Leading emerging markets investor Actis (www.act.is) tells African Capital Markets News that Africa will have a large role in US$750m Actis Infrastructure 2 fund, which closed on 6 October. The pan-emerging markets fund focuses on power generation and transport. “We are assessing investment opportunities across the continent and we will be looking to invest a significant proportion of our fund in Africa”, says Actis in an email to this blog.
Paul Fletcher, Senior Partner at Actis says: “The need to build infrastructure in emerging markets is one of the great investment themes of our time – power, roads, ports, airports and bridges – these are the means through which these countries will continue to grow and prosper.”
Actis, which took over many operations of the former CDC (Commonwealth Development Corporation), has invested in Africa for more than 60 years. Their African presence includes 40 people based in offices in Lagos, Johannesburg, Nairobi and Cairo, with many investment professionals in London. The fund says having people in country is the best way to build strong relationships to support business and investee companies. Local knowledge and relationships are invaluable for sourcing investment opportunities, developing local partnerships, and managing political and regulatory risk.
Partners Michael Till and Torbjorn Caesar lead the 14-strong infrastructure team, which has a combined 140 years of infrastructure experience and even longer in emerging markets. Their expertise includes infrastructure investing, operations, project finance and project development, having completed investments in over 20 countries in the fund’s target regions.
Actis already has infrastructure investments in Kenya, Tanzania, Uganda and Cote d’Ivoire. Approved and screened deals in the pipeline combine development and expansion across Africa and also India, Latin America and China.
The Actis Infrastructure 1 fund, established in 2003, included investments in 34 power investments across Africa, Latin America and emerging Asia. These were exited in 2007 through strategic asset sales to third parties. The fund generated a cash multiple of 2.0x and realised $1.7 bln and an IRR of 23.3%. Before 2002 Actis also had considerable transport experience.
The fund manager’s investment strategy also includes private equity and real estate. Actis closed its $2.9 bln private equity pan-emerging markets fund, Actis Emerging Markets 3, in November 2008.