Britam Holdings Limited, with operations in Kenya, Tanzania, South Sudan, Uganda, Rwanda, Malawi, and Mozambique announced its intention to acquire an undisclosed stake in Tiserin Capital, following approval from its board of directors.
Tiserin Capital is a private equity firm that manages the Tiserin Capital Fund, which invests in companies with enterprise values of less than 5.1 billion shillings (USD 50.0 million) in East Africa, Ethiopia, Mozambique, and South Africa taking up a controlling stake or a strong minority position.
Tiserin Capital seeks to partner with Asian and Latin American companies to enhance the operating capabilities of its portfolio companies by transferring industrial and managerial know-how.
The Fund focuses on Agribusiness, Fast Moving Consumer Goods, Food Retail, Healthcare, and the Technology sector.
With the move, Britam seeks to diversify its investments beyond traditional investments as the acquisition will offer Britam indirect ownership in the private firms that Tiserin Capital will invest in.
Britam Asset Managers, a subsidiary of Britam Holdings Limited in January of this year, bought a 40.0 percent stake worth 1.4 billion in a local electricity producer, Gulf Energy, through a New York-based energy investment vehicle Everstrong Capital.
Analysts from Cytonn Investments are of the view that the acquisition is driven by private equity investments in Africa remaining robust and the need for investment managers to diversify their investments and grow their return as evidenced by the increasing investor interest.
Cytonn attributes their views to
- Rapid urbanization,
- A resilient and adapting middle class and increased consumerism,
- The attractive valuations in Sub Saharan Africa’s private markets compared to its public markets
- The attractive valuations in Sub Saharan Africa’s markets compared to global markets
- Better economic projections in Sub Saharan Africa compared to global markets.