Markets & Finance

Ascent East Africa fund eyes Sh5.4bn by mid-year

Private equity firm Ascent Capital wants to increase its east Africa fund to $60 million (about Sh5.4 billion) by mid-2015 from $50 million (Sh4.5 billion) it has raised so far and plans to announce completion of its first investment in about two weeks, a partner said on Monday.

The new goal is $10 million lower than the target shared with Business Daily in several interviews last year.

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: Region’s growing GDP attracts global equity funds.

The Ascent Rift Valley Fund, domiciled in Mauritius, launched in February last year with about $40 million aiming to invest between $2 million and $10 million 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, 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.”

The fund’s first investment would be $2.5 million 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 8 per cent or more a year, although banking, telecoms and retail are off limits to foreign investors.

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. -- Reuters