DPI exceeds target, closes oversubscribed pan-African ADP II fund at $725m

DPI, one of the leading Africa private equity specialists with $1.1 billion under management, has successfully closed its second fund, the oversubscribed ADP II fund, at $725 million significantly beating its $500 million target.

The ADP II investor-base includes corporate and public pension funds, endowments and foundations, funds of funds, family offices and development finance institutions from across the US, Europe, Middle East and Africa with significant interest from US investors, which currently make up just over 40% of its limited partner base.

ADP II is pursuing a broadly diversified strategy across industries that benefit from Africa’s growing middle class including the financial services, healthcare, education, construction, logistics, telecoms and consumer goods sectors in line with the existing portfolio of companies operating in 18 African countries across DPI’s two funds.

The successful closing of ADP II comes on the back of a strong deal-making year in 2014 for DPI with three new deals closed in ADP II and two exits in ADP I including the highly successful exit of Nigerian insurance company Mansard to global insurance player AXA.

Some of ADP II’s existing portfolio companies include:

– Université Privée de Marrakech, a leading private university

– RTT, Africa’s largest privately-owned parcel distribution company

– HomeChoice , a home-shopping and credit retail company

DPI’s investment thesis explores opportunities driven by the region’s emerging middle class which is currently estimated at around 350 million1, making Africa a highly attractive growth story for private equity investors.

DPI believes Africa has an attractive risk/return profile because the market is underpenetrated in terms of private equity investment. This, coupled with DPI’s local partners’ network, allows DPI to access high quality companies that fit its investment thesis with limited competition.

Runa Alam, CEO and co-founder of DPI commented: “With a total value of deals of US$8.1bn in 2014 and a record US$4 billion raised by PE investors2, we are in a different place today compared to where we were at the time of our first successful fund closure of ADP I in 2008. With significant allocations from international pension funds, US endowments, foundations, family offices and fund of funds as well as the development finance institutions who continue to be a big support to our Fund and to our industry, Africa now represents an increasing proportion of investors’ PE portfolios. There are an increasing number of investible, high quality companies and industries, and many exits opportunities with highly attractive multiples.”

Idris Mohammed, Partner, DPI added: “For a firm where the entire investment team comes from Africa, we are not only pleased by the support our investors have shown, but also excited that we will continue to put capital to work in this vibrant and ascendant region and to deliver value to both our portfolio companies and our investors.”

DPI is a US$1.1 billion Africa-focused private equity firm that invests in companies benefiting from the fast-growing emerging middle class in Africa.

Founded in 2007, DPI’s investment process combines rigorous analysis with comprehensive due diligence. The firm seeks out compelling investment opportunities and aims to obtain exclusive terms, rational pricing and strong influence. The investment philosophy places great importance on working closely with the funds’ portfolio companies to create value while looking for attractive exit opportunities throughout the funds’ investment period. DPI invests in profitable or cash-flow positive companies which are growing either organically or through acquisitions, or partnering with established corporations expanding into new regions in Africa. The companies’ management must be experienced, and committed to transparency, with a clear corporate strategy designed to create value for shareholders.

DPI’s team has had extensive hands-on private equity and investment experience across Africa since 1990.

DPI currently advises two pan-African private equity funds, African Development Partners I (“ADP I”) and African Development Partners II (“ADP II”).