Ascent Capital Seeks $120 Million for East Africa Businesses

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By David Herbling

Published December 6, 2018, 7:09 AM GMT+3 Updated on December 6, 2018, 10:15 AM GMT+3

Ascent Capital Africa plans to raise $120 million for its second fund that will invest in mid-sized companies across East Africa, where domestic demand is expanding.

The private-equity firm is the latest to tap into surging investor interest in the region. Centum Investment Co., Kenya’s second-biggest publicly traded investment company, is planning to raise 50 billion shillings ($487 million) for its second fund, while closely held Catalyst Principal Partners last month raised $155 million.

Ascent, based in Nairobi, plans to woo Kenyan pension funds and businesses that invested in its inaugural $80 million fund, co-founder Lucas Kranck said Monday in a phone interview from the Kenyan capital, Nairobi. The European Investment Bank is considering investing $25 million in the fund, he said.

“We have started speaking with development-finance institutions because they need time to do due diligence and make decisions,” Kranck said. “We also hope to get more Kenyan institutional money into the fund.”

Ascent’s new fund, christened the Ascent Rift Valley Fund II, will be based in Mauritius and targets raising as much as $90 million in the first round, which is expected to close in the third quarter of 2019. The final target is expected to be achieved 12 months after the first close, he said.

EIB Decision

The EIB’s management committee will make a decision on its potential investment early next year, a spokesman for the Luxembourg-based lender said Wednesday by email.

The value of private-equity deals in East Africa surged to $482.1 million in the eight months through August, compared with just $19 million a year earlier, according to I&M Burbidge Capital Ltd., a Kenyan financial-advisory group.

The ARVF II fund, which is seeking a 20 percent internal rate of return, is banking on its team’s “deep local knowledge” to attract investors, Kranck said. He’s worked in East Africa for more than a decade, serving as regional general manager for Nokia Solutions & Networks Oy. David Owino, another co-founder, was previously director of private equity at Centum.

Ascent plans to make new investments in fast-moving consumer goods, health-care, manufacturing and financial-services companies in Tanzania and Rwanda, adding to Kenya, Uganda and Ethiopia, which were covered under the first fund, Kranck said. Continue reading...

Source: Bloomberg Africa