The African Development Bank (AfDB) has committed EUR 12.5 million to a private equity fund which supports small and medium-sized enterprises (SMEs) in francophone West Africa.
The investment in Adiwale Fund 1 is a private equity fund run by Abidjan, Ivory Coast-headquartered Adiwale Partners, targeting a fund size of EUR 75 million which it will use to take minority stakes in SMEs with a view to scaling up the businesses. The aim will be investments in the consumer goods and services sector, business services and manufacturing.
Here Is The Deal
- The fund has identified Ivory Coast, Senegal, Burkina Faso and Mali as the main subject of interest, followed by Togo, Benin and Ghana as secondary targets.
- The consumer goods and services investments will include education and healthcare, while business services will include transport, logistics, IT and construction. Pharmaceuticals, agri-processing and chemicals will be incorporated into manufacturing.
AfDB director for industrial and trade development Abdu Mukhtar explained the investment corresponded with the bank’s ‘High 5’ goals.
“The Fund focuses on SMEs in francophone West Africa which accounts for nearly 19% of West Africa’s GDP but attracts only 7% of private equity capital. As these companies grow, they cross the borders and integrate across different countries,” he said in a statement.
The SME sector has been a focus of attention for investors this year, with the London Stock Exchange drawing attention to businesses worthy of support with its Companies to Inspire Africa Report and AfricInvest providing EUR 194 million for SMEs in North Africa.
As governments seek to diversify their economies and investors look for opportunities for growth, the World Bank and International Finance Corporation have been among the bodies promoting SMEs across Africa.
Adiwale Partners Announces Closing of Adiwale Fund I at €50 million
Adiwale Partners has also announced the first closing of its first fund, Adiwale Fund I L.P. at €50 million. The fund has attracted investors from Africa, Europe and North America. Investors include development finance as well as commercial investors.
Adiwale Fund I will provide growth capital to SMEs in Francophone West Africa, Côte d’Ivoire, Senegal, Mali, Burkina Faso as well as Togo, Benin and Guinea. The fund will be acquiring minority positions in 10 to 12 investments, with tickets of €3-8 million per transaction. Key investment themes for the fund are: rising incomes and changing consumer behaviours, expansion of the local supply chain (increased sophistication of local economies), import substitution and company’s backward integration. The fund will as a consequence invest in three key sectors: Consumer-related, including health and education; Business Services (transport & logistics, IT, construction-related services, etc) and Manufacturing (chemicals, pharma, …)
Jean-Marc Savi de Tové, Managing Partner at Adiwale Partners, said:
“We are very pleased with this first closing which attracted leading institutions that have a keen interest in the development of Africa. The closing demonstrates our expertise and knowledge of the region and it shows the confidence that our institutional investors have in our activities. We are hopeful to reach our target size of €75 million within a year”.
He added: “Francophone West Africa attracts less than 7% of private equity investments, where it represents 19% of the GDP of the West Africa region. Locally groomed private equity firms like Adiwale Partners could help close the gap. Today, we have a strong pipeline of attractive projects which our team is already executing on.”
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Vissého Gnassounou, Managing Partner at Adiwale Partners, also added:
“Francophone West Africa’s pool of entrepreneurs is constantly growing and evolving, and has dramatically changed over the past two decades. The region remains the second fastest growing region in the world, and should continue to post strong growth, as our currency remains stable and provides visibility, countries embark on strong reforms, and borders become more fluid for businesses and for people.”
About Adiwale Partners
Adiwale Partners is an independent private equity fund manager established in 2016 by seasoned private equity and capital markets professionals. Its private equity experience spans 20 transactions in Francophone West Africa, as well as over 30 fund investments. It offers growth capital and operational support to mid-size companies looking to strengthen their core activities and expand in West Africa and beyond.
We like entrepreneurs with a genuine ambition for the region and with a good record of execution, the fund noted on its website.
We want to help more companies scale up their operations and contribute to the overall economic activity of the region and to job creation. We are a responsible investor, seeking to build long-term value through sustainable growth in our portfolio companies. We want to build a better environment for our kids
Based in Abidjan, Cote d’Ivoire, the fund operates from the economic centre of the Francophone region.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world