PE firms Catalyst, Metier in partnership

03 Feb 2022

Private equity firm Catalyst Principal Partners has entered into a partnership with South Africa’s Metier Private Equity International in a deal that will see the latter manage two of the former’s funds worth Sh31.6 billion.

The two firms did not disclose finer details of the strategic partnership but said that it will not involve buying out any party for cash.

The deal, which will help Metier establish a permanent presence in Nairobi, is subject to approval from investors and regulators including the Comesa Competition Commission, Fair Competition Commission in Tanzania and the Financial Services Commission in Mauritius.

“The transaction involves Metier’s appointment as manager of Catalyst Fund I and Catalyst Fund II, East African focused private equity funds established by Catalyst with $123 million (Sh13.97 billion) and $155 million (Sh17.6 billion) in funds under management respectively,” the firms said in a statement.

“Catalyst will continue to provide investment and portfolio management capability to Metier.”

Metier, which is headquartered in South Africa and Mauritius, was established four decades ago and has invested in 100 deals with $1.2 billion (Sh136.3 billion) worth of capital put to work.

Its funds focus on mid-market growth capital and renewable energy and clean infrastructure, with Catalyst expected to support the growth capital arm.

Catalyst, which was established in 2009, mainly invests in mid-market companies in the consumer, services and industrial sector. It normally invests between $5 million (Sh567 million) and $22 million (Sh2.5 billion) in firms, taking up minority stakes.

The fund has made investments in companies such as Mammoth Foam Africa, Britania Foods Ltd, Orbit Chemical Industries, Kensta Group and Prime Bank.

Kenya has in the past decade attracted investments from private equity and venture capital funds, attracted by the relatively high returns in sectors such as ICT, financial services, healthcare and education.

These funds have found willing takers among startups and SMEs in the country, which otherwise struggle to access formal credit from banks due to a high-risk perception.

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