British International Investment
4 February 2014

CDC announces new US$18.4m commitment to Atlantic Coast Regional Fund

Participation in new rights issue takes total commitment to US$33.4m

CDC has announced a $18.4m commitment to a new rights issue in the Atlantic Coast Regional Fund (‘ACRF’), taking its overall commitment to the fund to $33.4m. The rights issue will provide the fund with an additional $50m of capital, enabling it to make a number of new investments in the coming years, having originally closed at US$72m in 2008.

Based in Dakar, Senegal, ACRF is an African mid-market generalist fund that invests primarily in west and central Africa; a region which includes less developed markets such as Côte d’Ivoire, The Gambia, Senegal, Cameroon and the Democratic Republic of Congo (DRC). It is managed by the Advanced Finance and Investment Group (AFIG), one of the few managers (outside of the mining sector) with the ability and appetite to invest in many of these frontier markets.

ACRF’s target countries include those in the UEMOA (West African Economic and Monetary Union) which share French as a common language (except for Guinea-Bissau), and those in the CEMAC (Economic and Monetary Community of Central Africa). These countries have many characteristics of a single market with one currency (the West Africa CFA Franc which is pegged to the Euro), a common central bank (BCEAO), a single stock market (BVRM), and the same financial sector regulators.

Target geographies

While many of the fund’s target geographies are experiencing encouraging economic growth, all are afflicted by poverty and a difficult business environment. For example:

  • Côte d’Ivoire has a growth forecast of 6.5% to 2015, but has GNI per capita of US$1,079 and is ranked 177 out of 185 on the IFC’s Doing Business Index.
  • Senegal has a growth forecast of 4.9% to 2015, but has GNI per capita of US$1,028 and is ranked 166 out of 185 on the IFC’s Doing Business Index.
  • Cameroon has a growth forecast of 4.7% to 2015, but has GNI per capita of US$1,190 and is ranked 161 out of 185 on the IFC’s Doing Business Index.

ACRF targets strong minority positions in SMEs and mid-sized companies that are well positioned for local or regional growth. It avoids early-stage deals or later stage buyouts and has a target deal size of around USD 10m, generally investing through a mixture of equity and structured debt. The manager is well-differentiated from other players in the market by virtue of their strong networks and the experience of their senior team members.

Current investments

Since its first close in 2008, ACRF has made investments in Chad, Rwanda, Liberia, Ghana, Senegal, Mauritania and The Gambia.  These include:

  • Ecobank – an investment into three Ecobank subsidiaries in Liberia, Rwanda, and Chad.
  • RMG Concept – a distributor of inputs for agricultural crops, operating in Ghana and Côte d’Ivoire.
  • Deep Drilling Company – a contractor providing mining drilling services in Mauritania.
  • Elton International – a downstream oil distribution company, primarily operating petrol retailer businesses.
  • SenBus – an automotive assembly operation building buses sold for the Senegalese market.


Following the new rights issue, ACRF will remain sector agnostic, but particular attention will be paid to four sectors:

  • Agribusiness: food imports dominate the regional market, indicating that local manufacturers are unable to meet current demand.  ACRF will focus on businesses that process and distribute local or imported agricultural products.
  • Financial services: the manager will focus on existing institutions looking to expand into regional markets or consolidate within an existing market.
  • Light manufacturing: there is strong potential for local manufacturers to compete on the basis of quasi-import substitution across a range of sectors.
  • Logistics: existing transportation and distribution systems are insufficient to satisfy the current needs of the continent’s growing economies and must be significantly expanded to support regional growth.

Commenting on the transaction, CDC Investment Manager Jonny Gill said:

“The rights issue secured strong support from existing investors and will enable the fund to make further significant investments in the coming years. ACRF transacts in challenging countries where entrepreneurs are often less familiar with the concept of private equity and where PE funds are in short supply. The fund thus plays a critical role in increasing access to equity financing and in contributing to the development of the private equity asset class across the target region.”

Papa Madiaw Ndiaye, CEO of AFIG Funds, added:

“We are delighted by this strong backing from CDC and our other investors. This innovative funding demonstrates their continued commitment to African PE and to our investment strategy across the 29 countries we cover. The additional capital will allow us to step up our roll-out into Africa’s frontier countries as well as its larger economies. In this manner, we can contribute to reducing the economic marginalization of many frontier markets.”

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