Atta Africa Financial Update

Executive summary: With African assets cheaper, low valuations are expected to bring buyers back into the market with increased transaction activity and growth.

Despite the well known challenges represented by potential political and economic risks, the outlook for emerging-market private-equity funds looks positive.

Internationally, institutional investors are allocating more money to private markets to diversify their revenue streams and find alternative sources of return in a world of lower growth. There has also been a trend for traditional money managers to buy stakes in alternative investment firms, particularly private equity and real estate managers.

With rising political risk in developed regions such as the US and Europe, emerging markets are increasingly seen as more attractive in relative terms. In the context of sub-Saharan Africa, private-equity funds offer investors access to assets that have strong growth potential in a region where stock exchanges are still developing.

However, for private equity fund managers, deciding which countries and industries to invest in has become more complex. Prospects vary between countries and economic sectors, with adequate diversification a strong defence for fund managers against unexpected and increasingly prevalent local and global events.

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Carlyle Group agrees to acquire Royal Dutch Shell‘s Gabon assets for US$587 million

  • Assala Energy, an oil and gas exploration and production company established by Carlyle in 2016, along with capital from two of Carlyle’s funds (the US$2.5 billion Carlyle International Energy Partners fund and Carlyle’s US$698 million Sub-Saharan Africa Fund) will finance the transaction

CDC and AgDevCo to back Jacoma Estates with US$11.5 million

  • CDC, the UK government’s development finance institution, and social impact investor AgDevCo have teamed up to back Jacoma Estates with US$11.5 million in equity and debt
  • The capital will be used to fund the macadamia nut producer’s expansion plans for its farming operations in Northern Malawi
  • CDC is providing the lion’s share of the capital, US$8 million in equity, whilst AgDevCo is providing the balance of US$3.5 million as a mix of debt and preference shares

Ascent Capital to back Kisumu Concrete

  • Private equity firm Ascent Capital is making an investment in Kisumu Concrete Products, a Kenyan construction materials manufacturer
  • The investment (details undisclosed) is reportedly for working capital to help fund growth