Aureos Africa Fund raises up to US$317.8 million despite gloomy markets

Focus on small to medium-sized companies with domestic or regional growth potential
Fund has already made nine investments in companies operating across 15 countries

Aureos Africa Fund has increased its funds under management to US$317.8 million, after its initial closing in September 2008. The Aureos Africa Fund is an initiative of Aureos Capital, the private equity fund management company specializing in investing in small to mid-sized businesses in emerging markets.

The Fund invests in businesses in Africa, across several sectors, countries and transaction types, focusing on those investment opportunities where Aureos can see potential to achieve above average growth via regional expansion.

The Fund has so far made nine investments across sectors such as financial services, TMT, FMCG, building products, real estate development and agri-business. The companies operate in more than 15 different countries in total, reflecting the regional character of most of the portfolio companies.

The investor base, which at first close consisted mainly of International Finance Institutions and US-based private sector investors, has been further diversified with recent commitments from European pension funds, family offices and commercial banks, as well as from European Development Finance Institutions.

Sev Vettivetpillai, CEO of Aureos Advisers Ltd comments: “Drawing from our significant investment experience in Africa we were confident that the Aureos track record was of great interest to investors who had appetite for investing in Africa, despite the global turmoil. Our ability to raise additional capital for the Aureos Africa Fund demonstrates that fact.”

“Despite the global economic slowdown, we are seeing continuous economic growth in Africa and foreign direct investment seems to be picking up providing a vibrant economic platform for building a well diversified portfolio of sustainable companies in the SME segment of the market.”

Davinder Sikand, Regional Managing Partner of Aureos Africa, explains that small and medium-sized businesses are becoming key players in domestic demand and supply chains, which make them very well-placed to achieve critical mass and pursue regional growth strategies.

Says Davinder Sikand: “We are building an exciting investment portfolio across the African continent. This clearly demonstrates Aureos’ business model to partner with leading mid-market companies and to build sustainable first-rate regional businesses through both organic growth as well as M&A driven strategies.”

“We are beginning to develop relationships between portfolio companies at opposite ends of the continent – which we see as a first step towards building pan-continental businesses that will truly capitalise on the enormous opportunities on the ground in Africa today”.

Aureos has built a successful track record of investing in Africa through its first generation regional funds in East, West and Southern Africa, having invested $140 million in 34 investee companies.

The Aureos Africa Fund seeks to make initial investments of up to US$10 million in small to mid-size companies with a strong potential to expand to pan-African businesses within 2 to 3 years via “buy and build” strategies and/or through carefully executed organic growth.

The Fund expects to reach its final close by mid-December 2009.

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Aureos Africa Fund raises up to US$317.8 million despite gloomy markets

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