Databank, Ghana’s biggest investment bank and private money manager with $232 million in assets, is in the planning stages for a buyout fund that will focus on agricultural investments and financial-services companies in the country.
Databank closed a $36 million fund in May 2014 that acquired stakes in a Nigerian bakery, a juice factory in Zimbabwe, and a poultry producer in Burkina Faso, and which was supported by a $6 million technical assistance facility by the EU.
This second agricultural-focused fund is scheduled to be open to investors by the end of 2015, is targeting returns in excess of 10% over five years, and is considering acquiring a stake in a fruit processing company according to Kojo Addae-Mensah, chief executive officer of Databank. The money manager, which also owns a brokerage, corporate finance unit, and a researcher, is also seeking to increase assets under management (AUM) by more than three-fold to US$766 million by 2020.
Last year, Ghana’s agricultural sector which accounts for more than 20% of the country’s gross domestic product (GDP), grew at a faster pace than the country’s overall economy, due in part to a power shortage hampering industrial output. This power crisis has not dampened investor interest in West Africa’s second biggest economy however, according to Addae-Mensah, who states that private equity investors are mainly looking to gain entry through involvement in the country’s agricultural companies and ag sector.
To receive relevant news stories with summaries provided by GAI News, subscribe to daily or weekly service.