AfricInvest Group raised €50 million ($58 million) in the first close of its third French-African Fund, which backs French small- and mid-cap businesses with operations in Africa. The strategy was developed nearly a decade ago to capitalize on AfricInvest’s investment experience and networks built over three decades across Africa.
Previous investors in the French-Africa strategy, including Bpifrance, Proparco, BNP Paribas, the pan-African insurer Sanlam, the Central Bank of Kenya’s pension fund and Mauritian insurer Sicom re-upped in the new fund, known as FFA 3. Coming on board were Africa-focused investment firm Equitane, alongside other Kenyan pension funds, and European and African family offices.
FFA 3, classified as an Article 8 SFDR Fund, will invest between €5 and €10 million ($5.8 million to $11.7 million) in about a dozen companies, alongside other private equity funds or with founders. Its portfolio comprises companies involved in health, vocational education, water management, industrial manufacturing, digital solutions and other sectors. It follows the €50 million FFA2, closed in 2023.
Successful exits
The FFA strategy was developed in conjunction with Bpifrance and is managed by AfricInvest Europe, which now has €150 million ($175 million) in assets under management. Previous fund iterations have backed 18 companies since 2017, and notched five exits to other private equity funds. In July, AfricInvest sold its stake in precision manufacturing company Mathevon. “They were all pretty successful exits,” AfricInvest’s Stéphane Colin told ImpactAlpha. “We’ve made extremely decent returns on those exits.”
The exits paved the way for a smoother fundraising process for FFA 3, which is seeking €100 million to €120 million ($117 million to $140 million). It was more of a struggle to get investors such as risk-averse pension funds and family offices on board for the first fund, with its unique cross-border thesis, eight years ago.
“We’ve explained that we strongly believe that their allocation should start somewhere, and that they should not sit out of the private equity industry, while recognizing that the African private equity markets are difficult,” added Colin. “The worst that they could do was waiting or not choosing very profitable projects. And they’ve listened and trusted us.”
Colin said that acquisitions by other firms and industrial partners, follow-on funds and IPOs are strong exit options. “Investors are not worried [about exits], but they’ve asked a lot of questions about liquidity, especially the African investors.” The regulated, mature and liquid French market, he said, has helped address any liquidity concerns.
