Temasek, IFC in $255m Africa co-investment

Singapore’s sovereign wealth fund has teamed with IFC to invest in oil and gas company Seven Energy.

Temasek has continued its foray into Africa by investing $150 million in Nigeria, Africa-based oil and gas company Seven Energy, according to a statement.

The $172 billion SWF joins development finance institution International Finance Corporation, which is investing $75 million in the deal, with a further $30 million coming from its IFC African, Latin American and Caribbean Fund.

The total equity injection from the firms will be $255 million, with the investors joining private equity firm Actis as Seven Energy shareholders.

Emerging markets-focused Actis acquired a stake in the business in 2008 and has since worked with management to identify bolt-on acquisitions and improve its environmental, social and governance standards, according to the firm.

Seven deals in oil and gas development, production and distribution, primarily focusing on Nigeria’s domestic gas market.

The transaction marks Temasek’s second major investment disclosed in Africa, relatively unchartered territory for the institution.

In 2011, Temasek injected $150 million of capital into a joint venture with E. Oppenheimer & Son International called Tana Africa Capital, which provides capital and support to local businesses, according to the firm.

“We're very interested in Africa, a new market for us. We see opportunities consistent with the themes that drive our investment approach,” Temasek spokesman Stephen Forshaw explained.

Temasek has been expanding its footprint abroad, in March opening its first European office in London to support investments in Europe, the Middle East and Africa, Private Equity International reported earlier.

Temasek also has a presence in Singapore, Brazil, China, India, Mexico and Vietnam, and has plans to open a New York office later this year.

The fund also recently launched Astrea II, a co-investment vehicle with holdings in 36 private equity funds. Temasek is the largest investor in Astrea II, with a 38 percent stake,  and is joined by six co-investors, including Ardian, formerly AXA Private Equity, which provided an independent valuation of Astrea II’s portfolio and is acting as general partner and manager of the vehicle.

Astrea II follows predecessor vehicle Astrea I, which Temasek launched in 2006. The firm’s efforts to build co-investment platforms such as Astrea are intended to make portfolios of assets available to outside investors, including retail investors “in the long term”, according to an earlier statement.