Aureos Capital has held a first close on its Aureos Africa Fund at $253.5 million (€183 million). The UK-headquartered investor is targeting $400 million for the fund: eight times larger than its existing Africa-focused funds.
Investors in the fund so far include the UK government fund of funds CDC, Norwegian development fund Norfund, the Netherlands’ FMO, the World Bank development fund IFC and the European Investment Fund.
Africa: falling barriers to
The Africa Fund will target growth opportunities in mid-sized companies where there is an opportunity to expand the business into pan-African enterprises within two to three years of investment.
Sev Vettivetpillai, CEO of UK-based Aureos Advisers, said: “Trade barriers are coming down, and our Africa Fund seeks to tap into these new developments. For example, there are free trade areas in East Africa, Southern Africa and West Africa. We believe it is only a matter of time before a pan-African free trade area is formed.”
The fund, which is able to invest in public equities as well as buyouts, has already approved more than $50 million for investment in six companies across financial services, building products, real estate, technology and fast moving consumer goods.
“Given the strong pipeline across the continent, we expect to have invested or committed between $80 million and $100 million by the end of the year,” said Vettivetpillai.
The Africa Fund is one of four Africa-focused funds managed by Aureos, the others being regional funds covering West, Southern and East Africa ranging in size from $40 million to $50 million.
Aureos has 16 regional private equity funds and over $900 million in funds under management and its geographical footprint extends to over 50 emerging markets in Asia, Africa and Latin America.