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Carlyle Group Sees More Opportunities In Africa After Nigeria Investment

Carlyle Group Sees More Opportunities In Africa After Nigeria Investment

US-based private equity firm Carlyle Group says its bullish about Investing in Africa despite various challenges, such as increased militant attacks, heightened political instability in some countries and a weakening currencies as oil prices drop globally.

“The great explosion in private equity, if it is going to occur anywhere around the world in the next couple of years, is probably going to be in Africa, particularly sub-Saharan Africa, where the penetration rate is about one-twelfth or so of what it is in the United States,” Carlyle co-CEO David Rubenstein said during the US-Africa Leaders Summit held in Washington DC in August.

“Typically we like to go where there isn’t a large penetration rate because that means there is not that much competition,” he added.

Rubenstein said the global PE firm remained particularly optimistic about Nigeria, a country that overtook South Africa as the largest economy in Africa earlier this year after rebasing and including new sectors such as Nollywood.

Last week Carlyle announced it has made a $147 million investment in Nigeria’s Diamond Bank, based in Lagos. The investment came through the bank’s recent rights issue, of which proceeds will be used to boost working capital, IT infrastructure and refurbishment of its branches.

The Diamond Bank deal was made through Carlyle’s $698 million Sub-Saharan Africa Fund.

“Nigeria is the largest and one of the fastest growing economies in Africa, and Diamond Bank is well positioned to continue to benefit from Nigeria’s attractive macro-economic trends,” said Genevieve Sangudi, Carlyle’s managing director for Sub-Saharan Africa Fund.

Africa’s richest man Aliko Dangote has also partnered with Carlyle as well as another leading private equity firm, the Blackstone Group, to invest in energy infrastructure in Nigeria and Africa.

To date the Fund has invested approximately $300m across a variety of industries and countries, including a Tanzanian-based supply chain manger and in a Mozambican logistics company. Africa’s richest man Aliko Dangote, and the African Development Bank are two of the fund’s anchor investors.