VENTURES AFRICA – Leading South Africa based finance firm Ethos Private Equity has gathered $800 million for an investment fund catering specifically to African opportunities.
The private investment firm had originally set raising $750 million as a target, however, interest in the African market from foreign investors was such that the target was easily surpassed, with a total of $800 million collected.
According to the company, investors are initially attracted to the stability of the South African market as a debut opportunity in sub-Saharan Africa, where investment options are increasingly expanding.
“South Africa has obvious advantages in the context of infrastructure and corporate governance. Investors see those as a huge plus in terms of tackling sub-Saharan Africa,” said Andre Roux, Chief Executive Officer of Ethos, reports Reuters.
Roux also revealed that the location of foreign investors hoping to enter Africa is changing, the main source of funds which was previously the US now being balanced out by Asian and European investors.
“Previously a large portion of our international fund money came from North America…It’s now much more evenly spread. Asia is now an important contributor to our funds where previously we had no contributions from Asia,” he disclosed.
The Ethos fund has already seized on two South African investment opportunities, one in a company operating in the construction industry, and the other based in the corporate branding sector.
According to the CEO, the fund targets companies valued between $100 million and $450 million, and will now start hunting for opportunities outside Ethos’ home market of South Africa.
In particular, Roux noted, Ethos may target opportunities in East Africa, which has recently benefited from a string of oil finds; while the continent’s leading oil producing nations based in West Africa, such as Nigeria and Ghana, also hold significant interest.