Pan-Africa investor Emerging Capital Partners (ECP) is eyeing the regional stock exchanges as a route to exit in the coming quarters, although listed exits remain slow due to an overall pull back in emerging markets investing, ECP co-chief executive officer Hurley Doddy said.
“We think the window is still there. For the right asset there is still the possibility of listing,” Doddy told Private Equity International.
These include for profitable enterprises in sectors that are not already well-represented on the stock exchanges and where investors can take a long term view, he said.
This month the firm announced its exit from C-Re Holding, the parent company to Nigeria-listed Continental Reinsurance, in a sale to Saham Finances, the insurance arm of Africa’s Saham Group. The terms of the deal were not disclosed.
The investment was made through ECP’s second fund, a $523 million vehicle launched in 2005.
“We had been in the investment for a while, and during a period of good growth,” Doddy said of the firm’s decision to exit, noting the investment was made pre-crisis in 2007.
Revenues increased around four or five times under the firm’s ownership, he said. “To take it to the next level it needs new owners, new capital and a new five year plan.”
The firm announced in July its exit of west and central African insurance group Nouvelle Societé Interafricaine d’Assurance Participations (NSIA), in a sale to National Bank of Canada and Amethis Africa Finance.
That initial investment was made in 2008 from its third fund. ECP Africa Fund III is a 2010-vintage vehicle that raised $613 million and is currently investing, according to PEI’s Research & Analytics Division.
Doddy declined to comment on returns for either realisation.
“The industry is at a point [where] it is selling some investments that are pre-crisis and post-crisis and in general Africa has been good [in terms of returns] and you can see that in the variety of companies in Africa and interest remains good from strategic investors,” Doddy said.
Other PE firms, including African and international investors, did express an interest in C-Re Holdings and NSIA but they could not compete with strategic buyers, he said.
Since its foundation in 2000, ECP has raised $2 billion to invest in Africa through seven funds, and has made more than 60 investments and 30 exits, the firm said.
Doddy declined to comment on fundraising for its fourth Africa vehicle that launched in 2013 and is targeting $750 million.