Actis, the private equity investor in emerging markets, has been selected to co-manage the C$200 million (€122 million; $145 million) Canada Investment Fund for Africa (CIFA).
The fund, which will be launched later this year, will comprise C$100 million from the Canadian government, with a similar amount to be raised from third party investors.
CDC Capital Partners, the UK-based emerging markets investor is understood to be investing C$30 million in the fund, alongside a commitment of C$15 million from the fund co-manager, IFPT Management (IMI), a Montreal-headquartered portfolio company that manages emerging market funds for Canadian pension plans.
Following a detailed selection process that began in December 2002 and involved bids from 22 fund managers, CIFA will be jointly managed by Actis and IMI.
The two firms, who did not submit a joint bid, will have joint responsibility for raising the remaining C$55 million, which is likely to come from Canadian financial institutions and other financial institutions interested in investing in the African market. CIFA’s stated objective is to invest in African companies to generate economic growth in a commercially viable and self-sustaining manner.
The announcement is the first endorsement of Actis as an independent private equity investor since it split from CDC in January this year. Sources close to the process said Actis' now independent status from the UK government was a key factor in the Canadian government's decision to award them the mandate. Since the split, Actis’ aim is to increase its funds under management from $2.5 billion to $3 billion dollars within three years.
Paul Fletcher, chief executive of Actis said in a statement: “Actis was chosen for its investment experience and extensive presence across Africa and for its strong investment team led by Nkosana Moyo.”
In 2003, Actis invested over $130 million in Africa and realised more than $18 million from sales of existing portfolio companies.