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Sunday, 4 October 2020

PE giant Actis is pivoting towards longer-term investments, could see group break off to form new private equity firm

PRIVATE EQUITY WATCH- PE giant Actis is pivoting towards longer-term investments in assets such as real estate, energy, and infrastructure as it moves away from the traditional PE model, Torbjorn Caesar, a senior partner at the London-based firm said, according to Bloomberg. Actis is currently looking to raise USD 4 bn for a new fund to target the renewable energy sector, people familiar with the matter said.

The firm is planning to close an investment in Egypt’s renewables sector by the end of 2020. “Hard assets” give emerging markets-focused Actis, which has AUM of close to USD 10 bn, a chance to scale and ensure a steady flow of yields, said Caesar. The shift comes at a time when other high-profile firms are moving away from PE in emerging markets. It’s also becoming increasingly difficult to attract investors to Middle Eastern transactions after the collapse of Abraaj.

Look for a new PE player to spin out of Actis: “Several Actis private equity [players] have been considering splitting off to start their own firm,” Bloomberg reports, noting that “they have held discussions about taking over management of some legacy investments from Actis.” The news comes as Actis’ chief investment officer is “set to depart in the coming months after spearheading a major expansion over the past five years.”

Actis has a long track record in Egypt, where it is a major investor in London-listed labs business IDH and where it has previously invested in companies ranging from CIB to Edita.

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