Ascent Africa private equity fund eyes $60 million by mid-2015

by Reuters 0

The private equity firm also plans to announce completion of its first investment in about two weeks, a partner said on Monday.

Ascent is one of several private equity firms to launch in recent years in the region, seeking to take advantage of swift growth rates and expanding populations.

(READ MORE: East Africa targets inclusive prosperity for all)

The Ascent Rift Valley Fund, domiciled in Mauritius, launched in February last year with about 40 million dollars aiming to invest between two million dollars and 10 million dollars with each investment in companies seen benefiting from expanding consumer demand.

Guy Brennan told Reuters that Ascent aimed to increase the fund to 60 million dollars, which would probably be its upper limit.

“We would like to have this done before the middle of the year,” he said. “We feel the right size of the fund is probably 60 million dollars.”

The fund’s first investment would be 2.5 million dollars in an Ethiopian healthcare services provider, giving Ascent a roughly 50 per cent stake, Brennan said, adding that completion of the deal would be announced “in a week or two’s time”.

Ethiopia is Africa’s second most populous nation with about 96 million people and has one of the fastest growing economies, expanding at eight per cent or more a year, although banking, telecoms and retail are off limits to foreign investors.

(READ MORE: Ethiopia’s impressive economic growth)

Ascent has offices in the three East African economies where it will invest, namely Kenya, Uganda and Ethiopia. Sectors it will focus on include services and distribution firms, as well as manufacturers.

Investors include the Norwegian Investment Fund for Developing Countries (Norfund), Development Bank of Austria (OeEB), Kenyan pension funds and institutions, such as Kenya Power and Lighting Company (KPLC), and other private investors.