The Africa fund managed by Japan’s SBI Holdings Inc. and Abu Dhabi-based Invest AD has made its first investment, buying into the initial public offering (IPO) of Rwanda’s Bank of Kigali, in a move that illustrates growing interest in the continent’s young but fast-developing markets.
The fund, which will deploy $75 million invested by the two partners, is looking to participate in initial public offerings, take stakes in unlisted companies, and negotiate block share purchases in listed companies.
“Because of strong economic growth, Africa has a very interesting IPO pipeline,” said David Sanders, Invest AD’s Chief Investment Officer.
“Although some listings have been delayed because of the global markets environment, the companies are strong, growing rapidly, and hungry for capital, so we expect some attractive opportunities in coming years.”
Bank of Kigali, which has operated for 45 years and is the largest commercial bank in Rwanda, raised $62.5 million in its IPO last month as the bank issued 20% new shares and the Rwandan government sold a 25 percent stake.
The bank became the second company to list on the Rwanda Stock Exchange since the market began operations in January. Rwandan shares were previously exchanged on an over-the-counter market.