Helios Investment Partners, a Pan-African private equity firm, has raised its second Africa-focused private equity fund, attracting $900 million in new capital. That makes it the continent’s largest-ever buyout fund, second to Carlyle Group, which opened a South African office in April, according to the Wall Street Journal.
There are now 79 Africa-focused PE funds seeking to raise capital and invest. Africa’s share of global private equity has hovered at around the 1% mark for the past five years, says the Journal. This has been largely been due to the uncertainties of doing business in Africa, including political instability, patchy enforcement of legal rights, and lack of skilled managers. But interest is rising from both Asian investors and a rapidly-developing domestic market of over one billion people.
Helios Investors II will invest $25 to $250 million in equity per transaction into business formations, growth equity, and structured investments, reports BusinessLive.
The new Helios fund will focus on high-growth sectors throughout the continent, including telecommunications & media, financial services, power & utilities, distribution & logistics and fast moving consumer goods. They have already made three investments, including the acquisition of Interswitch, Nigeria’s leading electronic payments processing company; the establishment of Helios Towers Africa which builds and operates telecommunications tower businesses across Africa, as well as in Ghana, Tanzania and the DRC; and the acquisition of Continental Outdoor Media, Africa’s largest outdoor advertising company.
The lack of an established PE industry and relatively few funds is still hampering private equity in Africa. Investors expect returns in Africa to be below those for emerging countries in Asia and Latin America, reports The Journal.
But given the recent boost by Helios and others, fundraising for African private equity could reach $10 billion this year, according to figures from industry research firm Preqin.
So our question to you is, are you turning more attention to Africa as an investment opportunity or potential location for your next private equity job? Add your comments below.
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