(Bloomberg) -- Private equity firm Adenia Partners Ltd. has raised its largest Africa-focused fund to date of $470 million, adding new investors including Norfund AS, the US International Development Finance Corp., and Canada’s Findev Inc.

Africa’s biggest fund manager, the Public Investment Corp. Ltd. that oversees about 2.6 trillion rand ($138 billion) in South African government-employee pension assets, also backed the Adenia fund, along with Ghanaian and Kenyan pension funds. It is Adenia’s fifth fund, for which the firm has increased the equity check size for targets to an average of about $40 million, said Adenia Managing Director Alexis Caude.

“In time, we have moved to the larger economies on the continent, where we see businesses that fit the criteria that we want for our transactions,” Caude said in an interview. “We only make investments in businesses where we can take a controlling stake - of between 51% to 100% - so that we can be in the driver’s seat.”

Private equity firms are having a harder time raising money worldwide, as fund managers grapple with high borrowing costs and economic uncertainty. While that has also affected fundraising in Africa, firms with a specific focus and a track record of delivering returns are still managing to attract backers, Caude said. 

Adenia, which has been operating on the continent for the past 20 years, faces competition from the likes of Alterra Capital Partners Ltd., spun out of Carlyle Group inc., and Helios Investment Partners LLP.

Africa-focused private equity managers need to provide investors with returns and exit options, Caude said. Adenia seeks net returns of at least 15% in hard currency, and takes a controlling stake in businesses to be able to dictate exit timing, said Caude. 

“The environment is not easy in Africa with interest rates that are really high,” he said. “To make returns is difficult, with the currencies depreciating. Exits are complicated in Africa, which is why we believe in taking a controlling stake in businesses - this makes it easier to attract strategic investors.”

The fund will be sector-agnostic, focusing on investments in fintech, telecommunications and health care among others, said Caude. It’s currently engaged in a carve-out deal with Air Liquide SA that involves 12 African operations. 

The firm has also deployed money in South Africa, and has recently opened an office in Lagos, Nigeria. “We have expanded our presence to Nigeria - while it’s a challenging place, its a large economy,” Caude said.

The Mauritius-headquartered company, founded in 2002, operates in seven African countries, with 21 investment professionals, said Caude. On average, most of its older investors, including the European Investment Bank and the World Bank’s International Finance Corp., have doubled their commitments, he said.

©2024 Bloomberg L.P.