Alterra Capital Partners has raised $140 million in the first close of a $500 million fund. The fund, which is expected to invest in Africa's telecommunications, technology, logistics, healthcare, consumer, and retail sectors, has Aliko Dangote, David Rubenstein, and Bill Conway as some of its investors.
Other investors in the fund include Norfund AS, Standard Bank Group Ltd., International Finance Corp., Germany’s Deutsche Investitions- und Entwicklungsgesellschaft GmbH, and Allianz SE’s AfricaGrow fund.
Alterra Capital Partners was formed in 2020 by former Carlyle Group employees, Genevieve Sangudi, Eric Kump, Idris Mohammed, and Bruce Steen. Carlyle Group had previously raised a $700 million Africa-focused fund in 2014, but ended its involvement in Africa in 2020.
While it pulled out of the continent, Alterra Capital Partners began acting as sub-advisors for Carlyle’s Africa fund. Some investments in that fund included a $147 million investment in Diamond Bank and J&J Transport.
“This is an excellent time to put money to work in Africa, as many of the current macro themes provide attractive potential investment opportunities. For example, the power challenges across Africa provide opportunities to invest in private distributed power solutions, while technology continues to drive Africa’s digital transformation at a rapid pace,” Sangudi said.
Per Sangudi, the firm has returned $600 million to its investors, exited six companies, and invested about $1 billion in 23 companies. Large private equity firms have either reduced their Africa investments or exited the continent, but Carlyle is adapting its strategy to deal with the unique business environment. The firm will invest 50% of its funds in companies that primarily generate their revenue in dollars, as it aims to hedge against currency depreciation on the continent.
