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London-based investment group Helios Investment Partners has created the first billion dollar plus Africa-focused private equity fund.
The group, founded by Nigerian expats in 2004, operates a family of funds and their related co-investment entities, pursuing a full range of investment types, including business formations, growth equity investments, structured investments in listed entities and large scale leveraged acquisitions across Africa.
According to CP-Africa, around 60% of the fund comes from existing investors.
The fund shows just how much the African investment space has grown in the past few years and, if Helios co-founder Tope Lawani is to be believed, also signals an increased level of maturity in the kind of investments being made on the continent.
Fueled by fast-growing economies, more geo-politcal certainty, and a rising middle class, Lawani reckons that “the size of the capital raising and the participation of pension funds and sovereign wealth funds is a sign that private equity in Africa is maturing”.
He did however warn that foreign investments could see returns flowing away from Africa and back to people in the countries where the funds are based.
“We are witnessing sharply lower commodities prices and it is reasonable to expect African currencies to lose value against the dollar,” he said. But he claimed that the downturn would turn into an opportunity for investors holding large amounts of US dollars, such as Helios. “It is an excellent time to invest: asset values are going to come down,” he said.
Helios’ new fund is the largest earmarked for the continent to date, surpassing the US$908-million it raised in 2011. Other large players to have set up dedicated African funds include a US$700-million fund raised by US buyout group Carlyle in 2014, with US rivals KKR and Blackstone also striking deals.