Carlyle’s Africa Dealmakers to Start Own Firm

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Peter Uzoho with agency report

Four dealmakers responsible for Carlyle Group Inc’s Sub-Saharan Africa Fund – Genevieve Sangudi, Eric Kump, Idris Mohammed and Bruce Steen – are leaving the global investment firm to set up their own business called Alterra Capital.

Reuters quoted Carlyle to have disclosed this yesterday in the latest private equity retreat from the continent.
Carlyle said Sangudi, Kump, Mohammed and Steen were leaving to set up a new venture dubbed Alterra Capital.
Carlyle stated that it would remain active in Africa with its other funds, including Carlyle International Energy Partners.

But, the Washington D.C.-based firm said it would no longer pursue an Africa-dedicated buyout fund to succeed its $700 million Carlyle Sub-Saharan Africa Fund, which it raised in 2014.

This made Carlyle the latest private equity giant to reduce its African exposure and underscored the challenges of deal-making for Western private equity firms used to large leveraged buyouts of mature companies that could be saddled with debt.

Deals in the region tend to be smaller, the companies younger and thirsty for capital, and opportunities to cash out fewer, often fraught with political and economic risks.

Carlyle said it would have no stake in Alterra, but would provide deal referrals, advice and co-investment. Alterra would also assume management of Carlyle’s Sub-Saharan Africa Fund as sub-advisors starting from July 1.

Carlyle’s deals in Africa have included a $147 million bet on Nigeria’s Diamond Bank, which soured after a shrinking economy, a plunging currency and an oil price slump fuelled a spate of defaults.

Access Bank, another Nigerian bank, took over Diamond Bank last year.
Carlyle also bought into J&J Transport, a transport firm with mining customers and Traxys, which trades commodities and provides logistics.

In 2017, peer KKR & Co Inc disbanded its Africa deals team and sold off its controlling stake in an Ethiopian rose farm. That same year, Blackstone Group Inc. sold its stake in Black Rhino Group, an African infrastructure development firm, back to its management.