Markets & Finance

Ascent Capital opens Kampala office with eye on deals

DAVE

Ascent Capital partner David Owino. PHOTO | SALATON NJAU

Ascent Capital, a private equity firm based in Nairobi, has opened an office in Kampala to make it easier to scout for deals and work with small firms in which it plans to invest in.

The firm has identified a Ugandan fast-moving consumer goods company in which it will invest Sh900 million ($10 million) of the Sh4.5 billion ($50 million) that it raised earlier in the year.

Part of Ascent’s investment criteria is to invest between $2 million (Sh178 million) and $10 million (Sh890 million) per company.

Mr Richard Mugera, who will head the Ugandan operations, said the firm is targeting SMEs that need both financing and expertise to substantially grow.

“The growth of promising Ugandan enterprises is sometimes hampered by lack of access to growth capital and external support.

Unique investment

‘‘We believe that with this office and our close engagement with the Ugandan entrepreneur we will be able to navigate the unique investment environment with focus on providing the right fit of growth capital and significantly contributing to Uganda’s investment landscape,” said Mr Mugera in a statement.

The Uganda office will be followed by another one to be opened in Addis Ababa by end of the year. Ascent Capital has also identified a SME in Ethiopia’s healthcare industry where it will invest part of the $50 million.

Global and regional private equity firms have been raising cash in the last couple of years to invest in SMEs in the region with preference for firms in the consumer goods, health, education and IT industries.

Preferred exit route

Amethis, a French private equity firm, raised $530 million shillings (Sh47.17 billion) in June to invest in first growing firms in Africa.

Earlier, Kibo Capital Partners had raised Sh4.38 billion to invest in SMEs in the East African region.

An industry report by law firm Freshfields Bruckhaus Deringer said that while the majority of the deals have been in Nigeria and South Africa, there is now increased focus on East Africa.

“Global investors are also beginning to show significantly more interest in east African assets, with 41 per cent of their deals in the region since 2004 coming in the past two years,” said the report.

Ascent was formed by former Centum executive David Owino, Australian investment banker Guy Brennan and former Nokia executive Lucas Kranck.

The preferred exit route will be by selling to other private equity firms or listing on the stock exchange.