Aureos Capital to manage $120m African healthcare fund(3)

Aureos Capital, the private equity buyout and venture capital firm, focused on Asia, Africa and Latin America, has held a fist close on a fund aimed at investing in Africa’s fledgling health sector.

A fund designed to invest in medical facilities across Africa has held a first closing of $57 million.

The fund, to be managed by Aureos Capital, a private equity firm specializing in providing expansion and buy-out capital to unlisted mid-cap businesses in Asia, Africa and Latin America, has garnered commitments in a first round of equity raising from World Bank Group member IFC, The African Development Bank, the Gates Foundation and DEG (Deutsche Investitions- und Entwicklungsgesellschaft).

The total equity target for the fund is between $100 million and $120 million.

The Health in Africa Fund was launched to invest in “small- and medium-sized companies in sub-Saharan Africa, such as health clinics and diagnostic centres, with the goal of helping low-income Africans gain access to affordable, high-quality health services.” According to a joint statement by Aureos Capital and its limited partners, the fund will aim to implement key recommendations of IFC’s The Business of Health in Africa: Partnering with the Private Sector to Improve People’s Lives report.

The key findings of the report point to the impact that private health companies could bring to the continent in terms of health and economic benefits for low income Africans. The report also recognised that the private sector already delivers around half of all health-related goods and services in Africa.

Lars Thunell, IFC executive vice president and chief executive said: “The Health in Africa fund is a key component of IFC’s $1 billion Africa health strategy, which includes improving the operating environment for companies in addition to providing financing.”

Donald Kaberuka, president of the African Development Bank, added: “The Health in Africa Fund is likely to have considerable growth potential despite the global economic slowdown and we are committed to supporting this landmark initiative.”

The fund will invest in companies that deliver health services including clinics, hospitals, diagnostic centres, laboratories. It will also invest in health management organizations and insurance companies, eye clinics, pharmaceutical chains, logistics companies, pharmaceutical and medical-related manufacturing companies and providers of medical education.

The fund plans to make approximately 30 investments in total, ranging from $250,000 to $5 million across countries including the Ivory Coast, Ghana, Kenya, Nigeria, Senegal, Tanzania, Uganda., Angola, Burundi, Democratic Republic of Congo, Ethiopia, Mozambique, Rwanda, South Africa, and Zambia.