Catalyst holds $103m first close on Fund II

The fund, which is targeting $175 million, will focus on investments in East Africa.

Catalyst Principal Partners has held a first close on its second fund on $103 million, according to a statement from the firm.

Catalyst Fund II is targeting $175 million and is expecting to hold a final close later this year. The fund is larger than its predecessor, a 2011-vintage fund which closed on its $125 million hard-cap.

Asante Capital is acting as placement agent for the fundraise.

The new fund will continue the strategy of its predecessor, focusing on mid-market growth capital investments within fast growth sectors driven by consumer demand across Eastern Africa.

The firm’s focus sectors include consumer goods and retail, financial and business services, healthcare, industrials, manufacturing and value-add processing, technology and telecommunications.

Investors in the previous fund include several development finance institutions, including the European Investment Bank, CDC Group, the International Finance Corporation, and Proparco.

Catalyst said Fund II is supported by a “diverse group of leading global investors”, including funds of funds, development finance institutions and family offices.

“Catalyst has demonstrated its ability to source proprietary deals and actively manage its investments, and has built a diversified regional portfolio of leading products and brands that are dominant within their respective markets and consumer segments, with a focus on increasingly aspirational mass market and middle income consumers,” Paul Kavuma, chief executive of Catalyst, said in the statement.

Fund I is fully invested in nine companies, which are performing “in line with the investment strategy”, the firm said. Previous Catalyst investments include Kenya’s GoodLife Pharmacy, which it sold to emerging markets profit-with-purpose investor LeapFrog Investments in November 2016, the first exit from Fund I.

Among its other investments are Jamii Bora bank in Kenya, Tanzanian plant hire company EFFFCO, and Ethiopian beverages business Yes Brands.