Private equity fund scouts for investments in East Africa

NAIROBI, Tuesday – Private Equity fund, Catalyst Fund, plans to scale up investments in East Africa, buoyed by strong consumer spending and economic growth in the region. Member investors in the fund had gathered in Nairobi last week to mark the Fund’s first year of operation. Catalyst CEO Paul Kavuma said the Fund will target fast growth sectors such as financial services, manufacturing and consumer goods. “We are progressing several new opportunities in the region and expect to complete another investment in the coming months, with the goal of between 2 to 3 significant investments of between 5 million U.S. dollars and 15 million dollars each across the region each year,” Kavuma told the investors who participated in Catalyst Fund. Kavuma further said the Catalyst has recently received additional commitments from the East African Development Bank, European Investment Bank, Belgium Investment Office and Finnfund, and spoke of plans to increase the fund size to 125 million dollars. He foresees increased interest from international and regional institutional investors in what has become the largest private equity fund exclusively focused on investing in the East African region. In line with its strategy of investment in dynamic emerging players servicing regional consumer demand, Catalyst recently invested in ChemiCotex, a leading Tanzanian fast moving consumer goods business that has strong brands in oral, skin and hair care, including its flagship “Whitedent” toothpaste that has attained Superbrand status. Catalyst said it remained confident in the continued growth and attractiveness of East Africa which has made significant strides in expanding its markets through regional integration. “Despite recent volatility that has dampened business sentiment and eroded consumer purchasing power, Catalyst remains upbeat on the medium to long-term positive fundamentals of the region,” Kavuma said. According to Kavuma, while economic growth is expected to slow by approximately 1 percent as a result of inflation and the recent monetary tightening, East African economies remain robust with GDP growth expected to average 5 percent in the next year and rebounding to 6-7 percent thereafter. “Our policy makers may have over-compensated for the effects of the global financial crisis with prolonged stimulation of our economies which in hindsight were more isolated and robust than anticipated,” he said.