10-04-2013 04:53 PM

Kenyan private equity firm Fanisi eyes second fund in 2014

NAIROBI | Fri Oct 4, 2013 12:53pm EDT

Oct 4 (Reuters) - Kenya-based private equity houseFanisi Capital will launch a second fund of at least $100million before the end of next year to invest in new marketsacross sub-Saharan Africa, its managing partner said on Friday.
Fanisi's new fund will seek to invest in markets outside ofeast Africa, where the first fund is focused, Managing PartnerAyisi Makatiani said.
"We may look at DRC (the Democratic Republic of Congo),Ethiopia, Sudan, South Sudan and all the way down to Zimbabweand Zambia," he said.
Fanisi's first fund of $50 million, a close-ended ten yearfund, was launched in 2010 and it has been invested in ahigh-end private school in the Kenyan capital, a Kenyan chain ofretail pharmacy stores, a wholesale pharmacy business and amaize milling firm in Rwanda.
The size of the new fund: "will be driven mostly by the factthat the companies in which we have invested in are continuingto grow," Makatiani said.
Annual growth is expected to exceed 5 percent in Kenya,Uganda, Tanzania and Rwanda this year, the countries in whichthe first fund is invested, he added.
"Property values in east Africa are getting bigger. Theskills set of the team has also improved and so we will be verymuch naturally fitting into a growth cycle," he said.
Returns from investments in Kenyan property over the decadeended 2011 far outperformed those from other assets like stocks,an independent study showed in 2011. The World Bank publisheddata that year showing annual demand for housing at 250,000units against a supply of 50,000.
There are 42 foreign and local private equity and venturecapital firms investing in east Africa, up from less than 10 adecade ago, Makatiani said.
Among them are Actic, Aureos, Catalyst and Helios.
Fanisi's first fund was backed by the International FinanceCorporation, Norfund, Proparco, Finfund, Soros economicdevelopment fund and Ludin of Canada.
Fanisi has been investing $2-3 million in firms inagri-business, healthcare, energy, education and retail. It'stargeting to invest in a mobile-phone based money transferbusiness in Uganda, a logistics business in Kenya and an animalfeeds producer in Tanzania, Makatiani said. (Reporting by Duncan Miriri; Editing by James Macharia andElaine Hardcastle)

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