DPI gets another limited partner for third African PE fund

 DPI gets another limited partner for third African PE fund

Development Partners International (DPI), one of the top Africa-focused private equity firms, has added another Limited Partner (LP) to its third fund.

Danish development finance institution IFU has committed $15 million to African Development Partners III (ADP III). The sector-agnostic investment fund focuses on companies creating access to essential goods and services, for example within health services, food and agribusiness, and financial inclusion.

ADP III is aiming to invest $40-120 million in eight to 14 companies in Africa. So far, the fund has made three investments in three sectors: microfinance and fintech, food processing, and pharmaceuticals.

“Impact investments in Africa are a high priority for IFU, and with our investment in ADP III we participate alongside several other DFIs in easing the negative effects of the [Covid-19] pandemic across the African continent,” said IFU’s chief investment officer Lars Krogsgaard.

This comes soon after Finnfund, a Finnish development financier and impact investor, committed $26 million to ADP III.

IFU and Finnfund joins a number of existing LPs. Earlier this year, the PE firm had roped in the pension fund of the city of Philadelphia as an LP. The pension fund committed $50 million to ADP III. Other backers include the UK’s CDC Group Plc, which has committed $80 million.

Dutch development bank FMO and Sweden’s Swedfund have contributed $25 million each to the fund. Madagascar-based conglomerate Axian Group and FinDev Canada have chipped in with $20 million each.

London-headquartered DPI is one of the largest PE fund managers focusing on Africa. Founded in 2007, DPI manages three funds—the ADP I, ADP II and the 2019 vintage ADP III—with total assets of $1.7 billion.

The firm had raised €271 million (about US$400 million at the time) for the first fund. It then mobilized $725 million for the 2013 vintage ADP II fund.

Overall, DPI has invested in 24 companies with operations spread across 29 countries. Its portfolio companies span 17 industries such as telecommunications, banking, insurance, consumer goods, education and pharmaceuticals.

DPI was set up by founders Miles Morland and Runa Alam. Last November, it expanded its top deck by adding three professionals as partners—Babacar Ka, Takudzwa Mutasa and Marc Stoneham.

This came in a busy year for DPI when it struck a new deal and formed an investment platform with one of its LPs despite the coronavirus pandemic.

DPI teamed up with CDC and the European Bank for Reconstruction and Development to create a $750 million biopharmaceutical platform to broaden access of specialty generic drugs in Africa. FMO may also join as an equity partner in this platform.

The platform’s initial $250 million capital has been used to fund the acquisition and combination of Adwia Pharmaceuticals and Celon Laboratories Pvt. Ltd. Adwia is an Egyptian generic drugs manufacturer while Celon is an Indian oncology and critical care specialist.

Vivek Sinha

The Capital Quest