Aliko Dangote, US billionaires’ partner on $500 million Africa fund

Aliko Dangote, Africa’s wealthiest individual and the Chairman of the Dangote Group, has teamed up with billionaire investors from the United States to back a new $500 million fund focused on Africa.

According to a report by Bloomberg, a team that originated from Carlyle Group Inc. announced on Wednesday that they had received support from the founders of the prominent U.S. private equity firm, as well as Aliko Dangote, to establish the Alterra Capital Fund, which is dedicated to African investments.

The co-founders of Carlyle, namely David Rubenstein and Bill Conway, are notable participants in this fresh endeavor, as disclosed by partner Genevieve Sangudi in her conversation with Bloomberg.

Consequently, the private equity firm has set an ambitious goal of raising $500 million in the coming months, although they have already managed to secure $140 million during their initial fundraising efforts.

In a landscape where major investors are hesitating to enter the African market, smaller firms are seizing opportunities. These opportunities are emerging as startups proliferate to address the gaps in a continent that grapples with inadequate financial and logistical infrastructure.

What you should know

Notably, Alterra intends to allocate its investments across various sectors, including telecommunications, technology, logistics, healthcare, and consumer retail, according to Sangudi.

• “This is an excellent time to put money to work in Africa as many of the current macro themes provide attractive potential investment opportunities.
• “For example, the power challenges across Africa provide opportunities to invest in private distributed power solutions, while technology continues to drive Africa’s digital transformation at a rapid pace.”

Additionally, other key contributors to Alterra’s fund include prominent institutions such as Standard Bank Group Ltd., the International Finance Corp., Norfund AS, Deutsche IInvestitions– und Entwicklungsgesellschaft GmbH from Germany, and Allianz SE’s AfricaGrow fund, as confirmed by Sangudi.

Backstory

Going back in time, amid the peak of the COVID-19 pandemic in 2020, Carlyle, headquartered in Washington, made the strategic decision to transfer its $700 million fund, specifically earmarked for sub-Saharan Africa, to a local investment team.

With a diversified portfolio, Alterra has successfully divested six companies, delivering returns of approximately $600 million to its investors, as stated by Sangudi. Their portfolio encompasses a total fund of $1 billion invested across 23 companies spanning the African continent.

---

Download Nairametrics App for breaking news and market intelligence.