Rothschild raises US$530 million for its first Africa-focused fund

Rothschild Building Sanfranman59 wikimediaRothschild, Abraaj and Carlyle are seeking investors to focus on small and medium-sized companies. (Image source: Sanfranman59/Wikimedia Commons)Swiss private banking group Edmund de Rothschild will invest US$530mn in Africa to develop the continent's economy and raise the living standards of the middle class population

According to reports, the funds will be managed by Amethis, an Africa-centric financing firm.

The company, which is majority owned by Rothschild, has already invested in five African companies including Kenyan Chase Bank and gas distributor Petro Ivoire.

Rothschild, along with Dubai-based private equity investor Abraaj and Washington-based asset management firm Carlyle, will be seeking investors to focus on minority stakes in small to medium-sized companies, stated Reuters.

After five years, investors will have the option to convert their stakes in the fund into shares of a company that could then float to gain permanent capital, allowing them to retain investments over a long period, rather than having to sell them after five to six years, according to reports.

Based on information gathered by data provider Preqin, private equity funds targeting Africa attracted US$2.4bn in 2013 – nearly double the amount from 2012. In early 2014, Carlyle secured nearly US$700mn for its first sub-Saharan African fund – lesser than Helios Partners’ US$908mn pool – considered the largest thus far.

Johnny El Hachem, chief executive of Compagnie Benjamin de Rothschild Conseil, said, “We are looking for high-return projects but with a strong social development aspect. Time counts in Africa. You can get much better returns if you stay longer.”

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