The International Finance Corporation (IFC) announced that it will invest $50 million in private equity firm Helios Investors, which is raising funds for new investments across Africa.
Helios, which is seeking to raise a total of $1.25 billion by September, seeks to deploy the capital in medium to large companies in which it will take minority to controlling stakes. The firm has teams in London, Lagos, as well as Nairobi and will invest between $30 million and $200 million per transaction.
Private Equity (PE) firms typically raise funds for investments which they hold for five to seven years, after which they sell their stakes and return the capital to their investors
According to IFC, “the proposed project is for an equity investment of $50 million, not to exceed 20 percent of total committed capital. The target size of the fund is $1.25 billion in commitments”. The organisation also said the project is expected to increase competition in Africa’s PE market by “demonstrating the viability of investments in a region suffering from a lack of investor confidence”.
The new capital, which is Helio’s fourth fund, could see Helios expand its investments in Kenya where its portfolio companies include Africa Oil, Acorn Group and Telkom Kenya.
Helios has invested $3.6 billion in African businesses over the past 13 years. IFC has consistently backed Helios, having participated in the PE firm’s earlier capital calls.
A statement released by IFC said “IFC’s continued commitment to the fund manager in Helios IV through $50 million of patient capital will assist the large-cap growth fund in achieving its first close by September 2019 and ultimately its target size of $1.25 billion”.
In addition to the capital received, Helios will also benefit from IFC’s knowledge, portfolio and networks in Africa.