Emerging markets private equity fund manager Aureos Capital Limited has reached a final close of the Africa Health Fund, exceeding its target by raising US$105.4 million from a range of private sector and development finance institutional investors. The Africa Health Fund was established by Aureos in June 2009 with the International Finance Corporation, the African Development Bank, DEG, and the Bill & Melinda Gates Foundation as cornerstone investors.
Aureos Capital Limited (Aureos) has reached a final close of the Africa Health Fund, exceeding its target by raising US$105.4 million from a range of private sector and development finance institutional investors.
The Africa Health Fund is managed by Aureos, a leading private equity fund management company specialising in small and medium sized businesses in emerging markets.
The Africa Health Fund was established by Aureos in June 2009 with the International Finance Corporation, the African Development Bank, DEG, and the Bill & Melinda Gates Foundation as cornerstone investors.
Subsequent investors include private sector investors such including a major Dutch bank, Elma Foundation, Norfund, Proparco and DBSA, the Development Bank of Southern Africa.
The Fund’s unique objective is to help low income Africans gain access to affordable, high quality health services while providing investors with good long-term financial returns. Its investments will be in small and medium size businesses across the health sector in Africa.
With many of its portfolio companies in Africa major employers, Aureos has extensive experience of establishing employee healthcare programmes to help reduce staff absences due to illness. This work, including a unique HIV-AIDs risk reduction programme for ten of its portfolio companies in Eastern and Southern Africa, has given Aureos an insight into the undercapitalisation and fragmentation that inhibit the growth of healthcare providers in Africa.
Sev Vettivetpillai, CEO of Aureos Advisers says: “The fact that we have exceeded our fund-raising target and attracted a wide range of investors in such a tough climate is testament to the Africa Health Fund’s pioneering purpose.”
“Private healthcare providers are responsible for around half of all health provision in Africa, but their scope to reach more people is limited by undercapitalisation. The Fund’s investors share our view that funding the growth of these businesses and the infrastructure that supports them is crucial to improving the health of Africa’s poorest.”
The Fund’s first investment was its acquisition of a stake in Nairobi Women’s Hospital. The hospital provides health care services mainly for women and children with high quality, good value maternity, paediatric, medical and surgical services. Profits from the hospital’s private services subsidise free-of-charge healthcare provision including a care programme for AIDs/HIV patients and what is believed to be the first Gender Violence Recovery Centre in East Africa.
Subsequent investments include; C&J Medicare Hospital, a leading healthcare provider in Accra, Ghana, which serves private patients including the employees and dependents of over 100 corporate customers as well as individuals attending regular free-of-charge health screening drives; and the Avenue Group, which is the only healthcare provider in Kenya to combine healthcare cover with the delivery of high quality affordable medical services at both the outpatient and inpatient levels.
At present, the Africa Health Fund is finalising or conducting due diligence on more than 20 potential investments. These include companies across the health sector, from healthcare providers to support services and medical supply manufacturers. Further new investments will be announced shortly.
Jacob Kholi, Managing Partner of Aureos West Africa Managers Limited, and Manager of the Africa Health Fund commented:
“The Fund has already made three investments in hospitals and clinics where we know that our unparalleled expertise in working with small and medium sized businesses in Africa will assist their growth as profitable businesses, giving them the means to extend the services they offer to those at the bottom of the income pyramid. This way, the fund will deliver social benefits, as well as profits for our investors.”
“We are also keen to invest all along the supply chain. If we can deliver economies of scale in, for example, the manufacturing of medical devices or in distribution, that should bring benefits to all healthcare providers in the region, whether they are in the public, private or voluntary sectors.”
Specialist healthcare investing – focus on ‘bottom of pyramid groups’
Aureos’ global network of more than 20 local offices covering more than 50 markets has particular expertise in the healthcare sector, with investments in hospitals and medical supply companies across Asia, Latin America and Africa.
The Africa Health Fund supplements this experience with a separate Health Advisory Panel. The Health Advisory Panel includes leading clinicians, professors, entrepreneurs and investors with outstanding expertise and experience in private sector health issues in Africa and other emerging markets.
Additionally, the Fund has access to an $8.4mn technical assistance facility funded by grants from a number of its investors. These funds may be called upon as necessary to enhance the impact of the Fund’s investments particularly on those individuals at the bottom of the economic pyramid by, amongst other things, providing portfolio companies with funding for business development and governance initiatives.
AUREOS CAPITAL LIMITED
Aureos Capital Limited is a private equity fund management company which specialises in providing expansion and buy-out capital to small and medium sized businesses across Asia, Africa and Latin America.
Since its establishment in 2001, Aureos has increased its funds under management to US$ 1.3 billion and extended its geographical footprint to over 50 emerging markets covering Asia, Africa and Latin America, by establishing 17 regional private equity funds.
Aureos’ funds are managed through its network of more than 20 offices worldwide, by a team of over 90 investment professionals who combine world-class financial and operational expertise with unrivalled local knowledge and experience.
Investors in Aureos funds include institutional investors, bilateral and multilateral development finance institutions, pension funds, sovereign wealth funds, fund of funds, family offices and foundations and high net worth individuals.