Helios Investment Partners, a London-based group founded almost a decade ago by Nigerian born deal makers has raised Africa’s first $1 billion plus private equity fund.
The size of the deal points to the growing appetite for African investments by global investors. The strong growth has encouraged other prominent private equity funds such as the Carlyle Group to launch Africa focused funds.
Dealmaking on the continent has been robust with recent groundbreaking transactions like the alliance between SABMiller and CocaCola grabbing headline news.
About 60 percent of Helios’ new fund comes from existing investors. According to Tope Lawani, Helios’ co-founder, “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”.
However he cautions by alerting that in the near term many African countries are going to suffer an “adverse impact” on their currencies as capital flows back to the US.
“We are witnessing sharply lower commodities prices and it is reasonable to expect African currencies to lose value against the dollar,” he said. According to him, the downturn will 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 held the previous record for the biggest private equity fund in Africa, which it raised in 2011, at $908m. Earlier this year, Edmond de Rothschild amassed $530m for its first buyout fund focused on deals in the continent.
In 2012, Sir Bob Geldof, the musician and campaigner for aid to Africa, raised $200m for his 8 Miles fund focused on the continent.