Carlyle inks first deal for Africa fund

The firm has partnered with Standard Chartered and the South Africa-based Pembani Remgro Infrastructure Fund to acquire a minority stake in agricultural company Export Trading Group for $210m.

The Carlyle Group's investment in Export Trading Group, a business that supplies African agricultural products such as grains, nuts and fertiliser to farms and global consumers, represents the firm's first investment from the Carlyle Sub-Saharan Africa Fund, which launched last year with a $500 million target.

“This is a remarkable opportunity to invest in a business with a proven model that is highly scalable, has delivered impressive financial performance and has tremendous development impact on Africa and its economies,” Carlyle managing director Marlon Chigwende said in a statement. The club deal is expected to close by the end of November.

Standard Chartered’s Africa Private Equity division previously invested $74 million in Export in January. 

In March, Carlyle won a $50 million commitment from the African Development Bank for the firm’s debut sub-Saharan fund, which will target buyout and growth capital investments in 15 countries, focusing on large single-country companies seeking to expand or vertically integrate across the region. The fund will have the potential to invest up to $1 billion in the region by co-investing with other Carlyle funds, according to ADB.

Carlyle expanded into Africa last year, appointing Chigwende and managing director Daniel Jordaan to lead the firm’s effort from Johannesburg, South Africa.

Some private equity investors remain wary of Africa, due to ongoing concerns about political unrest, piracy and corruption. However, the African economy is estimated to be expanding at roughly 10 percent a year, and Africa’s growing middle class is expected to be spending $2.2 trillion per year by 2020, representing a potentially huge investment opportunity.

Other managers currently looking at raising fresh capital to invest in Africa include Jacana Partners, which focuses on small and medium-sized enterprises and will formally hit the fundraising trail next year.