Private equity firm Emerging Capital Partners has rounded up $613 million in commitments for Africa Fund III, which originally went to market in 2008 with a $1 billion target.
The fund had an “initial capitalisation of $310 million”, according to 2008 documents on the website of the Overseas Private Investment Corporation (OPIC), which committed $60 million.
ECP was unavailable to comment at press time.
The firm said in a statement that the fund close represented one of the largest Africa-focused private equity funds raised to date. Its prior vehicle closed on $523 million in May 2007.
Returning investors committed $450 million of the total capital raised for Africa Fund III. These included the African Development Bank, the International Finance Corporation, OPIC and CDC, and the UK government-backed development finance institution. The remainder of the fund received commitment from new investors, including pan-African fund of funds manager, South Suez.
ECP has invested $180 million from its Africa Fund III in four separate investments: Financial Bank, which provides banking services across Central and West Africa; Wananchi Group, a television and internet provider in East Africa; Groupe NSIA, an insurance provider in West and Central Africa; and Madagascar and Cote d’Ivoire-based canned tuna provider Thunnus Overseas Group.
The fund will continue ECP’s investment strategy of seeking controlling stakes or minority positions in high growth companies via equity and quasi-equity investments. The fund will additionally target a wide-range of sectors including telecommunications, natural resources, financial services, agriculture, transportation and utility businesses.
‘’Investors can see development models that were successful in India, Brazil and Mexico and project that growth onto Africa,’’ said co-chief executive officer of ECP, Vincent Le Guennou, in a statement.
In 2008, roughly 85 million African households earned an annual income of $5,000 or more. That number is expected to climb over 50 percent over the next 10 years to 128 million households. By 2030, the continent’s top 18 cities could have a combined spending power of $1.3 trillion, according to the McKinsey Global Institute.
Washington DC-based ECP is an international private equity firm focused on investments across the African continent. Created in 2000, the firm manages seven funds across 40 African countries. The closing of Africa Fund III brings the firm’s total capital raised to $1.8 billion, with roughly $1 billion of capital invested to date.