Aureos Africa Health Fund invested $2.5 million in a Kenyan hospital and health insurance company, the Avenue Group (www.avenuehealthcare.com), which offers affordable healthcare cover, integrated with quality healthcare provision. It has a 70-bed full-purpose hospital in Nairobi, 7 clinics through Kenya as well as in-house clinics for corporate clients, a home-based care service for elderly, terminally ill or otherwise dependent patients, rental and sale of wheelchairs and other rehabilitation equipment for home use, and First Aid training schemes.
It combines healthcare cover with quality, affordable outpatient and inpatient medical services. The group’s corporate medical schemes are designed to be accessible to businesses with as few as 10 employees and around 70% of the staff covered are in non-managerial roles. With Aureos investment, Avenue Group will expand into other regions in Kenya, building 2 more clinics in smaller towns and expanding existing in-patient facilities in Kisumu and Mombasa. The funding will ensure the group can continue non-profit activities, such as free medical camps across Kenya and public health screening days at Avenue clinics.
Africa Health Fund is managed by private equity manager Aureos Capital Ltd (www.aureos.com), which specialises in socially sustainable small to medium-sized businesses in emerging markets. It has more than 20 local offices covering more than 50 markets. It has expertise in healthcare, with investments in hospitals and medical supply companies across Asia, Latin America and Africa. It builds environmental, social and governance performance into its investments as an integral part of managing risk and generating returns, particularly in Africa where managing employees’ health is a major challenge for many of Aureos’ portfolio companies.
Africa Health Fund was established by Aureos in June 2009 with the International Finance Corporation (www.ifc.org), the African Development Bank (www.afdb.org), DEG, and the Bill & Melinda Gates Foundation (www.gatesfoundation.org) as cornerstone investors. Subsequent investors include the Elma Foundation (www.elmaphilanthropies.org) along with private investors such as family offices and a major European retail bank. Committed capital in the fund now totals $75.4m. The fund aims to help low-income Africans access affordable, high-quality health services while providing investors with good long-term financial returns. It has invested in hospitals in Kenya and Ghana.
Shakir Merali, Partner at Aureos Africa Healthcare Managers Limited in Kenya, says: “Avenue has developed strong links with the Kenyan business community that are helping to bring health cover to a wider range of workers, even those who work in smaller firms. We are looking forward to helping the Group to pursue its plans for growth and to extend its successful model and high quality care, initially within Kenya, and eventually in neighbouring East African countries.”
Diana Patel, Executive Director at The Avenue Group, comments: “We are very pleased to be working with an investor with such extensive experience of the medical sector. The support from Aureos’ strong local team will be crucial in helping us to achieve our ambitions to make affordable health cover a reality across the whole of East Africa.”
Aureos was set up in 2001and has increased funds under management to US$ 1.3 billion with a footprint in over 50 emerging markets covering Asia, Africa and Latin America, by establishing 17 regional private equity funds.