Quantum seeks $2bn for Africa

The investment manager aims to secure the funds from Middle Eastern investors by 2019, chief executive Jean Claude Bastos de Morais tells PEI.

Quantum Global, the Zug-headquartered investment manager with $3 billion of African private equity funds under management, is looking to raise up to $2 billion for the continent, Private Equity International has learned.

The firm, which manages seven private equity funds across sectors including healthcare, mezzanine and infrastructure, is in early discussions with Middle Eastern investors and will look to secure the funds by 2019, chief executive Jean Claude Bastos de Morais told PEI.

The funds will be directly invested in Sub-Saharan private equity assets – rather than fund investments – de Morais added. Quantum has deployed around $1.6 billion of its existing funds, which were sourced from African pensions, national banks and sovereign wealth funds.

“We’ve analysed the readiness and the willingness of investors to go on long-term investments in Africa and astonishingly we found that the US and the Middle East, in our metrics, have the highest scores,” de Morais said. “And I think it’s easier for us to go [to Dubai] where we already are logistically.”

Quantum currently manages $1.1 billion of infrastructure funds, $500 million of hospitality funds and $400 million for the healthcare sector. It also oversees $250 million-worth funds for the timber, agriculture and mining sectors, as well as $250 million for mezzanine finance.

The firm, which was launched as a Swiss wealth manager in 2007, charges the traditional two-and-20 for infrastructure and 2.5-and-20 percent on the remaining six funds.

“We see the best and most interesting opportunities in infrastructure,” de Morais said. “That’s going to [have] the biggest pick-ups and that’s where we see our dealflow and our committed money at [its] highest. Then the [healthcare sector] is going to rock.”

African private equity funds raised $2 billion in the first half of 2017, according to data from the African Private Equity and Venture Capital Association. This is compared with just $2.3 billion across 2016.

South Africa-based Ethos Private Equity is looking to hold a final close on just over 2 billion rand ($151 million; €126 million) for its debut mid-market fund in the second half of this year, PEI reported in September. Ethos Mid Market Fund I has attracted the majority of its commitments from returning South African government pensions and institutional investors, its chief executive Stuart MacKenzie said.