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Aureos Africa Fund closes fundraising at USD381.1m

The Aureos Africa Fund has raised a total of USD381.1m at the final close of its fundraising.

The fund, managed by Aureos Capital, is believed to be the largest ever to focus on investing in small to mid-sized businesses across Africa.
Aureos Capital, which specialises in investing in mid-sized businesses across the emerging markets, says the Africa Fund has been well received by a broad range of institutional investors attracting institutions from the US and Europe as well as Africa.
Sev Vettivetpillai, chief executive of Aureos Advisers, says: “Considering the weak fundraising environment for private equity over the last two years we are delighted with the strong interest shown by investors.
“Many institutional investors are becoming aware that they have little or no exposure to what is becoming an increasingly robust and vibrant part of the global economy.
“As with many other emerging markets, African economies have grown steadily throughout the global downturn and unlike the western economies they have not had to saddle themselves with large public sector deficits to achieve that out-performance.”
The IMF estimates that average real per capita GDP growth in Africa for 2009 was 1.7 per cent compared to an average fall of 3.4 per cent for advanced economies. The IMF forecasts average real per capita GDP growth of four per cent for Africa in 2010 compared to an average of just 1.1 per cent for advanced economies.
The Aureos Africa Fund targets initial investments of up to USD10m with a focus on businesses that have strong potential to expand on a pan-African basis within two to three years via “buy and build” strategies and/or through carefully executed organic growth. The focus is on returns generated from growth as opposed to leveraging and financial engineering.
Davinder Sikand (pictured), regional managing partner of Aureos Africa, says: “Investors view our fund as an excellent vehicle for obtaining exposure to the increasingly dynamic African markets without having to pay the kind of multiples needed to invest in the larger stock market listed companies. They have also been impressed by Aureos’ track record from our previous generation of investments in small and mid-sized companies in Africa.”
The fund has already invested approximately USD120m in ten companies operating in a variety of sectors and regions in Africa.

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