PARTICIPATION IN NEW RIGHTS ISSUE TAKES TOTAL COMMITMENT TO US$33.4m
CDC has announced a $18.4m commitment to a new rights issue in the Atlantic Coast Regional Fund (‘ACRF’), taking its overall commitment to the fund to $33.4m. The rights issue will provide the fund with an additional $50m of capital, enabling it to make a number of new investments in the coming years, having originally closed at US$72m in 2008.
Based in Dakar, Senegal, ACRF is an African mid-market generalist fund that invests primarily in west and central Africa; a region which includes less developed markets such as Côte d’Ivoire, The Gambia, Senegal, Cameroon and the Democratic Republic of Congo (DRC). It is managed by the Advanced Finance and Investment Group (AFIG), one of the few managers (outside of the mining sector) with the ability and appetite to invest in many of these frontier markets.
ACRF’s target countries include those in the UEMOA (West African Economic and Monetary Union) which share French as a common language (except for Guinea-Bissau), and those in the CEMAC (Economic and Monetary Community of Central Africa). These countries have many characteristics of a single market with one currency (the West Africa CFA Franc which is pegged to the Euro), a common central bank (BCEAO), a single stock market (BVRM), and the same financial sector regulators.
Commenting on the transaction, CDC Investment Manager Jonny Gill said:
“The rights issue secured strong support from existing investors and will enable the fund to make further significant investments in the coming years. ACRF transacts in challenging countries where entrepreneurs are often less familiar with the concept of private equity and where PE funds are in short supply. The fund thus plays a critical role in increasing access to equity financing and in contributing to the development of the private equity asset class across the target region.”
Papa Madiaw Ndiaye, CEO of AFIG Funds, added:
“We are delighted by this strong backing from CDC and our other investors. This innovative funding demonstrates their continued commitment to African PE and to our investment strategy across the 29 countries we cover. The additional capital will allow us to step up our roll-out into Africa's frontier countries as well as its larger economies. In this manner, we can contribute to reducing the economic marginalisation of many frontier markets.”