Duet Group’s first fund dedicated to Sub-Saharan Africa is on track for a first close in the fourth quarter, Duet director Maty Ndiaye told Private Equity International.
The fund has a target size of $300 million.
Ndiaye declined to comment on the amount raised so far for the Duet Africa Private Equity Fund, but noted investors included development finance institutions, family offices, European and African pension funds and endowments in the US.
“We have a good appetite from private investors,” she said.
The fund is expected to make its first investment early next year following its first close. It will target companies in consumer-related sectors in Ethiopia – where Duet already has a presence – Mozambique, Tanzania and Uganda, as well as Francophone West Africa, Ghana – where Duet has invested – and Nigeria.
The fund will target transactions of $20 million to $50 million, including add-ons, in privately-owned businesses, including family firms facing succession issues.
“The deal flow is quite good,” Ndiaye said. “It’s about sourcing methodology and in these countries we feel that our capital is quite competitive compared to alternatives available to entrepreneurs,” she said in reference to typically expensive bank debt.
The fund, which has an eight year plus one structure, will be Duet’s first focused on the region following the abandonment of plans, reported by PEI in 2011, to launch a $150 million growth capital fund with TLP the following year.
“That fundraising didn’t happen. It was more about putting together a strategy,” she said of the partnership with TLP.
On a deal-by-deal basis, Duet has already invested about $140 million in three transactions in the region. The firm invested $90 million into Ethiopia’s Dashen Brewery in 2012 in a consortium with Deutsche Investitions- und Entwicklungsgesellschaf and London-based Vasari Group. In 2014, Duet invested $50 million across two Ghanaian companies, supermarket Shop N Save and food manufacturer GNFoods.