At a luncheon held in Kampala, the German development finance institution Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) announced its intention to invest into Catalyst Fund I, the USD100m private equity fund established by Catalyst Principal Partners which will invest in dynamic mid-sized companies across Eastern Africa. The gathering was also attended by several high profile regional investors that have committed capital towards the fund. As the guest of honor for the occasion, Philipp Kreutz, member of the Management Board of DEG, said: “During a cycle of scarcity of international capital, DEG is providing urgently required financings for private investment in Africa. The East African market is especially attractive for DEG, which has had a representative office in Nairobi since early 2005.” He further remarked: “The promotion of the private sector in Africa is a major concern of DEG, one of Europe’s biggest development finance institutions. 2009 was the first year in which we did more than one quarter of our new business in Africa, committing a total of EUR256m in Sub-Sahara Africa. This is almost 50% more than in the previous year. Our commitment to the Catalyst Fund I is consistent with DEG’s dual approach of direct investments in businesses as well as our investments in private equity funds. With this approach, we can generate a multiplier effect by leveraging the wealth of investment experience and on the ground presence of fund managers such as Catalyst. We are planning to extend our cooperation with private equity funds and thereby enhance the impact of our investments. The companies financed by regional funds will create employment, generate governmental revenues and boost good corporate governance as well as high environmental and social standards. As a member of the Management Board of DEG, I am especially happy about the fact that our institution is a partner with Catalyst and thus able to make a contribution towards the economic future of Uganda and the East African region.” Paul Kavuma, Chief Executive of Catalyst Principal Partners, stated: “The fund, which will officially launch this quarter, will make strategic equity investments in Eastern Africa of between USD5m and USD15m in emerging companies that have compelling performance and aspirations, with Catalyst having the capability to support our partners in key strategic areas such as strengthening management and governance, driving growth and operational improvements, and financing acquisitions or regionalization.” He reiterated that “the participation of DEG in Catalyst Fund I is a significant milestone in our advanced fund raising activities, and is testament to the credibility of our capability and the robustness of our investment strategy. DEG’s future commitment as an anchor investor, together with commitments received from other leading developmental and international institutional investors, has also facilitated the participation of reputable regional institutional and high net worth investors in the fund. It is a significant achievement that Catalyst has been successful in mobilizing substantial capital from within East Africa, which will deepen regional exposure to private equity as an attractive alternative asset class, particularly for the pension fund and insurance industries.” According to Biniam Yohannes, Managing Director of Catalyst Principal Partners: “We are optimistic that the strong underlying fundamentals and dynamism of the regional economy along with the ambitious aspirations of the business community will generate compelling growth capital investment opportunities, which is an area of our specific focus”. He further noted: “We have built a world-class investment team with a depth of expertise in private equity, financial advisory, strategy and operations, which will deliver substantial added-value to our investee companies and represents our differentiated capability in this region”.
Jan
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