New African PE fund gets backing from Carlyle founders, Dangote

AFRICAN STOCKS AND FINANCEOctober 4, 2023 at 12:19 PM UTC

A team that originated from the Carlyle Group Inc. has secured backing from both the founders of the U.S. private equity firm, David Rubenstein and Bill Conway, as well as Nigerian billionaire Aliko Dangote for the establishment of a new fund with a focus on Africa.

This new fund, known as Alterra Capital Partners, aims to raise up to $500 million in the upcoming months and has already achieved an initial closing with $140 million in commitments. The involvement of prominent investors, including the co-founders of Carlyle Group and Aliko Dangote, underscores the potential and interest in investment opportunities within the African market that Alterra Capital Partners seeks to explore and capitalize on.

In November 2022, Alterra struck its second exit from the Carlyle Sub-Saharan Africa Fund (CSSAF) after divesting its majority stake in Amrod, a supplier of branded promotional products in South Africa, to Oppenheimer Partners. Its first exit out of J&J Group in a $300 million logistics deal.

Key Takeaways

Along with venture capital, private equity investments have grown significantly in Africa over the past decade. Per AVCA, $7.6 billion in private investments (both VC and PE) was poured into Africa last year across 626 deals, a remarkable 46% year-over-year increase in deal volume, impressive figures considering 2022 presented numerous challenges for private capital fund managers globally. Although private equity fundraising on the continent still faces several challenges including high-risk perception, foreign exchange risk, and economic uncertainty, Africa generally is seeing an increasing number of successful exits in the PE and VC market, providing liquidity for investors and demonstrating the potential for successful investments in the continent. Private capital exit activity in Africa soared to unprecedented levels in 2022, reaching 82 full exits—the highest number of exits ever recorded in a single year on the continent.