News & Analysis

Carlyle mulled Africa fund stapled deal – exclusive

The private equity giant approached secondaries buyers about acquiring LP stakes in its 2013-vintage Sub-Saharan Africa Fund and making a stapled commitment to its successor.

-

The Carlyle Group, one of the world’s biggest private equity firms, has become the latest blue-chip manager to explore a secondaries process.

The Washington, DC-headquartered firm approached buyers about acquiring stakes from limited partners in the 2013-vintage, $698 million Carlyle Sub-Saharan Africa Fund and making a stapled commitment to its successor, according to two sources familiar with the matter.

The fund has more than $500 million in remaining net asset value across 12 assets, according to one of the sources.

Lazard is understood to have been advising on the proposed deal, and the current status of the process is unclear.

Assets in the fund include Nigerian lender Diamond Bank, East African pharmaceuticals manufacturer Abacus and GCR, Africa’s largest credit rating agency, according to Caryle’s website.

One buyer who looked at the proposed deal told Secondaries Investor he was deterred by “structural inefficiencies” in the fund.

Sister publication Buyouts reported last week that Carlyle was in market seeking an undisclosed amount for its second sub-Saharan Africa fund.

CSSAF held its final close in 2014, above its $500 million target, according to PEI data. The African Development Bank was a keystone investor, committing $50 million. The vehicle focuses on investment opportunities linked to the growth of sub-Saharan Africa’s emerging middle class in sectors such as telecoms, consumer goods and financial services.

It is understood the fund was between 70-80 percent invested as of late April.

CSSAF’s former co-head Marlon Chigwende left in 2016 to form Arkana Partners, according to his LinkedIn profile. Co-head Eric Kump has been in sole charge since then, Secondaries Investor understands.

In 2017 Carlyle hired managing director Idris Mohammed from Development Partners International to help widen the Africa team’s strategy to include North Africa, sister publication Private Equity International reported at the time.

According to research by advisor Greenhill, secondaries stakes from funds outside North America, Europe and Asia accounted for five percent of deal volume last year.

Carlyle and Lazard declined to comment.