African private equity manager Adenia Partners has passed the $400 million target for its fifth fund, which is expected to close in March, according to partner Nnennia Ejebe.
Adenia Partners was founded in 2002 to take controlling stakes in small and medium-sized enterprises across Africa. It has raised $800 million across its funds, per its website. Fund IV closed at $230 million in 2017.
Fund V launched in 2022 and has now gathered $422 million in commitments, Ejebe said. Around half of the fund’s capital has been raised from development finance institutions, with the rest coming from a mix of Africa-focused funds of funds, African pension funds and other institutions.
Ejebe attributed the successful fundraise to the track record the firm has developed. “Our first two funds were fully exited and liquidated on time in line with documentation. I don’t think there are that many Africa-focus GPs that have that,” she told New Private Markets. “We were generating just above 2x gross cash on cash. Fund III is also tracking around that as well, although I would say the IRR on Fund III has suffered because of covid, because we had some exits that were due around that time and were delayed by one or two years. Fund IV is tracking even better.”
Ejebe explained that the firm’s presence on the ground in the region – it has team members in Mauritius, Kenya, Nigeria, South Africa and Ivory Coast – has been crucial to its success in scaling companies. She said: “We like to invest where we have offices because we interact a lot with our portfolio company besides meeting formally once a month. We’re often on the phone or in meetings with our company management at least once per week.”
For Fund V, Adenia has set itself the target of ensuring all portfolio companies are aligned with the 2x Challenge, a gender-based finance initiative founded by the DFIs of the G7 nations, by the time the firm exits. To meet the criteria, 30 percent of a company’s leadership positions must be held by women, who must also make up between 30 and 50 percent of the total workforce.
Last year saw emerging markets receive increased attention from private markets investors, especially when it comes to climate. However, Ejebe is sceptical that this signals a long-term shift in the focus of the market. She said: “I don’t think so. I always joke that it’s like fashion. Some years we’re in vogue and everyone is coming and doing their research and trying to find ways to deploy, and then sometimes we’re out of fashion.”