Private equity firm Ascent Capital has raised $128 million (Sh15.4 billion) in a new fund whose proceeds are to be invested in small and medium-sized enterprises (SMEs) in East Africa.
The firm said that its Rift Valley Fund II (ARVF II) exceeded the $120 million (Sh14.4 billion) target and will be invested in manufacturing, wholesale and retail trade services, financial services, education, healthcare, and agro-processing sectors.
Ascent said it is not specifically targeting buy-outs but will instead avail growth capital to the small businesses in Kenya, Ethiopia, Uganda, Rwanda and Tanzania.
“We are targeting to invest in companies that will bring in a lot of growth by creating high-quality jobs as well as work with entrepreneurs to improve their governance structure, and increase their product diversification” said David Owino, managing partner at Ascent Capital Advisors.
The new fund has an investment window of 10 years, which is on the longer end of the normal PE investment horizon of between seven years and a decade.
Mr Owino said some of the new investors coming into the fund are commercial investors from Europe and from East Africa, with more than 10 percent of the commitments coming from local institutional investors.
ARVF II has already produced three investments in the financial and healthcare services sectors including Valley Hospital in Nakuru and Diani Beach Hospital in South Coast, Kenya.
Investors in the new fund include BIO (Belgian Investment Company for Developing Countries, BII Group (the UK's development finance institution), FMO (Dutch entrepreneurial development bank) and IFC.
Others are Norwegian Investment Fund for developing countries Norfund, SDG Frontier Fund and major Kenyan pension funds.
Ascent Capital last year also raised $100 million (Sh12 billion) from the World Bank and top sovereign funds for acquiring stakes in companies across Eastern Africa.
The cash was raised from IFC, which is the World Bank Group’s private sector financing arm, BII Group, Dutch development financier FMO, and the French development finance institution, Proparco alongside other high net worth investors.
