Alterra Capital Partners, founded in 2020, raised $140 million in an initial phase towards a $500 million fund for Africa’s growth. Influential investors support diverse sectors, including technology and telecommunications. Analysts emphasize its impact on economic development and infrastructure challenges in nations like Nigeria, proposing solutions for increased internet penetration.
Alterra Capital Partners, a private equity firm founded in 2020 by former Carlyle Group executives, Genevieve Sangudi, Eric Kump, Idris Mohammed and Bruce Steen, has raised $140 million in the initial phase of a $500 million fund.
This fund is poised to fuel growth in various sectors across Africa, including telecommunications, technology, logistics, healthcare, consumer, and retail. Influential investors such as Nigerian billionaire Aliko Dangote, along with Carlyle founders David Rubenstein and Bill Conway are reportedly backing this initiative.
Joining the league of investors are prominent entities like Norfund AS, Standard Bank Group Ltd., International Finance Corp., Deutsche Investitions- und Entwicklungsgesellschaft GmbH from Germany, and Allianz SE’s AfricaGrow fund.
According to information available on its website, the Africa-focused private equity firm based in Johannesburg, South Africa, leverages over 100 years of combined private equity experience, originating from the blending of Carlyle Africa and Emerging Capital Partners, which has already invested more than $2 billion in 23 companies across the continent.
Kolawole Oyebola, an analyst, highlights the significance of the fund’s strategy, emphasizing the diverse sectors it targets as pivotal for the continent’s economic growth.
“This successful initial fundraising is a testament to the confidence investors place in the potential of Africa’s dynamic and rapidly evolving landscape,” states Oyebola to FORBES AFRICA. “The fund’s comprehensive approach, encompassing telecommunications, technology, logistics, healthcare, consumer, and retail sectors, reflects a keen understanding of the multifaceted opportunities present in the African markets.”
Africa has increasingly become a focal point for global investors seeking high-growth opportunities. The fund’s primary goal is to support and catalyze innovation in key sectors, contributing to job creation, economic development, and the enhancement of essential services across the continent.
Oyebola further emphasizes the potential impact of the fund on Africa’s technology ecosystem, stating,
“Investments in technology and telecommunications are especially crucial, given their potential to leapfrog traditional development stages, bringing about rapid advancements in connectivity and digital infrastructure.”
The fund’s $500 million target signifies a substantial commitment to fueling transformative projects in Africa. Oyebola urges continued attention to the evolving investment landscape on the continent, stating, “As Africa continues to assert itself as a hub for innovation and economic opportunity, strategic investments like these will play a pivotal role in shaping its future trajectory.”
Technology enthusiast Destiny Young sharing his insights with FORBES AFRICA questions the potential benefits for his home country, Nigeria, emphasizing the critical role of infrastructure in enabling internet penetration.
“In investing in telecommunications and technology, it’s crucial to understand that it encompasses the entire infrastructure supporting internet access,” remarks Young.
Citing Surfshark data, he highlights Nigeria’s 109th global ranking with an index 44 times lower than the global average, underscoring challenges in internet access and quality.
Young emphasizes the impact of underfunding on Africa’s telecommunications sector, referencing a report by the South African Institute of International Affairs (SAIIA), which identified the continent’s Information and Communication Technology (ICT) deficit as a hindrance to development.
Noting Nigeria’s struggle to increase internet penetration amid funding deficits, he states, “Increasing internet penetration in developing economies requires a multi-faceted approach.”
Providing solutions, Young suggests measures for Nigeria, including promoting public-private partnerships, reducing mobile device and internet costs, enhancing digital literacy, encouraging local content creation, improving regulatory frameworks, attracting foreign investment, promoting innovation, and fostering collaboration among stakeholders.
He stresses the importance of ensuring private equity investments align with the long-term interests of the country and its citizens.
In the midst of global economic challenges, multinational tech consultant Napa Onwusah underscores the timeliness of Alterra’s focus on key African sectors, stating, “Considering the decline in startup funding and unique investors, targeted investments are crucial in this landscape.”
Onwusah commends Alterra’s strategic flexibility, allocating 50% of funds to dollar-generating companies, and notes the significance of the British International Investment’s $6 billion commitment to Africa.
To navigate diverse African markets, Onwusah emphasizes the importance of agility, market awareness, and tailoring strategies to local conditions, stating, “Maximizing impact requires a balanced approach to profitability and sustainability.”
Addressing challenges, Onwusah sees opportunities for impactful solutions, stating, “Infrastructure gaps and talent shortages can be addressed through strategic investments in development and education.”
She advocates for managing economic and political instability through diversified investments and proactive risk assessment.
Onwusah encourages a socially responsible investment approach, stating, “Contributing positively to Africa’s development is not just financial success but dispelling negative perceptions.”
She urges investors to view Africa as a dynamic landscape with potential for progress.
Citing McKinsey’s data, she highlights the potential of African startups to contribute $2.6 trillion to the continent’s GDP by 2030.
Onwusah emphasizes the cascading effect of increased funding in the tech ecosystem, fostering innovation, job creation, entrepreneurship, and sustainable economic development.
She says: “It’s about igniting a transformative journey, empowering local talent, and positioning Africa as a global innovation powerhouse, a journey Alterra’s fund has the power to catalyze.”