Financial services, manufacturing, ICT firms and mid-sized companies trading in retail and consumer goods within the East African region will benefit from $100m private equity fund established by Capital Principle Partners. The German development finance institution, DEG announced its intention to invest into Catalyst Fund at a gathering was also attended by several high profile regional investors that have committed capital towards the Fund at in Kampala last week.
Mr Philipp Kreutz, Member of the Management Board of DEG said that the East African market is especially attractive for DEG and that’s why they invested in the Catalyst Fund 1 that was established by Catalyst Principle Partners to invest in dynamic mid-sized companies within the EA region. “The promotion of the private sector in Africa is a major concern of DEG, one of Europe’s biggest development finance institutions. Last year was the first in which we did more than one-quarter of our new business in Africa,” he noted “The Fund, which will officially launch this quarter will make strategic equity investments in Eastern Africa of between USD5million and USD15million in emerging companies that have compelling performance and aspirations,” Paul Kavuma, Chief Executive of Catalyst Principal Partners, stated.
Catalyst will be supporting partners in strengthening management and governance, driving growth and operational improvements, and financing acquisitions or regionalization. “It is a significant achievement that Catalyst has been successful in mobilizing substantial capital from within East Africa, which will deepen regional exposure to private equity as an attractive alternative asset class, particularly for the pension fund and insurance industries,” Kavuma adds. The capital to invest in a private equity is raised from institutional investors who put the money in a fund known a private equity fund.
The private equity fund manages the fund to provide capital to the private companies after investment criteria agreed upon has been followed. The private equity fund is raised and managed by investment professionals of a specific private equity firm. “We are optimistic that the strong underlying fundamentals and dynamism of the regional economy along with the ambitious aspirations of the business community will generate compelling growth capital investment opportunities, which is an area of our specific focus,” says Biniam Yohannes, Managing Director of Catalyst Principal Partners.
Catalyst Principal Partners was established in 2009 as an East African focused investment manager and it brings together investment professionals from the region who have depth of local and international knowledge of private equity investing in Africa and across emerging markets. In private equity, the investor is seen as partner that shares risk and success until it finally exits. It has no regular interest rates and regular payments and also makes the business credible since one of the shareholders will be the private equity company with a good reputation.
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