Duet Group plans $100 mln private equity push in Ghana

JOHANNESBURG Tue Dec 18, 2012 10:04am EST

JOHANNESBURG Dec 18 (Reuters) - Asset manager Duet Group plans to make about $100 million of private equity investments in Ghana next year, taking a big bet on the fast-growing west African country.

London-based Duet's Africa private equity arm is in talks about buying into around four Ghanaian companies, said Ayo Salami, chief investment officer of the Duet Africa Opportunities Fund which invests in companies listed on sub-Saharan African stock exchanges.

Private equity investors are increasingly targeting Africa, one of the world's fastest-growing regions, whose expanding middle class represents around a third of the continent's population.

Ghana's oil-driven economic boom and its reputation as one of Africa's most stable democracies, reinforced by a relatively smooth presidential election earlier this month, have made it a target for foreign investors.

Economic growth of 14.5 percent last year made it one of the world's best performers. The International Monetary Fund expects growth of 8.2 percent this year and forecasts 7.8 percent for 2013.

For Duet, which has more than $2.7 billion under management, the private equity investments will be its first in Ghana and are a big bet on what is still a relatively small market.

"We're making a very big push on the private equity side... Our plan over the next one year is for Duet to invest close to $100 million in businesses in Ghana, focused primarily on consumer sectors," he said.

"We're looking at food processing companies, companies in the retail space and in the property sector."

Ghana's illiquid capital markets make it difficult to invest in publicly quoted companies. Just 34 companies are listed on the Ghana Stock Exchange, with no new listings this year.

Even among sub-Saharan Africa's relatively illiquid stock markets, Ghana's is particularly inactive. The average weekly value of shares traded is $1.3 million, compared with $80 million in Nigeria.

While private equity firms have traditionally focused on South Africa, their interest in the continent's frontier markets is growing.

In January, Duet and other investors acquired a controlling interest in Dashen Brewery, Ethiopia's largest independent brewer, for $90 million, the east African country's largest private equity investment so far.

U.S. firm Carlyle Group completed its first African deal in November, paying $210 million for a stake in Tanzania-based agribusiness Export Trading Group along with two other investors.

(Editing by Erica Billingham)