During the month, there were a number of high profile exits that helped alleviated fears that Africa fails to offer attractive exit options for investors. Emerging Capital Partners exited La Nouvelle Societe d’Assurance Participations SA (NSIA), a West and Central African insurance group, through the sale of its 26.2% stake to the National Bank of Canada and Amethis Africa Finance. Additionally, global alternative asset manager, The Carlyle Group, announced its intention to sell its current minority shareholding in Export Trading Group (ETG) to the company’s management team/founders, representing Carlyle’s first exit in the continent.
In July, major PE deals that made headlines were African Alliance Asset Management investing in logistics firm Atlas Development and Support Services by purchasing 4.3 mn shares, at a price of Kshs. 11.0 per share, to take total ownership to 23.7 mn shares, representing a 5.5% stake. This is an example of a quoted private equity transaction. Adenia Partners, a private equity firm investing in Sub-Saharan Africa, also announced an investment in Cresta Paints based in Ghana, an auto-refinish and industrial coatings manufacturer by partnering with the company’s founders, Mr. Abhay and Mrs. Pradnya Salunkhe through Adenia Capital (III), a USD 125 mn fund closed in February 2012.
The objective of the partnership is to pursue growth opportunities linked to exports, international expansion, product development and implementation of the best and most efficient industrial practices. Adenia plans to offer support in strategic and financial advisory and use its vast network to source new business opportunities for Cresta.
This month’s activities reaffirms that Africa has great prospects for private capital to propel economic growth, and is increasingly becoming attractive to foreign investors. Factors attracting foreign participation in the alternative markets are:
Deep, active and vibrant private markets, (such as private equity, venture capital, quoted private equity, and structured products) are critical for economic growth, and this is an area that the country needs to aggressively develop.
Generally, the key challenges facing investments in private equity, and private markets in Africa, has been: