Saudi prince backs $500m Zephyr fund

Zephyr Management has quadrupled its African fundraising efforts. The fund has a $250 million cornerstone investment from Saudi Arabian listed firm Kingdom Holding, led by prince Alwaleed bin Talal bin Abdulaziz Alsaud.

Emerging markets buyout firm Zephyr Management is raising a $500 million (€704 million) fund for pan-African investment, according to an investor in the fund.

The buyout firm has received a $250 million commitment from Saudi Arabian-listed company Kingdom Holding, he said. Kingdom’s executive chairman is prince Alwaleed bin Talal bin Abdulaziz Alsaud.

The fund is likely to have its first close by the end of the year and its final close in 2008.

The buyout firm has quadrupled its activities in the region in comparison to its third fund which raised $122 million in 2004. This fund currently has realised and unrealised value of approximately three times the initial capital, the source said. Zephyr's pan-African strategy worked well, he said.

Kingdom is also a cornerstone investor in this fund.

Emerging Capital Partners, one of Zephyr’s rivals in Africa, revealed last week that it had spent 80 percent of its $523 million pan-Africa fund in less than a year. Once this is fully committed next month, it is likely Emerging Capital Partners will attempt to raise a larger fund.

Other firms raising pan-African funds include UK emerging markets investors Actis and Aureos.