Private equity fund Ascent Capital eyes small firms with Sh4bn war chest

Private equity fund Ascent Capital will be looking to pump money in small and medium enterprises (SMEs) across the East African region with an eye on a controlling stake.

The firm, which recently announced raising Sh4.4 billion ($50 million) to be invested in growth enterprises in Kenya, Uganda and Ethiopia, said it planned to take control of most of the companies it plans to inject funds into, to give it a free hand in the running of their affairs.

“We prefer taking control where it is possible, and we don’t want to get into smaller stakes. If something goes below 35 per cent then there is no interest,” fund Managing Director David Owino told Nation in an interview on Tuesday.

The equity fund will put more focus on consumer-driven companies operating within the East African region but with a speciality on SMEs. The emphasis will be on those with high potential for growth to guarantee better returns on investment.

“Chances are high that most of the opportunities will come from Kenya as compared to the region. But, we believe that Ethiopia is a very big place where there’s been very little private equity money playing in that market,” said Mr Owino.

CLOSING DEAL IN ETHIOPIA

The firm’s target is to raise Sh6.1 billion ($70 million) from various sources, including high net worth individuals, development finance institutions, local and foreign institutional investors and pension funds.

“The first investment we are doing is in Ethiopia in the health services sector, and we are in the process of closing the deal,” said Mr Owino, but refused to name the company being funded and the amount of money involved.

Ascent is also looking to invest in a medium-sized financial services company in Kenya and a fast-moving consumer goods company in Uganda. About four manufacturing companies in Kenya, a construction materials firm in Uganda and about three more goods producers are being considered for investment.