Commonwealth Deputy Secretary-General Ransford Smith (left) with Femi Omotayo, Managing Director of Orwell International, a benefitting Aureos investee based in Nigeria
Commonwealth teams up with private equity firm to deliver up to $400 million in investment in Africa
2 November 2009
Small and medium enterprises across Africa are set to benefit from a multimillion dollar investment fund set up by private equity firm Aureos Capital with the Commonwealth Secretariat’s assistance.
The Aureos Africa Fund, launched this week following feasibility and due diligence studies funded by the Secretariat, will provide long-term capital and support for promising and successful businesses across the continent.
Commonwealth Deputy Secretary-General Ransford Smith, speaking at the launch of the fund at the Marriot Hotel in London, UK, on 2 November 2009, hailed the fund’s launch. He warned that investment in Africa was “critical” if recent development gains were not to be lost amid the current worldwide recession.
“This fund has the potential to make a real contribution to Commonwealth countries in Africa, by helping ordinary businesses to reach their potential and boost much needed growth and jobs across the continent,” he said.
Aureos and the Commonwealth:
The Commonwealth’s relationship with Aureos dates back to 2005 as part of the Secretariat’s Commonwealth Private Investment Initiative, which has helped to raise some US$800m for investment in Africa, Asia, the Caribbean and the Pacific.
The Secretariat helped raise funds from the Governments of India and Norway to train 150 managers of Aureos investee companies from Africa and South Asia between 2006 and 2007.
A similar programme was delivered last week to Pacific companies in Papua New Guinea with funding from the Secretariat and the European Union.
“The recent momentum in investment activity in Africa must be maintained in spite of the current global economic climate. Indeed, it is critical to do so, if Africa’s development gains over the last few years are not to be reversed.”
To date, the Aureos Africa Fund has raised US$322.8 million and has made nine investments totalling US$106.2 million in African sectors including financial services, building products, real estate development and agricultural business in 18 countries.
Southey, a South African industrial painting, insulation and contracting services company which currently employs around 2,000 full-time staff, is one of the early beneficiaries of an investment from the Fund. Southey is hoping to move further into markets across Africa, as well as international markets in Asia and the Pacific as a result.
Barry Wickins, chief executive, said: “In 3 to 5 years we want to list the group [on the stock market]. We believe by then the company will be at least double in size – in terms of employees, turnover and profitability.
“[Aureos] are purely investors and their role is to assist in strategic management, facilitation of investment opportunities, and easy access to capital. They leave day to day management up to the management team – and our team has obviously been very successful.
Femi Omotayo, a Nigerian entrepreneur and Managing Director of Orwell, which was formed in 2000 and provides drilling tools and well services for the oil and gas sector, praised the training opportunities and financial management advice afforded to it by the Aureos investment.
“Some of our potential weaknesses in financial planning have been picked up through the review processes of Aureos. That has assisted us considerably,” he said.
Davinder Sikand, Regional Managing Partner of Aureos in Africa, described the continent as the “next frontier” set to benefit from future global growth. “We have great plans for Africa and we are definitely very bullish about the future for African markets and what can be achieved in terms of returns,” he said.
“It is possible to build serious businesses in Africa, but it takes a lot more than just talent, it takes a lot of hard work and belief.”
He added: “The Commonwealth Secretariat has been enormously helpful. The partnership with the Secretariat has been great and we look forward to continuing it – not just in Africa, but in other parts of the world.”
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