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Equity firm Ascent Capital enters Ugandan market

Friday November 21 2014

Ascent Capital Africa Limited, one of East Africa’s newest private equity funds, has set foot in Uganda with an eye on fast moving consumer goods enterprises and service businesses after successfully raising $50 million at the end of July.

Through the Ascent Rift Valley Fund (ARVF), the private equity player has also established offices in Nairobi and Addis Ababa in a mission to provide hands-on expertise to investee businesses pursuing long term growth ambitions under the Fund’s 10 year lifespan.

Other areas of interest include financial services, medical services, distribution operations, oil and gas plus Information and Communications Technology (ICT) sectors.

While high population growth of 3.2 per cent per year and proximity to large neighbouring markets like South Sudan and the Democratic Republic of Congo (DRC) has created big opportunities for fast moving consumer goods like soft drinks in Uganda, more sophisticated industrial operations base in Kenya have equally attracted investors keen on efficiency and stable returns on investment.

A large population of nearly 90 million people also offers big growth opportunities in Ethiopia’s health sector. However, Ascent Capital has shied away from investments in the agricultural sector, citing longer investment horizons and complex underlying risks.

ALSO READ: Region’s growing GDP attracts global private equity funds

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“We are committed to giving local investee firms hands on managerial support to enable them grow faster. Though private equity valuations in Kenya are fairly high because of huge access to capital among investors, this market also offers good exit opportunities through the local stock market. We intend to conclude two deals in Uganda over the next 12 months,” said Lucas Kranck, a partner at Ascent Capital Africa Limited.

The Fund offers a 20 per cent return on investment per year while transaction sizes range between $2 million and $10 million.

Prominent investors that contributed monies to the ARVF include Norfund of Norway that availed $10 million and OeEB, the Development Bank of Austria that contributed $5 million.

Others include the Kenya Power Company Pension Fund that contributed $4 million and a group of small Kenyan investors who raised $1 million for the Fund’s cash basket.

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