OPIC invests $65m in South Africa

Medu Capital received $65m in financing for its third fund, which will invest in small and mid-market companies based in South Africa.

The Overseas Private Investment Corporation’s board of directors approved $65 million in financing for Medu Capital’s $300 million third fund Thursday, the US development finance institution announced in a statement. 

The $65 million commitment is somewhat unusual, as it is less than the amount OPIC would typically commit to a fund of that size. OPIC usually invests one-third of a fund’s capital target in debt financing. Fund managers are responsible for finding the remaining two-thirds from other limited partners. 

An OPIC spokesperson could not be reached for comment at press time. 

Medu Capital III will target investments in small and mid-market companies in South Africa and other African countries, according to the statement. 

The firm’s previous fund raised R900 million (€85 million; $107 million) in 2008 with the backing of the UK development finance institution CDC and the FMO, the Netherlands Development Finance Company, according to Private Equity Connect

Medu was founded in 2003 by Nhlanganiso Mkwanazi and Ernest January. The firm’s investment team includes Zeyn Angamia, Siyabonga Nhlumayo, Annabelle Clark and Paul Moeketsi, according to its website. The firm has R1.5 billion; (€141 million; $178 million) under management.  

OPIC is the US government’s development finance institution and has supported $200 billion in investment across 4,000 projects since its launch in 1971, according to a statement. 

Last month, OPIC committed $30 million in financing to Siraj Palestine I, the first private equity fund to target investments in Palestinian companies. The investment was made after President Barack Obama announced that the US government would be investing in technological development in predominantly Muslim countries. 

Siraj Palestine I is targeting $90 million and has already invested in four businesses, according to a statement. The fund is managed by Siraj Fund Management Company, a subsidiary of Ramallah-based holding company Massar International.