Back to the complete issue
Tuesday, 5 October 2021

Egypt in the spotlight as DPI hits final close on Africa’s largest-ever PE fund

Africa-focused private equity firm Development Partners International (DPI) is on track for a USD 900 mn final close to its third fund. Its African Development Partners III (ADP III) has an additional USD 250 mn worth of dedicated co-investment capital, the firm said in a statement, giving it a total of USD 1.15 bn for investment on the continent. That would, by our math, make it the largest PE fund ever raised for deployment in Africa. DPI’s third fund has already invested in MNT-Halan’s record-breaking USD 120 mn funding round.

DPI’s existing Egypt investments and track record were among the keys to the successful fundraising, which saw DPI exceed its original target by USD 100 mn and add more than 25 new limited partners to its investor base, a senior DPI exec told us. The firm’s LPs include pension and sovereign wealth funds, development finance institutions, ins. companies, asset managers and impact investors, DPI said.

Egypt is critical for DPI. “Egypt was a key investment destination” for the firm’s second fund, Principal Ziad Abaza told us. Egypt had the largest country allocation in the firm’s ADP II as DPI deployed more than USD 180 mn here in three investments that Abaza said “have performed very well for us.” They include consumer electronics retailer B.tech, pipes and fittings manufacturer EGIC (a prominent exporter) and fintech platform MNT-Halan. “Egypt has performed well over the last five years and we expect to see this trend continue,” he said.

“Egypt will remain a key country as we deploy capital from our third fund,” Abaza added, saying two out of the four investments ADP III has already made have been here. The firm’s pharma platform, established in partnership with CDC and EBRD, has acquired Adwia and DPI invested a second time in MNT-Halan. “That takes our total investments in Egypt now to more than USD 350 mn along with our co-investors,” Abaza said.

What does DPI like in Egypt going forward? “We like to see companies that address gaps in the market and benefit from the compelling demographics and emerging Egyptian middle class. To give a few examples, we continue to be very interested in healthcare, education, manufacturing, agriculture, retail and FMCG. We’re also interested in companies that are keeping up with the rapid digitalisation in the post pandemic world and find new ways to connect with consumers,” Abaza explained.

DPI’s fundraising is good news for an African private equity industry that has faced headwinds in recent years. Africa-focused PE firms had a flat first half this year and raised just USD 1.2 bn in 2020, more than 70% less than the USD 3.9 bn raised in 2019, the African Private Equity and Venture Capital Association told the Financial Times. Helios, for example, agreed to a merger with a Fairfax vehicle (pdf) in a transaction that closed last year after Helios fell short of a USD 1.25 bn fundraising target.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.