Levant Capital has achieved a net internal rate of return of more than 40 percent on its minority investment in APR Energy, a US-headquartered provider of temporary power plants to emerging markets.
The exit comes as the firm is expected to launch a fundraising that would double its assets under management. Its first fund, which raised $200 million in 2007, has deployed roughly 75 percent of its capital. Levant declined to comment on fundraising plans.
During the crisis, the number of private equity investors and AUMs sort of dwindled. Now there are fewer managers chasing after more deals.
The Middle East and North Africa-focused private equity firm in 2009 initially paid $30 million for a “significant minority stake” in APR, but negotiated equal governance rights at the board level.The mid-market firm went on to invest further in the company in several tranches for a total investment of $54 milion.
Levant “worked hand in hand with management” and the company has doubled revenue since Levant’s initial investment, Levant chief executive Salameh Sweis told PEI.
The firm sold its stake to George Soros-backed hedge fund Soros Fund Management and Albright Capital Management, the private investment fund associated with former US secretary of state Madeleine Albright. Albright Capital is one of Levant’s co-investors, Sweis said.
The stake sale comprises part of a $250 million investment Soros Fund Management and Albright Capital will make in the company, according to a statement.
Sweis declined to give specific transaction details. “For the region, it’s one of the bigger exits seen,” he said.
He added that Levant was bullish on MENA’s private equity prospects. “During the crisis, the number of private equity investors and AUMs sort of dwindled. Now there are fewer managers chasing after more deals. Independent management-owned businesses are under severe pressure to compete … and need capital and knowhow to scale.”
MENA's private equity opportunities and challenges will be discussed in greater detail at next month's PEI Middle East Forum 2011 in Dubai.