Aureos Capital Africa SME fund reaches $380m final close

The fund had originally expected to close in the third quarter of 2009, but a tough fundraising environment resulted in the deadline being pushed closer to the end of the year. A final close of $400m had been targeted.

Sev Vettivetpillai, CEO of Aureos Advisers, said, “Considering the weak fundraising environment for private equity over the last two years we are delighted with the strong interest shown by investors. Many institutional investors are becoming aware that they have little or no exposure to what is becoming an increasingly robust and vibrant part of the global economy.”

The fund will target initial investments of up to $10m, with a focus on businesses with potential to expand across the continent within two to three years via “buy and build” strategies or through organic growth.

The fund has already invested $120m in ten companies, including a Nigerian leasing company, a West African real estate manager, a Senegalese cement company and a provider of building management and security software in Southern Africa.

Although many African countries were hard-hit by the global economic downturn and a fall in commodity prices, the continent as a whole held up surprisingly well in 2009, with IMF figures showing average per capita GDP growth of 1.7 per cent for the year, compared to an average fall of 3.4 per cent for advanced economies.

Davinder Sikand, regional managing partner of Aureos Africa, said, “Our strong performance in Africa has been based on adding value to our investments by offering day-to-day and strategic help to the businesses we invest in. We have a very strong local presence and that is an essential ingredient in today’s world of emerging market private equity.
 
"Small and medium-sized business are becoming increasingly important players in domestic and regional markets across Africa - they are a key driver of the continent’s economic growth,” he added.

Aureos Capital makes mid-cap private equity investments across Asia, Africa and Latin America. The firm recently made a $2.6m investment into Kenyan healthcare company Nairobi Women’s hospital through its Africa Health Fund.

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