JOHANNESBURG (Reuters) - Africa-focused private equity firm Kingdom Zephyr plans to invest about $300 million over the next three years by taking minority stakes in six or seven companies across the continent, its managing partner said.
Kingdom Zephyr Africa Management, whose biggest investor is Saudi billionaire Prince Alwaleed Bin Talal, is in the process of investing more than $400 million of committed capital from a 2008 fund.
The firm has already spend 30 percent of that amount on three deals and is looking to spend the rest over the next three years, managing partner Kofi Bucknor told the Reuters Africa Investment Summit in Johannesburg.
“Our focus will continue to be around the investment opportunities coming from the consumption patterns of the growing middle class in Africa as they relate to industries such as banking, insurance, housing, telecommunications and cement,” Bucknor said on Wednesday.
Consumer spending in the world poorest continent is expected to roughly double by 2020 as high commodity prices and economic expansion lift disposable incomes and give rise to a nascent middle class.
Bucknor also said the fund would focus on Egypt, South Africa, Kenya, Nigeria, Angola, Algeria and Morocco for companies to invest in.
“I think the obvious places to look are the large markets where we can find companies of critical size more easily,” he said. “We seek significant minority positions.”
Kingdom Zephyr already owns stakes in South African building materials group Buildworks BWKJ.J and Ivory Coast canned tuna maker Thunnus Overseas Group.
The fund also sees opportunities in infrastructure sectors such as housing and electricity, and is keeping an eye out for opportunities in the natural resources sector.
“A number of African countries have a strong competitive advantage there,” Bucknor said.
Over time, Bucknor said he expected to attract more capital from pension funds, colleges, universities and endowments.
“The other investor base that is looking increasingly interested in Africa private equity is Africa-based funds. Nigeria is talking about a sovereign wealth fund,” he said.
Editing by Jon Loades-Carter