Nairobi — Aureos Capital, a private equity fund management firm, is looking for high returns on funds it seeks to invest in Africa.

It has set a target of achieving between 18 to 20 per cent return from the Sh27.6 billion (US$400 million) that it is raising from local and international investors. The process of fund raising is expected to end by June.

"Capital comes to where it feels it can be used best," said Davinder Sikand, Aureos Capital managing partner for East Africa.

Estimates from the International Monetary Fund (IMF) gave the Sub-Saharan region an economic growth of 6.9 per cent last year, which was above the global average of 5.2 per cent. This has led to more investors, especially the Chinese, eyeing the region for potential investment.

In order to achieve this target, Aureos Capital will be looking at ploughing the money in medium enterprises in fast growing sections such as the financial sector and construction.

Mr Sikand said the move comes after a previous investment fund that began in 2001 with Sh140 million invested in various African regions where their average lending rate has been 10 years. The fund management company will seek companies which it terms as having "good management".

Some of the companies the fund has invested in include Athi River Mining and Bank of Africa. Apart from investing in private equity, Aureos Capital also undertakes private investments in listed companies. East African Cables was one such company where the managing partner of Aureos East African Fund, Mr Sikand, got a seat on the board of directors.

Currently, the firm has eight hubs in different African countries with plans to open up new ones in Morocco and Tunisia. The fund has three investments in Uganda.