Pan-African buyout firm Emerging Capital Partners looks likely to hit the fundraising trail, as it is close to fully investing its latest $523 million (€369 million) fund.
The firm’s first independent fund is 80 percent committed three months after its final close in June, according to chief executive Tom Gibian. He declined to elaborate on specific fundraising plans.
Competitors such as the UK's emerging market buyout firms Aureos and Actis are also in the market to raise regional funds of a similar size to Emerging Capital Partners’ latest fund. It is likely the firm will attempt to move upwards in scale for its next fund given the competition. “When others begin to crowd your niche, you need to find another niche,” Gibian said.
The firm has been investing its fund since its second close in December. The rapid speed of investment is in contrast to the deployment of the group’s predecessor vehicle AIG Africa Infrastructure Fund, which raised $400 million in 2000.
As the first major regional fund on the continent at the time, and with typical investments of between $20 million and $40 million, the first fund took longer to invest.
While managing that fund, Gibian and his team worked at emerging markets private equity firm EMP Global, which had the US insurance giant AIG as a cornerstone investor.
ECP is now an independent firm, although its current fund is still badged EMP Africa Fund II.
“There is every reason to expect African economies will grow at 5 to 6 percent for the next ten years. It’s the growth rate it has to set if it’s going to succeed. Results in Africa will remain largely uncorrelated with North America, Europe and the global economy.”
This will insulate Africa from the problems in the wider world economy because investment in the region is not driven by hot money or excessive leverage, Gibian said.