Africa-focused private equity firm Helios Investment Partners is targeting up to $600 million in commitments for its second fund.
UK government-owned fund of funds CDC Group has committed $75 million, while Helios Investors II has also garnered $60 million from the IFC, the fund investment arm of the World Bank.
According to documents released by the IFC, the fund will consider investments in companies mainly located in Nigeria, Ghana, Angola, Cote D’Ivoire, Kenya, Tanzania and Uganda, while other African countries may be considered opportunistically. It is expected to invest around 50 percent of its capital in infrastructure-related projects including power, railway and telecom infrastructure, the document said.
We hope that our $100m investment in Helios' and DPI's funds will encourage others to invest in the funds alongside us.
Helios did not respond to requests for comment on the fundraising.
This is the second time CDC has backed Helios – it was the largest investor in its $305 million Fund I – and the commitment is one of two African investments for the development-focused fund of funds as it rounds off 2009. It has committed €20 million to a €270 million fund run by Development Partners International. The African Development Partners fund will invest in companies in a variety of sectors, with a particular emphasis on post-conflict, newly-liberalised countries such as Rwanda and Angola.
Commitments from development finance institutions such as CDC and IFC have proved vital in enabling continued private equity fundraising in Africa amid difficult conditions. Much of the commercially- driven Western European and American institutional money that had sought the enhanced growth opportunities offered by Africa during the boom years has withdrawn to focus on opportunities in home markets.
“Largely this is because there is such a good array of credit and distressed opportunities available in the US and Europe that it just has not been attractive to take the extra risk,” said David Hutchings, head of private equity for adviser Albourne Partners, in an interview with sister magazine Private Equity International.
Richard Laing, chief executive of CDC Group commented: “In today’s difficult investment environment, development finance institutions such as CDC are acting as investment pioneers and we hope that our $100 million-plus investment in Helios’ and DPI’s funds will encourage others to invest in the funds alongside us.”