BULLISH IN BOTSWANA(2)

Venture Partners Botswana's (VPB) decision to launch a new €150 million ($210 million) fund to invest across Southern Africa represents a large step for the private equity firm based in Gaborone, the capital of Botswana. VPB's prior fund, a notably more modest €26 million vehicle that is now fully invested, was focused solely on its domestic market.

Anthony Siwawa, managing partner of VPB says: “People say it is difficult to find assets in Botswana but we have been able to disperse the [prior] fund in a short period of time in good assets.” The new fund is aiming for a first close in June 2008 on €60 million and is looking to source 60 percent of the capital from investors in Botswana.

The fund will invest across Southern Africa in countries such as South Africa and Zambia as well as Botswana. Industries in the region will consolidate over time, which will lead to cross-border tariffs being lowered and uniform legislation across the region, according to Siwawa. Opportunities in the region are assisted, says Siwawa, by the Southern Africa Development Community, which was established in 1979 to harmonise economic development among the countries of Southern Africa.

The firm recently achieved its first exit from its previous fund, a transport and logistics company which delivered a 14 percent IRR over two and a half years. Siwawa said the fund overall should have a much higher return with the aim being an internal rate of return of up to 25 percent.

Siwawa says the competitive environment in which VPB operates is helped by legislative restrictions on the ability of rivals in South Africa to deploy capital outside the country. It means, he says, that his fund and others based outside South Africa can deploy capital much faster across the Southern African region.

That said, opportunities outside South Africa are, as yet, relatively limited. According to data provider Dealogic, the dominant South African market accounted for 85 percent of African deal flow up to the end of August this year.

TRAVANT RAISING $300M FUND
Nigerian buyout firm Travant Capital Partners is raising a $300 million (€218 million) Central and West Africa fund. The fund is headed by local businessmen Andrew Alli and Osaze Osifo. Alli was formerly country manager of the investment arm of the International Finance Corporation in Nigeria and Southern Africa, while Osifo was an investment banker at HSBC who set up Ocean and Oil Holding, an investment company for the oil and gas industry. The fund is aiming for a first close this month on $150 million with the intention of raising the entire sum within six months. It is targeting domestic investors.

AUREOS SETS SIGHTS ON $400M
Emerging markets buyout firm Aureos is planning to launch a pan-African fund at the start of next year with the aim of raising between $350 million and $400 million (€256 million and €292 million). Aureos, which currently has a $50 million South Africa fund, a $40 million East Africa fund, and a $50 million West Africa fund, is combining its fundraising efforts into one pan-regional fund. Aureos partner Brigit van Dijk said: “We will use our teams on the ground to follow through to the next level. We will focus on our target market of fast-growth companies in the small to mid-cap market.” Aureos joins an increasing number of firms conducting pan-African fundraisings. Emerging Capital Partners closed the largest of these funds to date on $523 million in May. In related news, Aureos' West Africa fund has invested $4 million for a significant minority stake in telecoms company Private Networks Nigeria. The company sells and distributes telecoms products as well as providing other telecomsrelated services such as engineering and maintenance.

GOLDMAN JOINS GOLD REEF CONSORTIUM
Goldman Sachs has joined the Ethos Private Equity-led consortium making a fully funded R11.4 billion ($1.5 billion; €1.1 billion) bid for Gold Reef Resorts, a South African casino operator. The offer is worth R34 a share. The bid comes three weeks after the consortium said it was preparing a bid at the height of the confidence crisis in global financial markets. Ethos is bidding alongside Goldman Sachs in tandem with a group of Black Economic Empowerment shareholders. Black Economic Empowerment is a programme launched in post-apartheid South Africa to allow previously disadvantaged groups to participate in economic opportunities. The group currently owns 4.9 per cent of Gold Reef, but would own 30 percent of the new company.

SOUTH AFRICAN PENSION BACKS INFRASTRUCTURE FUND
The South African Government Employees' Pension Fund has committed $250 million (€184 million) to the Pan African Infrastructure Development Fund's $625 million first closing. The fund, which was launched two months ago, is targeting a $1.2 billion close in the next year as it looks to court investors in the US, Europe and the Far East having raised capital exclusively from African investors for its first close. The fund was unveiled at the African heads of state conference in Ghana and received the endorsement of various African leaders, including South African leader Thabo Mbeki.

AFRICAN DEALS RECORD

Announced Target Deal Value Financial Sponsor Industry
$(bn)
8-Feb-07 Edgars Consolidated 3.5 Bain Capital Partners Retail
Stores Ltd – EDCON
4-Jun-07 Egyptian Fertilizers Co 1.4 Abraaj Capital Chemicals
2-Oct-06 Alexander Forbes Ltd 1.0 Actis Capital, Ethos Private Equity, Finance
Teachers Private Capital
13-Aug-07 Gold Reef Casino Resorts Ltd 1.0 Ethos Private Equity Leisure & Recreation
17-Jan-06 Waco International Ltd 0.9 AMB Private Equity Partners, Construction
CCMP Capital, Ethos Private Equity, /Bldg Prods