Abraaj targets $800m for sub-Saharan Africa fund

The International Finance Corporation is considering an allocation of up to $50m to the vehicle

Abraaj Capital is currently in market raising $800 million for a sub-Saharan-focused fund, according to a filing by the International Finance Corporation (IFC), the investment arm of the World Bank.  

Abraaj Africa III will target mid-market growth opportunities in sub-Saharan Africa. The fund will invest in “well-managed mid-size companies with established business models” which are ready for national or regional expansion, it added. Abraaj will partner with companies that have the capability to create value through a combination of organic expansion, acquisitions and consolidation strategies. 

The IFC aims to invest up to $50 million in the fund and will not exceed 20 percent of the total committed capital. It will make a decision on the proposed commitment next week.

As well as raising its sub-Saharan fund, Abraaj is also attempting to collect $200 million for its North African Fund II, according to a filing by the European Bank for Reconstruction and Development (EBRD). The EBRD is considering a commitment of up to $25 million to the fund, which has a $300 million hard-cap.

Abraaj’s North African Fund II will invest in small and medium-sized companies operating primarily in Morocco, Tunisia, Egypt and Algeria. The group, which has been investing in Africa for the past two decades, has deployed $2.6 billion across 80 investments.

It is unclear when the funds precisely came to market. Abraaj declined to comment.

Abraaj is not the only GP who believes sub-Saharan Africa offers attractive investment opportunities. Last week, The Carlyle Group and The Blackstone Group both formed strategic partnerships with Dangote Industries, an African business conglomerate, in a push to target energy-focused deals in sub-Saharan Africa. Blackstone and Dangote will jointly invest up to $5 billion over the next five years in African energy infrastructure, with a particular focus on power, transmission and pipeline projects, the firm said.

As well as targeting investments in energy, Carlyle will team up with Dangote to co-invest in the consumer, financial services and agribusiness companies – for which Carlyle will use its sub-Saharan fund, a $698 million vehicle that closed in April, the firm said.