BusinessCompaniesBig and small companies alike plot their strategies


Posted on Thursday, 15 November 2012 19:00

Big and small companies alike plot their strategies

Diagnostic Centre, one of Jacana’s West Africa Fund investments, opened its lab in 2011/Photo©DANOPHOTOZInvestors are forming partnerships and increasing manpower to take advantage of the opportunities for private equity investors in sub-Saharan Africa.


A private equity value chain is beginning to form as funds focus their sights on returns from Africa's economic growth.

At the small end of the scale, Fidelity Capital Partners, a Ghana-based fund manager, changed its name to Jacana Partners in August as part of a move towards a merger with the UK- based firm of the same name.

"It's a rebranding, the intention to legally merge is there," said Jacana chief executive Simon Merchant, indicating the merger would take place at the same time as fundraising from international investors for a new $75m sub-Saharan Africa fund next year.

The new fund will make investments of between $1m and $5m, continuing Jacana's focus on small- and medium-sized investments.

It uses a combination of veteran private equity investors acting as mentors alongside African investment managers.

It has $45m under management with $20m invested so far in West and East Africa, including in two funds managed in partnership with Fidelity.

Merchant says their strategy is "to invest in equity where we think there is interest in strategic acquirers," including other private equity funds.

"Ultimately the whole value chain needs to be filled. We see the larger funds as exit opportunities for us," says Merchant.

These large funds are beginning to hover over the continent.

In August, Bloomberg reported that KKR & Co, one of the giants of US private equity, is recruiting an executive in London to focus on Africa.

Carlyle, another US private equity fund, is in the process of raising $500m for a fund to target sub-Saharan Africa.

In 2011, managers raised $1.3bn for the region, with another $489m raised in the first half of 2012, according to the Emerging Markets Private Equity Association.

After a dip in 2010, investments are also rising, with just more than $1bn invested in 2011 and another $605m invested in the first half of 2012●

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