New $300m private equity fund formed

SA’s E Oppenheimer & Son and Sennett Investments (Mauritius) , an indirect wholly owned subsidiary of Singapore state investor Temasek Holdings , have formed a 50-50 $300m joint-venture private equity fund, Tana Africa Capital, it announced on Friday.

"This brings together the vast experience and extensive networks of both Oppenheimer and Temasek as well as their on-the-ground African knowledge and operating experience," the parties said.

Tana Africa would provide capital and business-building support to African businesses mainly in two primary sectors — consumer and agriculture. "This sector focus will enhance the positive impact of Tana Africa on its business partners. The company will, however, also consider opportunities in media, health and education," the parties said.

"The initial capital commitment is $300m, so $150m from each partner," James Teeger, group MD at E Oppenheimer & Son, said.

"We felt that was an appropriate amount to help the team make five to six investments over the next few years," he said.

Mr Teeger declined to say when Tana Africa hoped to close its first investment but said that is has a strong deal pipeline.

In the consumer sector, Tana Africa would focus on those companies well positioned to meet the consumption needs of Africa’s young, energetic and growing population. Tana Africa would also support development of the agricultural sector, investing in the value chain from agricultural inputs to downstream opportunities in processing, storage and logistics.

Nagi Hamiyeh, Temasek’s MD for investment, said the group was pleased to be a partner in the joint venture to explore investment opportunities in the African consumer and agriculture sectors.

"With a growing population of more than a billion, the African domestic economies are growing with the emergence of a middle class with an increasing disposable income. We believe the consumer and agriculture-related businesses will strongly benefit from this trend."

Tana Africa would limit the number of companies it invests in, so as to focus on fewer, larger investments that can serve as platforms for regional expansion

By businessday.co.za