Kingdom Holding Company (KHC), the firm chaired by Saudi billionaire Prince Alwaleed, has formed a joint venture with asset manager PineBridge Investments Middle East to invest in African companies.
The joint venture will invest in direct private equity opportunities in African firms, in response to a rising investor demand for exposure to the continent’s fast growing economies, a statement said.
The platform will focus on investing in sectors such as manufacturing, infrastructure, financial services and consumer driven industries.
“The investment in this platform is a continuation of KHC’s successful investment strategy in Africa that began in 2003, and reflects our confidence in achieving long-term returns for investors in this venture,” said Prince Alwaleed.
Talal Al Zain, chief executive officer of PineBridge Investments Middle East added: “We have strong conviction that the African continent is going through positive socio-economic transformations. PineBridge Investments has a long track record of direct investing in Africa since the 1990s, with extensive experience in sectors including infrastructure, banking and consumer industries.
PineBridge Investments has offices in South Africa, Kenya and Uganda, investing in equities, credit and private markets, Al Zain said.
KHC has also been investing in Africa through a private equity investment firm, which it formed in 2003 with Zephyr Management. In 2011, KHC acquired Zephyr’s interest in the firm and is currently the sole shareholder.
Private equity investments in Africa are on rise as investors eye economic growth driven by a fast-growing middle class in the continent.
According to a recent Ernst and Young report, private equity funding worth almost $3.3 billion was raised for African ventures in 2013, up 136 per cent compared to 2012. The figure was also the highest annual amount since 2007.
The report noted that the continent is attracting the interest of large global private equity investors, who are “looking at the market to capitalise on investment opportunities available on the continent”.
Such heavyweights are looking to invest in sectors such as telecoms, banking and natural resources, EY said.
“Sectors benefiting directly and indirectly from the growth of the African consumer should continue to attract much of the investment targeted at the region,” the report said.