News & Analysis

Phatisa targets $300m for second agri fund

OPIC has committed up to $75 million to the fund manager’s second agricultural fund, which like its predecessor will target the food and FMCG value chain in sub-Saharan Africa.

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Makuyuni, Arusha, Tanzania - February 13, 2008: African, Tanzanian farmer tractor driver, sitting behind the wheel of a agrimotor without a cab, with bodywork trailer.

Having deployed roughly 80 percent of the African Agriculture Fund (AAF), Phatisa is seeking to raise $300 million for its successor vehicle, the African private equity fund manager confirmed to Agri Investor.

According to a spokesperson for Phatisa, the Overseas Private Investment Corporation (OPIC), the US government’s development finance institution, has approved a commitment of up to $75 million to AAF II. While the spokesperson confirmed that other investors have also made commitments, she declined to name them or the amount raised to date.

The $300 million target is slightly higher than the $246 million raised for Phatisa’s maiden fund, which closed in mid-2013. Like its predecessor, AAF II will focus on the fast-moving consumer goods, food services and production, protein production and inputs sectors in sub-Saharan Africa, targeting investments that range between $5 million and $24 million, the spokesperson told Agri Investor.

According to Phatisa’s website, the fund manager has invested in nine companies through AAF, the most recent being an add-on investment in Kanu Equipment, one of the largest dealers for Liebherr and Bell Equipment in West and Central Africa.

Phatisa had first invested in Torre Equipment Africa, as Kanu Equipment was formerly known, in June 2016, acquiring a 40 percent stake for $15.7 million before acquired an additional 48.8 percent in November.

Other assets in the AAF portfolio include Goldtree, a large-scale, commercial palm oil plantation and milling company in Sierra Leone; Meridian Group, a fertilizer manufacturer and distributor active in Malawi, Mozambique, Mauritius, Zambia and Zimbabwe; and Feronia, a palm oil production and milling company in the Democratic Republic of Congo.

Investors in the first fund included The African Development Bank and Development Bank of Southern Africa, the government agencies of Spain, the US and France, a fund of funds, a large South African commercial bank and private investors from the US and Europe.