CDC Group, the UK’s development finance institution, has committed invest over USD100m in two sub-Saharan Africa focussed private equity funds.
The funds will invest in promising businesses across a range of African countries.
The new commitments made by CDC are with fund managers Helios Investors in their Helios Investors II fund, and with Development Partners International in their African Development Partners fund. The commitments are USD75m and EUR20m respectively.
The commitments with Helios and DPI bring CDC’s total investment commitment in 2009 in Africa focused funds to over USD150m. In addition, CDC also invested USD75m this year in the Global Trade Liquidity Programme. The programme was established by the International Finance Corporation and will provide significant support for trade in Africa.
CDC’s new commitments are expected to play an important part in the institution’s five year investment strategy (2009-13) which is focussed on low income countries and in Asia and sub-Saharan Africa.
The African Development Partners fund has raised EUR270m and will invest between EUR10m to EUR35m in African companies. The investee companies are expected to be in sectors such as telecommunications, technology, financial services, healthcare, retail and leisure, property development and utilities. It is expected the fund will invest in companies across Africa, with a particular emphasis on post-conflict, newly-liberalised countries such as Rwanda and Angola.
The Helios Investors II fund is aiming to raise USD600m, and will make individual investments of between USD20m to USD150m in African companies. The investee companies are anticipated to be in sectors such as ICT, financial services, infrastructure, consumer products and agribusiness. The fund is expected to invest across a range of countries, including for example Kenya, Nigeria and South Africa.
CDC’s investment in the fund Helios Investors II follows an earlier investment by CDC in the fund Helios Investors I in which CDC was the largest equity investor with a commitment of USD50m out of USD305m. The fund has to date invested in five businesses with operates in around 20 countries in sub-Saharan Africa.
Richard Laing (pictured), CDC’s chief executive, says: “Despite the global economic downturn, we continue to see long term investment opportunities across Africa – particularly in sub-Saharan African countries where businesses suffer acutely from limited access to capital.
“In today’s difficult investment environment, development finance institutions such as CDC are acting as investment pioneers and we hope that our USD100m-plus investment in Helios’ and DPI’s funds will encourage others to invest in the funds alongside us, providing even more capital to be invested in promising businesses across Africa.”
