Carlyle closes Africa fund after raising nearly $700 million

JOHANNESBURG, April 15 Tue Apr 15, 2014 4:08pm EDT

JOHANNESBURG, April 15 (Reuters) - Carlyle Group LP has closed it first sub-Saharan African fund after raising $698 million, the U.S. private equity firm said on Tuesday, exceeding its initial target by 40 percent.

It is the largest first-time private equity fund ever in sub-Saharan Africa, representing strong interest from global investors for the fast-growing region, Carlyle's co-head for the region, Marlon Chigwende, told Reuters.

Apart from the African Development Bank, which has committed $50 million, many of the other investors are new to Africa, Chigwende said. "Geographically, investors are broadly spread around the globe," he said.

Investors are increasingly looking to Africa, given its rising wealth and consumer spending.

Management consultancy McKinsey estimates that African consumer spending will be $1.4 trillion by 2020 - nearly doubling from $860 billion in 2008 - and forecasts a more than doubling of the working age population to 1.1 billion people by 2040.

But that growth is hard to tap for traditional equity investors, given that many African capital markets are still underdeveloped and illiquid.

Carlyle has already invested in Tanzania-based supply chain manager Export Trading Group and Mozambique-based J&J Africa, a shipping firm.

Chigwende said Carlyle could announce a "couple more" deals in Africa in the coming quarters. (Reporting by David Dolan; Editing by Janet Lawrence)