Convergence collects more than $200m for African ICT

The South African firm has sealed a final close on its latest fund after enlisting the support of domestic, regional and global institutions.

Johannesburg-based Convergence Partners (Convergence) has reached a second and final close on its Communication Infrastructure Fund (CPCIF) on more than $200 million.

The milestone, reached less than two years after the vehicle was officially launched, allows CPCIF to retain its position as the largest fund solely dedicated to information and communication technology (ICT) infrastructure in Africa, Convergence said in a statement.

CPCIF was brought to a close thanks to the backing of the Public Investment Corporation, a South African quasi-public entity responsible for investing the Government Employees Pension Fund, and an Africa-focused fund of funds, the firm said. 

Cornerstone investors in the vehicle, which helped bring it to a $145 million first close in November 2013, include the International Finance Corporation, the European Investment Bank, the Dutch Development Bank (FMO), the Development Bank of Southern Africa and the UK’s CDC Group. CPCIF had an initial target of $250 million.

“We believe the current fund size is well suited to the scale of infrastructure investment opportunities we are seeing across the continent, including fibre, data centres, wireless/spectrum, fintech and ICT platforms that enable e-learning and broadcast and media,” said Andile Ngcaba, chairman of Convergence.

The firm says the fund is set to benefit from a “strong pipeline” of investment opportunities, notably in West Africa, where Convergence is opening a Nigerian office.

CPCIF’s portfolio already includes Comsol, a wireless network business, and FibreCo, a national long-haul network, both based in South Africa. The fund is also invested in Synergy Communications, an investment platform for enterprise and wholesale communication services providers across sub-Saharan Africa.

Founded in 2006, Convergence is not new to Africa’s ICT sector. High-profile deals it has closed in the region include SEACOM, the first undersea fibre system serving East Africa, and New Dawn, Africa’s first private sector communications satellite. The firm sold its stake in the latter in October 2012.