West African private equity fund manager African Capital Alliance (ACA) announced the first closing after raising US$200 million for Capital Alliance Private Equity III (“CAPE III”) fund. The fund targets opportunities in sectors such as financial services, oil and gas, power (electricity) supply, communications, manufacturing and services in Nigeria and the West African sub-region. The aim is to raise a total of $350 million.
Investors in CAPE III include international development finance institutions such as CDC Group, the European Investment Bank, the International Finance Corporation, and Netherlands Development Finance Corporation. Nigeria-based institutional investors including First Trustees Nigeria Plc, AIICO Insurance Plc, Africa Re-insurance Corporation and some high net-worth individuals have also made commitments. CDC Group, an emerging-markets fund of funds backed by the UK Government, announced that it had committed $50m to CAPE III.
CAPE III will seek to acquire significant interests in companies with high growth potential and up to 40% of the fund may be invested in companies in the energy sector. Economic reforms and liberalization in Nigeria and other West African markets, a scarcity of capital, and relative availability of attractive assets have created unique private equity investment opportunities.
CAPE III is the latest private equity fund sponsored by ACA since its launch in 1997. ACA currently manages over $500 million of aggregate capital including a $170 million real estate fund launched in 2008. Having concluded the first close of CAPE III in May 2009, ACA is targeting a CAPE III final close with aggregate commitments of $350 million. ACA mobilizes long-term capital from institutional investors to promote private sector led investments.