|The formal appointment of Phatisa as Fund Manager in July 2009 launched the African Agriculture Fund (AAF) into the market. A coordinated response from a pool of European and African development finance institutions, this private equity fund is powerful and sizeable enough to make a positive impact on African agriculture and food production, through a truly pan-African investment approach in response to the continent’s food security.
The Fund reached first close at US$ 151 million in November 2010, operations commenced in January 2011 and, within six months, the Senior Managing Partner, Duncan Owen, set the investment pace by concluding the AAF’s first investment in Sierra Leone, West Africa.
The Phatisa fundraising team, led by Senior Partner, Stuart Bradley, pulled out all the stops to conclude final close in mid 2013 at US$ 246 million, backed by an impressive pool of multinational limited partners.
SOME OF THE FUND'S SPECIAL FEATURES
To enhance its impact on development, the Fund has deployed two influential instruments: the AAF SME Fund (an AAF subsidiary fund, focused on small to medium sized enterprises to boost development returns) and a Technical Assistance Facility (TAF) of €uro 10 million to finance studies and capacity-building for small firms and larger outgrower/smallholder schemes across portfolio companies.
The AAF’s priority investments are in food production and distribution, in cereals, livestock farming, dairy, fruit and vegetables, beverages, FMCG food, crop protection, logistics, fertilisers, seeds, edible oils, smallholders, and agri services in Africa, with a particular focus on sub-Saharan Africa. One quarter of the Fund will be invested in primary agriculture.
To combat the chronic undercapitalisation in the African agri business and food sectors, the Fund, equipped with an innovative returns structure, also attracted private sector capital, bringing valuable commercial experience and input to the Fund’s investment and management process and the companies it invests in.
The impetus behind this unique African investment vehicle is to support private sector companies that implement strategies to enhance and diversify food production and distribution in Africa, by providing equity funding - strengthening their management, enabling modernisation, transferring skills and enabling more transparent corporate governance.