Helios sets record for African private equity

The largest ever amount of money for a new private equity fund targeting Africa has been raised by Helios Investment Partners with a $900m investment vehicle.

In the latest sign of burgeoning investor appetite for the continent, the new fund attracted orders of more than $1bn, according to Helios, a pan-African private equity group co-founded by former TPG executive Tope Lawani.

Mr Lawani said that about 70 per cent of the financing came from outside development finance institutions, the highest proportion yet for an Africa fund and illustrative of a broadening spread of interest in the potential for private equity on the continent.

“Investors are more open-minded now. They have seen returns can be found in lots of places not just the large developed markets,” he said.

Helios closes its fund at a time of investor optimism about Africa’s prospects, with more than 10 African economies forecast by the African Development Bank to grow at more than 7 per cent this year while the developed world faces sluggish performance. Growth has been spurred by soaring world prices for commodities in abundance in Africa as well as the rapid expansion of banking, telecoms and other services.

Helios sourced its funding from US university endowments, Asian sovereign wealth funds, large African corporate pension funds and European and American fund of funds as well as development finance institutions, Mr Lawani said.

Until recently, talk of Africa’s brightening prospects had yet to translate into the kind of inflows seen before the financial crisis, when Africa had seen a record $57bn in foreign direct investment.

Other private equity groups, including one created by aid campaigner Sir Bob Geldof, have struggled to raise sufficient financing.

The Emerging Markets Private Equity Association says fundraising for sub-Saharan Africa peaked in 2008 at $2.241bn.

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