Helio’s Investment Partners has raised slightly over $1 billion for the largest ever Africa focused private equity fund. This is the first time any investment firm has raise more than a billion dollars for any fund that targets investment opportunities on the continent.
The London-based investment group, which was founded almost a decade ago by a Nigerian born deal maker, Tope Lawani, said it stopped taking contributions for its third private equity fund after it reached $1.1 billion.
Bloomberg quoted a Helios statement saying investors in the fund included sovereign wealth funds, corporate and public pension funds, endowments and foundations, and development finance institutions across the U.S., Europe, Asia and Africa.
“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,” CP-Africa quoted Lawani saying.
As one of the world’s fastest growing regions, sub-Saharan Africa has caught the attention of private equity investors who have been encouraged by rising consumer spending and natural resource discoveries in countries like Kenya, Uganda and Mozambique.
The small number of listed firms outside South Africa’s Johannesburg Stock Exchange has left most investors seeking opportunities on the continent to use private equity vehivles as the only way to tap into fast growing sectors such as real estate, retail, oi and gas and technology.
The sectors in sub-Saharan Africa which lured the most capital were energy and natural resources.
But with overdependence on commodities to fuel most African economies, Lawani warned that the recent sharp drop in commodity prices could mean many African countries are likely to suffer from adverse impact on their currencies as capital flows back to the US.
“We are witnessing sharp lower commodities prices and it is reasonable to expect African currencies to lose value against the dollar,” he said, adding that presented 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.”
Helio’s held the previous record for the largest private equity fund in Africa after it raised $908 million in 2011. Other large funds in the region include Edmond de Rothschild $530 million buyout fund.