Edmond de Rothschild closes fourth Africa fund above target – exclusive

The firm has raised €375m for Amethis Fund II as it eyes another fundraise on the continent.

Edmond de Rothschild Private Equity, the private asset arm of the global banking group, has raised its largest fund for Africa.

The Paris-based manager held the final close on €375 million for Amethis Fund II, surpassing its €300 million target, senior executives from the firm and Africa-focused investment firm Amethis told Private Equity International.

Edmond de Rothschild Private Equity is investing in the continent through its partnership with Amethis.

The firm held a €305 million first close on the fund in February and counts BpiFrance, the European Investment Bank, International Finance Corporation, Proparco and Madagascar-based conglomerate Axian Group among its investors, according to PEI data.

Most of the LPs in its predecessor vehicle, the 2012-vintage €250 million Amethis Fund I re-upped in Fund II, Luc Rigouzzo, managing partner of Amethis told PEI. Development finance institutions, family offices and private institutional investors accounted for about one third each of total capital raised, he added. The European Investment Bank, CDC Group and DEG are investors in the fund.

Fund II will make investments of between €15 million and €30 million per deal. The firm has already secured one deal and three more transactions will be completed this year, Rigouzzo said.

The firms has raised around €800 million for Africa across the latest vehicle and three earlier funds: the 2012-vintage, €250 million Amethis Fund I; the 2013-vintage, €75 million Amethis Maghreb Fund I; and the 2015-vintage, €84 million Moringa Fund. Capital from these funds made investments in family-owned, small and medium enterprises as they transition from local to regional champions via enhanced governance, said Edmond de Rothschild Private Equity chief executive Johnny El Hachem.

Target sectors are food processing, logistics, chemical and electrical industries, as well as healthcare, education and agriculture.

The firm is also set to come back to market this year with its fifth Africa vehicle targeting €150 million, Riguzzo said. Unlike its predecessor funds, which invested in North and West African countries, the soon-to-be-launched Amethis Maghreb Fund II will also invest in the Middle East, with ticket sizes of less than €15 million. Target markets are Morocco, Egypt and Jordan.

Capital raised for Africa-focused funds increased to $2.8 billion last year from $2.3 billion the previous year, according to data from EMPEA. Investor interest in the region has held steady in recent years with LPs citing scale of investments, a disappointing exit environment and the lack of established managers as deterrents to investing in Africa, according to the industry body’s latest Global Limited Partners Survey.

Edmond de Rothschild Private Equity manages €2.3 billion of assets across strategies including a fund of funds business, diversified minority investments, life sciences, technology, infrastructure, African growth and agroforestry.

Along with its Africa-focused funds, the firm is also raising capital for several other strategies. These include a UK-focused urban regeneration fund with a €100 million target and a growth tech fund in partnership with London-based Kennet Partners, which is seeking €200 million for investments in software, cloud computing, artificial intelligence and other high-tech industries.