Rothschild would raise dedicated funds for Africa alongside U.S.-based Carlyle Group and Dubai’s Abraaj, Financial Times said.
The fund which will be managed by Amethis Finance – a company which operates from Nairobi and Abidjan. It will target small and medium sized companies on the continent. Edmond de Rothschild holds major shares in Amethis Finance.
Rothschild joins the growing list of foreign investors venturing into Africa’s burgeoning middle class and its booming economy.According to the Economist Intelligence Unit projections for economic growth in 2014, five of the top 12 growing economies in the world will come from Africa. These countries listed are: Sierra Leone, Libya, Eritrea, Zambia and South Sudan.
However, Africa remains cautious of these investments as some Economists warned of profit-driven investors who may want to take advantage of the continent’s growth, without projecting inclusive development causes.
“The reality is that foreign investors come to Africa to make money and not to be part of the solution to Africa’s economic problems. It’s, therefore, upon African governments to innovate and come up with mechanisms that will drive the continent’s economic growth,” Patrick Chinamasa, the Zimbabwean finance minister had said at the 49th African Development Bank (AfDB) Annual Meetings in Kigali in May.
Private equity investment however continues to grow in Africa. Early this year, Carlyle secured nearly $700 million for its first sub-Saharan African fund. Also, New York based global private equity company KKR invested $200 million of its $6.2 billion European for a stake in Afriflora, a leading Ethiopian flower company this month.
In 2013, Africa drew in a total of $2.4 billion in Private equity funds, almost three times of Helios Partners’ $908 million investment to Africa three years ago – the largest single private equity fund on the continent.
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