graduates Grindstone with Garmin exit // moneyweb.co.za

NASDAQ-listed navigation firm Garmin has acquired iKubu, a developer of bike radar technology, for an undisclosed amount, giving South Africa's venture capital community a welcome shot in the arm.  iKubu had been nurtured through the Grindstone Accelerator program. 


businessdailyafrica
A partial exit from Equity Bank earns Helios $258 million
Image Credit: Business Daily            
Fund & Financing News...
Credit
Tunisia looking to raise $1.75bln through debt offerings // theafricareport.com
Seeking funds to help stimulate economic growth, Tunisia is planning to raise as much as $1.75 billion in dollar-denominated bonds and Islamic sukuks in 2015.  The country's Central Bank Governor told Reuters that the first issue of $750 million could take place as early as the end of January.
Infrastructure
Access Infra Africa launches with plans $500mln portfolio // ventures-africa.com
Power project developer Access Power MEA has teamed up with renewable energy firm EREN to launch Access Infra Africa, an investment vehicle targeting early stage development power projects in Africa.  The partners are implementing a plan to build a portfolio of power assets which will eventually be worth in excess of $500 million.
Private Equity
Pinebridge lands $52.5mln in commitments for SSA fund // altassets.net
AltAssets is reporting that, according to a filing made with the U.S. Securities regulator, Pinebridge has pulled in commitments of $52.5 million from 6 LPs for a fund targeting companies in sub-Saharan Africa. 
Projects & Portfolio Companies...
Private Equity
Abraaj-backed IDH aims for February listing on LSE // ft.com

Egyptian healthcare company Integrated Diagnostic Holdings is planning to list up to 45% of its shares on the London Stock Exchange in February, raising approximately $300 million.  The move provides The Abraaj Group, one of the firm's largest shareholders, a second opportunity to reduce its ownership stake in the last two months, having sold a 21% stake to fellow private equity firm Actis in December 2014.

Private Equity
Bain Capital's Edcon in need of debt restructuring // bloomberg.com
South African non-food retailer Edcon's bond holders are signalling the need for the company to restructure its debt.  According to Bloomberg, yields on the firm's callable June 2019 euro-denominated notes have climbed more that 25 percentage points over the last 3 months, rendering management of the debt load unsustainable according to some fund managers.
Compliance & Regulation...
Legislation
Egypt unified investment law to boost foreign investment // theafricareport.com
With firms requiring approvals from over 70 government agencies, the process of setting up a company in Egypt can take as long as 5 years.  With plans to implement a new unified investment law in March, the government is hoping to encourage foreign investment by setting up a one-stop shop to streamline the registration and approval processes.
Sectors & Strategies...
Infrastructure
Infrastructure opportunities look set to continue expanding // afkinsider.com
While infrastructure in Africa only represents 2% of the global market today, the opportunities are ample. Transport and Power are the sectors where most expect activity to occur.  A quick look at the state of play in Africa and setting some context for investors considering infrastructure on the continent.
Consumer
10 African consumer trends to profit from // howwemadeitinafrica.com
Pulled together by trendwatch.com, a list of 10 African consumer trends to watch and profit from in 2015.  An interesting, well-thought out list.
Trends & Perspectives...
Trends - Private Equity
SA Private Equity delivers 18.5% over 10 years // ventures-africa.com
Riscura-SAVCA's most recent Private Equity Performance Report publishes data showing that the private equity investment class in South Africa has delivered an 18.5% annualized return, net of fees, over the last 10 years..
Trends - Frontier Markets
Nigeria consolidates status as most-watched frontier market // wsj.com
A recently created frontier markets sentiment index launched in the middle of last year by the Wall Street Journal and Frontier Strategy Group puts Nigeria at the top of a list of countries multinationals have on their watch list for possible future investment.  African countries occupy 5 of the top 10 slots.
Perspectives - Private Equity
Africa's growing pension assets a potential boon for Private Equity // riscura.org
As Africa's pension fund assets continue to expand in step with the rise of Africa's middle class, asset allocation strategies will have to change to incorporate other non-traditional categories.  Riscura Analyst Craig Metherell looks at the opportunity for Private Equity and how it can become a key part of pension fund portfolios on the continent.   
Perspectives - Private Equity
Revisiting residential investment theses in South Africa // zawya.com
A Q&A piece with Soula Proxenos of International Housing Solutions on the need to rethink the approach to affordable housing in South Africa.  Rather than creating a culture of dependence, she argues that it can be a critical wealth creation step of the country's low to middle income families.
Companies, People & Profiles...
People News
NBK Capital appoints CEO for spun-out alternatives business // zawya.com

Amjad Ahmed has been appointed CEO of NBK Capital Partners, one of the MENA regions leading private equity and mezzaning fund managers.  Amjad Ahmed has worked at NBK Capital for ten years, founding its alternatives business, and which has now been spun out as NBK Capital Partners.

Read more...

People News
KKR taps Riverstone's van Hovell to head EMEA Energy // reuters.com
Haroun van Hovell has been tapped by private equity firm KKR to head up its energy team in EMEA.  Previously he had been a Managing Director at Riverstone Holdings, where he was responsible for sourcing and managing energy investments.
Company News
TPG Capital plans to open Africa office // thomsonreuters.com

According to a Hamilton Lane report made available by the Teachers Retirement System of Louisiana, private equity firm TPG Capital is planning to hire a local team to make growth investments in Africa.

Read more...

Company News
PG merger with Thembeka Capital completed last week // bdlive.co.za

The merger between private equity investment firm Thembeka Capital and PSG was completed last week.  Thembeka shareholders received 1.7 PSG shares for every Thembeka share in a deal worth approximately $130 million. The merger brings PSG a range of assets, including a stake in Capitec, taking its stake in the commercial bank to a little over 30%. 

Read more...

Current Job Postings...
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...

Project Finance Specialist at OPIC 

Based in Abidjan, Cote d'Ivoire

Read more...

Investment Manager for Infrastructure and Power deals 

Based in Johannesburg, South Africa

Read more...

New to AfCD this week
Managing Director, Capital Markets for GE 

Based in London, UK

Read more...

Principal for Private Equity firm 

Based in Nairobi, Kenya

Read more...

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...

Upcoming Conferences...
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...

TMT M&A Forum 2015 

London, March 19th, 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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