Saudi Prince Alwaleed’s Kingdom Holding Company (KHC) and the Bahrain-based PineBridge Investments Middle East (PBME), a private equity firm, have signed a memorandum of understanding (MoU) to establish a joint venture for investments in African companies.
According to the two parties, the move was prompted by rising investor demand for exposure to the continent’s fast growing economies, and the venture will proceed with a particular focus manufacturing, infrastructure, finance and on consumer-driven sectors.
Prince Alwaleed, in comments on the decision, said: “Investment in this platform is a continuation of KHC’s successful investment strategy in Africa that began in 2003, and reflects our confidence in achieving long-term returns for investors in this venture.”
The MoU was signed by KHC executive director for private equity and international investments Dr Adel Alsayed and PBME CEO Talal Alzain, who noted that PineBridge has no doubt that the African continent is going through positive socio-economic transformations.
“PineBridge Investments has been directly investing in Africa since the 1990s, with extensive experience in sectors including infrastructure, banking and consumer industries,” he said. “The firm has offices in South Africa, Kenya and Uganda, investing in equities, credit and private markets.”
KHC has also been investing in Africa since 2003 through a private equity fund established alongside Zephyr Management. Prince Alwaleed’s firm subsequently acquired Zephyr’s interest in the firm in 2011 and renaming the fund Kingdom Africa Management (KAM).
Prince Alwaleed also met with the Nigerian VP Mohammed Sambo in April for talks on developing foreign investment into Nigeria, where the Saudi Royal was last involved in investing $50m into First Hydrocarbon Nigeria in 2011, eyeing the oil and gas opportunities.
In January, Alwaleed also detailed his optimism for the economic development of Sierra Leone following a visit to the country in June 2013, and after which the Alwaleed Bin Talal Humanitarian Foundation pledge $1m to President Ernest Bai Koroma’s social initiatives.
In related developments, the Dubai’s Abraaj Group raised $530m in Africa-focused funds alongside Swiss bank Edmond de Rothschild and the US-based Carlyle Group, and further pledged to raise $500m-$750m and spend $200m-$300m in Africa over the next 12 months.
According to a recent Ernst and Young report, Africa attracted a total of $3.3bn in private equity funding in 2013, up 136% from 2012 and the highest annual figure since 2007, with the heavyweights looking to invest in telecoms, banking and natural resources.