31 July 2014

Uganda: New Firm to Invest Sh132 Billion in Local Firms

A new private equity firm has raised $50m (Shs 132bn) to invest in local enterprises in the East African region.

Ascent Rift Valley Fund (ARVF), owned by India's Ascent Capital, hopes and invest in between eight to 12 companies across the region.

"The investment size will be between $1 million and $9 million," said Ascent in a press statement.

The fund mobilised capital from local pension funds, rich individuals and banks. Equity firms invest in companies for a given period of time and sell their shares after making a profit. Some private equity firms purchase other companies entirely.

Institutions from Kenya have so far contributed $5 million to the ARVF, which is about 10 per cent of total commitments. Other investors including local institutions and private international investors have contributed 70 per cent of the funds. Ascent Capital Advisory Services' partner David Owino lauded Kenya pension funds regulatory body, Retirements Benefits Authority (RBA), for making it possible for pension funds to invest in the firm.

Owino said: "Ascent leverages its offices in Kenya, Uganda and Ethiopia, managed by local staff, and the strong operational background of its team to support investee companies."

ARVF joins other private equity firms such as Actis, which is headquartered in London. In Uganda, Actis has had investments in Dfcu bank and power distributor Umeme. In April, Actis bought Compuscan, the largest independent credit bureau in Africa, which operated in South Africa, Uganda, Ethiopia, Namibia, and Botswana.


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