The story in numbers
In November 2013, Swedfund and the Abraaj Group partnered with Nairobi Hospital in a $6.5m (KSh559m) equity investment to increase healthcare access. Two significant PE investments were made in real estate after investment firm Britam acquired a 25% stake in property development firm Acorn; and Fusion Capital backed the 4.5m Grand Park residential estate.
A month earlier, Fanisi Capital acquired a $3m stake in Kenyan pharmaceutical chain Haltons in Rwanda, underlining the interest in the regional healthcare sector. Dutch-based Africa Media Venture raised its stake in Kenyan restaurant guide EatOut to $200,000.
East Africa’s agricultural sector has also attracted its share of attention. In March 2014, Pearl Capital bought a $2.2m minority stake in Kenyan agro-processor Eldoville. The investment came five months after the firm invested $4m in Uganda’s Biyinzika Enterprises and nine months after a $592,000 injection into seed distributor Freshco Kenya.
Swedfund and the Abraaj Group partnered with Nairobi Hospital in a $6.5m (KSh559m) equity investment to increase healthcare access
Fanisi Capital also recognised the potential of agriculture in East Africa in 2013 with a $3m investment in Rwanda’s ProDev Group Holdings. Alongside interest in consumer-driven sectors, large regional deals are expected in the extractive industries, driven by oil and gas exploration activities. The nascent mining sector has already begun to attract funds, and in 2013 British oil-prospecting firm Delonex Energy received a $60m boost from the International Finance Corporation (IFC). The IFC also plugged $4m into healthcare through healthcare provider AAR.
These are just some of the deals on the PE front – without even considering mergers and acquisitions, which were more popular in 2013 than PE deals. And the trend has continued in 2014. In February, Actis announced a 36% equity investment in the AutoXpress group, East Africa’s leading tyre wholesaler and retailer. In March, the Dutch-based PE firm DOB Equity, which has interests in Tanzania, Uganda and Burundi, opened offices in Nairobi, suggesting that PE interest in East Africa is not waning.
Banks have also benefited, including those with a regional presence such as Kenya Commercial Bank, Diamond Trust Bank and Chase Bank. Chase Bank, for instance, received a $10.5m investment from Amethis Finance in March 2013, and eight months later $10m from French banking institution DEG. Both deals were motivated by Chase’s focus on the SME, agricultural and Islamic finance segments, making it obvious that these are considered key growth segments. Vimal Parmar of corporate advisory group Burbidge Capital expects to see more mergers and acquisitions and capital raisings.