Last week’s move by Washington-based Emerging Capital Partners, a pan-African private equity, to buy a stake in Nairobi Java House, one of Kenya’s biggest coffee houses, confirmed its seriousness in setting up base in Nairobi as its regional hub.
The firm has already deployed a full time executive to Nairobi, signalling a keen interest in tapping opportunities in the East African region.
Currently, Emerging Capital Partners has six offices on the continent: Abidjan, Tunis, Johannesburg, Lagos, Douala and Casablanca. Additionally it also operates in Paris and Washington DC.
According to Vincent Le Guennou, co-chief executive, the allure of the East African region to private equity investors has been boosted by recent resource finds.
This, he says, together with the strides towards regional integration, now paints a more attractive picture of the region to investors.
“East Africa has held a lot more investor attention in the past year or so. On the one hand, this is partly because of the natural gas that has been found off the coast there,” Mr Le Guennou said.
The firm, which has been investing in Africa in the past 12 years, has also been encouraged by integration efforts by the East African Community, which has made it “more possible” to invest in one of the member states with a view of expanding into another within the bloc.
At the moment, the EAC has a Common Market which allows for the free movement of goods, labour and capital within the five member countries — Kenya, Uganda, Tanzania, Rwanda and Burundi.
“This is of great benefit when bringing growth capital to our portfolio companies,” the ECP co-chief executive noted.
In ECP’s expansion strategy of Nairobi Java House, the region features as well. The company plans on spreading its wings beyond Nairobi to other Kenyan towns and beyond the borders. The firm’s investment in Nairobi Java House is its second from its latest ECP Africa Fund III, which Mr Le Guennou says is currently half invested.
About two and a half years ago, ECP made its maiden investment in East Africa from the fund, committing $25 million to Wananchi Group Holdings, a media and telecommunications company specialising in pay television and Internet services in Kenya and Tanzania.
The investment in Wananchi Group Holdings is one of those that ECP has its sights trained on, especially the infrastructure space. Last October, the firm made an investment in IHS, a telecommunications infrastructure solutions provider operating in Nigeria, Ghana, and South Sudan.