Private capital deal activity in Africa turned out to be a little slow last week. That’s not to say there weren’t any interesting developments–there were–but, where revealed, deal sizes tended to the smaller end of the size spectrum.
The biggest story of the week revolved around the acquisition of quite a high profile African asset manager – Imara Holdings. We learned that FWA, an investment holding company backed by nine family offices from the USA, Europe and South Africa, is acquiring Imara in an undisclosed take-private deal. Having acquired 90% of the firm’s share capital, steps to begin the processing of de-listing the firm from the Botswana Stock Exchange are expected to begin in the very near future.
FWA is firm we’d not heard much about up until this point. It was set up in 2013 by Hector Fleming, Harry Wulfsohn and Tom Gaffney with a brief to source private equity and real estate deals in sub-Saharan Africa on behalf of international investors and first took a stake in Imara in 2015. The founding trio have been involved with Imara’s operations ever since.
Two potential DFI investments surfaced last week. In the first, the IFC is thinking about investing $12 million for a 20% stake in Nelt Africa, a proposed spin out of the Africa division of Nelt, a Serbian logistics firm. Nelt’s Africa division has operations in Angola, Mozambique and Zambia and provide global brands with the logistics services necessary to distribute their products to formal and informal retailers in each country. The IFC’s board will review the opportunity in early April.
The second DFI investment is a potential fund commitment. The EIB is considering whether to back a Mediterrania Capital‘s third fund with €15 million. The new fund, which is apparently aiming to raise €250 million by final close, is a generalist private equity fund which will target growth capital opportunities in small and medium-sized businesses. Fons Mediterrania Capital, the private equity investor’s first fund, is fully invested, while Mediterrania Capital Partners II, which closed with €120 million in August 2015 has deployed 80% of its capital. The firm typically invests in SMEs with equity values ranging from €25 million up to €400 million which expansion strategies in both North African and Sub-Saharan African markets.
South Africa’s busy fintech ecosystem gave us the venture story of the week. Yoco, the Cape Town-based payments provider, has landed an undisclosed amount of capital for its Series A round, which was led by two overseas financial technology investors, namely Velocity Capital and Quona Capital. Neither the amount of capital or value of the the investment were revealed.
Yoco will use the fresh capital to support its expansion plans, which involve growing both its product offering and South African footprint as well as penetrating new markets in East and West Africa next year.
In investment strategy news, Bloomberg reported that Polar Star Management, a hedge fund with one of the Middle East and Africa’s better investment track records of the last 5 years is setting up a private equity unit to back agribusiness opportunities in Africa. It’s hoping to tap into the rising demand for food on the continent.
Brookings published a note on an interesting survey undertaken by the Milken Institute. Questioning 44 institutional investor in Kenya, Rwanda, Tanzania and Uganda revealed that they have a strong, unmet demand for more investment product, especially longer term investment vehicles. Of particular interest to the pension fund and insurance firms in these East African countries would be regionally focused infrastructure and private equity funds investment opportunities.
Finally, a couple of interesting perspective pieces inspired by comments made at recent industry conferences. With the difficulty in attracting capital for Africa’s projects being well-documented, Devex asked experts to share their views on how the future of finance, managing currency risk and public-private partnerships would affect business and governance on the continent. And an interesting summary in South Africa’s Daily News Bulletin on the key themes and perspectives coming out of SAVCA‘s annual conference which ended in the last week of February.