Ascent Capital, a Kenyan private equity firm, is looking to raise $120-150 million in its second round of funding for investment in Rwandan and Tanzanian firms, it said on Friday.
Private equity is still a relatively new financial vehicle on Africa’s landscape but Ascent and others operating in the region are helping to grow its appeal to institutions looking for exposure to fast-growing economies on the continent.
Ascent raised $80 million in its first round four years ago, which it invested in a range of companies in Ethiopia, Uganda and Kenya.
Most of the investments are focused on healthcare and manufacturing, majority of them being in the $2 million-$7 million range, Lucas Kranck, one of Ascent’s founding partners told Reuters.
The second fund will target bigger deals with an upper limit of $15 million, he said, adding the fund raising will be concluded by the third quarter of next year.
“We don’t do start-ups, we do existing, fast-growing (enterprises),” he said.
Ascent will target 10 to 12 investments after it closes its second fund, including in education and financial services.
“We want to invest in private schools that target the middle class,” Kranck said.
Investors in Ascent’s first fund included Britain’s CDC and Kenyan pension funds, he said, adding they will target a similar range of investors during the second fund-raising.
Talks with the European Investment Bank, the European Union’s not-for-profit long-term investment arm, over the possible investment of $25 million in the second fund were going well, Kranck said.
Out of its first fund, Ascent has thus far invested $42 million on three deals in Ethiopia, three deals in Uganda and two in Kenya.
“We expect to do three deals in Kenya before the end of quarter two in 2019,” Kranck said, investing another $20 million in the next two months.
Last month, Catalyst Principal Partners, another Kenyan private equity firm, raised $155 million for its second fund, securing capital from local pension funds and international investors.