The Africa Health Fund has made its first investment by acquiring a stake in the Nairobi Women’s Hospital for USD2.66m.
The Africa Health Fund was launched in June 2009 and is managed by Aureos Capital, a private equity fund management company specialising in investing in small to medium-sized businesses in emerging markets.
The fund is backed by the International Finance Corporation, the African Development Bank, DEG and the Bill & Melinda Gates Foundation, which have jointly invested USD57m. The target is to raise a total of USD100m with a final close in 2010.
The objective of the fund is to increase access, affordability and quality of health-related goods and services for underserved Africans, especially those at the bottom of the income pyramid, simultaneously providing investors with good long-term financial returns.
Nairobi Women’s Hospital provides healthcare services for women and children. It focuses on providing inpatient, outpatient and specialised services for women, including antenatal, gynaecology, obstetrics, breast cancer detection and surgery. It also has what is believed to be the first Gender Violence Recovery Centre in East Africa.
A proportion of the sum invested in Nairobi Women’s Hospital will be used to help fund a management buyout, with the balance going to the expansion of facilities such as clinics, beds, ambulances and operating theatres in the East Africa Region.
Sev Vettivetpillai (pictured), chief executive of UK-based Aureos Advisers, says: “While we were setting up a unique HIV/AIDS risk management programme for our East African portfolio companies in 2008 we started to realise just how fragmented and under-capitalised the healthcare sector is in Africa.
“Many of the causes of the high costs and inefficiencies of the healthcare sector in Africa are essentially business issues that we hope the fund, and the input of Aureos executives, will help to resolve.”
Dr Sam Thenya, group chief executive of Nairobi Women’s Hospital, adds: “We are delighted to have attracted the backing of the Africa Health Fund and to receive the support of Aureos. Their experience in the African health sector will help us better reach those in need.”
According to an IFC study, 60 per cent of healthcare financing in Africa comes from private sources and about 50 per cent of total health expenditure goes to private providers.
