Now African Health Fund surpasses $100m target

The private health sector in Africa is set to have a $104 million private equity capital at its disposal, thanks to a specialist fund set up by Aureos Capital.

According to media reports, the African Health Fund, a first generation fund managed by the private equity firm which invests in the emerging markets, is set to surpass its $100 million target.

Reports say that investor appetite has seen the fund — which targets small- and- medium-sized companies in sub-Saharan Africa, with the goal of helping low-income Africans access affordable, high-quality health services — attract a little more capital.

It intends to invest in a wide range of firms, from clinics, hospitals, diagnostic centres, and laboratories; and health management organisations and insurance companies; to eye clinics, pharmaceutical chains and logistics companies; to pharmaceutical and medical-related manufacturing companies, medical education and providers of medical education.

The Africa Health Fund counts the Bill and Melinda Gates Foundation and the African Development Bank, as well as the International Finance Corporation, amongst its original investors.

“We have two institutional investors who we expect to finish closing the legal agreements by the end of this month, to take us to $104 million. That will be the final size,” the chief executive of Aureos Capital, Sev Vettivetpillai, told Bloomberg in a recent interview.

Between them, the two new unnamed investors are injecting $29 million into the fund.

The new development comes after two studies released last year proposed venture capital as a possible source of financing to provide health financing in Africa.

The studies that were published in Biomed Central indicated that it was viable to support development of drugs, vaccines, diagnostics, and medical devices, though it remained under-utilised in the developing world, as opposed to the developed countries.

Already, since it opened in 2009, the Africa Health Fund has made investments in two facilities in East and West Africa. Two others have been approved, while another two are still under consideration.

The fund is one of the 16 that are managed by Aureous Capital, five of which are invested in Africa.

Its African funds include a West African Fund, an East African Fund and a Southern African Fund, all first generation. In addition, there is the Africa Fund that is in its second generation.

Since its inception, the firm has completed over 250 transactions across the emerging markets, according to official statistics.