Emerging Capital Partners has closed its third African fund with over $613 million in capital commitments.
Emerging Capital Partners (ECP), an international private equity firm focused on investing across the African continent, announced today the final close of its ECP Africa Fund III PCC (Africa Fund III) with total commitments of over $613 million. Africa Fund III, one of the largest funds ever raised for investment across the African continent, marks the seventh fund managed by ECP, bringing the firm’s total capital raised to more than $1.8 billion, with more than $1 billion invested to date.
Consistent with ECP’s investment strategy, Africa Fund III will seek controlling stakes or influential minority positions in high growth companies through equity and quasi-equity investments including convertible debt instruments. The fund targets leading companies focused on under-penetrated markets where factors such as industry consolidation, positive macroeconomic trends, liberalization and improved regulations offer opportunities for above-market returns. Investing across various sectors, including telecommunications, natural resources, financial services, agriculture, transportation and utility businesses, ECP will focus on companies pursuing regional strategies.
“The positive response we’ve received from investors for Africa Fund III demonstrates the growing appreciation of the tremendous investment opportunity that exists across the African continent,” said Hurley Doddy, co-chief executive officer of ECP. “With more than a decade of African private equity experience, our team has the optimal combination of local market knowledge, operational prowess and financial expertise to provide investors with diversification and competitive returns by sourcing attractive investment opportunities and expanding our portfolio companies’ business into regional and global markets.”
Africa Fund III received strong support from the global investment community, anchored by over $450 million from return investors, including the African Development Bank, the International Financial Corporation (IFC), the Overseas Private Investment Corporation and CDC, the United Kingdom government development finance institution. The remainder came from new investors such as pan-African fund-of-funds manager, South Suez.
“With its long track record of successful investing in Africa and established presence via six regional offices, ECP is a first choice for us when looking at investing on the continent,” said Matthew Hunt, Director of South Suez.
The Africa opportunity continues with economic growth widely spread across the continent, opening up investment opportunities across sectors and in countries beyond the traditional commercial hubs. The appearance of new technologies such as mobile telephony and the emergence of a middle class have shown that Africa is not simply a “resource play,” as many foreign investors once considered it.
Continental growth is also less likely to stumble as a result of ongoing uncertainty in global credit markets as most African governments, companies and individuals eschewed excessive borrowing. Thanks to debt forgiveness plans, external debt as a percent of economic output in Africa has plunged, improving credit worthiness of the continent.
“Investors can see development models that were successful in India, Brazil and Mexico and project that growth onto Africa,” said Vincent Le Guennou, co-chief executive officer of ECP. “Many see Africa as the next place that’s going to boom as local companies adopt efficient management practices, financial discipline and governance standards.”
Leveraging its African private equity expertise, ECP has begun deploying capital from Africa Fund III, making four investments totaling over $180 million: Financial Bank, which provides banking services in six countries in Central and West Africa; Wananchi Group, the Zuku-branded pay television and high-speed internet provider in East Africa; Groupe NSIA, the West and Central Africa insurer; and the Madagascar and Cote d’Ivoire based Thunnus Overseas Group which provides 25% of the canned tuna in the French market.
Emerging Capital Partners (ECP) is the first private equity firm to raise over $1.8 billion to invest in companies across Africa. The ECP team has a 10-year track record of investing in Africa through seven successful funds, with investments in more than 50 companies across 40 African countries. The firm’s investment strategy is based on delivering consistently above-market returns by focusing on economies uncorrelated to the U.S. and other developed nations. The ECP team operates from offices in Washington, D.C., Abidjan, Casablanca, Douala, Johannesburg, Lagos, Paris and Tunis. For more information, please see www.ecpinvestments.com.