A new private equity player, Catalyst Fund, is set for a big boost following the approval by the African Development Bank board of an investment of $15 million in the firm.
“The board of directors of the AfDB has approved a $15-million equity investment in the Fund, a 10-year multi-sector private equity based in Kenya primarily covering the East Africa Community as well as DR Congo, Ethiopia and Zambia.
The target market has a population of 280 million, with a $126 billion combined GDP,” the pan-African bank said in a statement.
The fund is owned by Catalyst Principal Partners, which is targeting to raise $100 million for exclusive investment in the region.
The fund will invest in medium-sized companies that have a business track record and growth prospects.
The local companies will be grown into larger regional corporations supplying products and services across East Africa and beyond.
The Catalyst Fund primarily invests in consumer goods such as food and personal care; services such as the financial sector, technology and telecoms and industries such as packaging and agribusiness.
“The key sectors targeted by the fund are experiencing rapid growth as a result of the region’s sustained economic expansion that has led to increased personal income and changes in life style,” said the AfDB.
The fund will add value to companies by providing them with operational and strategic support.
Investments are expected to increase employment, tax and economic growth.
The fund also aims to facilitate regional integration through the expansion of the operations of investing companies into neighbouring countries.
“It will promote private sector growth by facilitating access to financing for Africa’s medium-scale enterprises. It is a regional fund that primarily aims to capture the growth potential in East Africa as a result of the moves toward closer regulation, trade and economic ties,” the AfDB said.
The fund’s supervisory panel is chaired by Vincent Rague, who has about 25 years experience in private equity and also sits on the firm’s investment committee.
The other members of the panel, whose role is providing strategic advice and facilitating contacts, are former East African Breweries Ltd group managing director Gerald Mahinda, international entrepreneur Robert Devereux, and Paul McDonald, an operations, marketing and strategic planning expert.