Kibo Capital Companions remains to be in divestment mode, persevering with to unwind investments from its final fund because it closes out older positions and returns capital to buyers.
Latest transactions present a gentle sample: a portfolio constructed within the mid 2010s is being transformed into money by means of staged exits somewhat than a single dramatic sale. Individuals acquainted with the agency’s exercise say the agency has been working by means of a number of holdings throughout East Africa, with monetary companies and logistics among the many most seen.
One of many notable strikes has been the sale of Kibo’s place in I&M Financial institution Tanzania. The stake dated again to the interval after I&M was constructing a stronger regional footprint, and the exit marks a clear break from a holding that had change into comparatively mature. Market disclosures in previous years indicated Kibo held a major minority place, roughly a fifth of the financial institution at one level, alongside different institutional and native shareholders.
That Tanzania exit adopted an earlier sale in Rwanda. Kibo beforehand disposed of its whole stake in I&M Financial institution Rwanda, describing it on the time as a full exit for its second fund after investing across the financial institution’s public itemizing. The Rwanda sale was framed as a profitable closeout, pointing to progress initiatives through the holding interval and an improved working platform.
Past banking, Kibo has additionally been trimming publicity to the true financial system. In Kenya, it bought its curiosity in Normal Cargo Group, a logistics and distribution enterprise with roots in Mombasa’s clearing and transport ecosystem, to Velogic, the logistics arm of Rogers Group. Velogic was already the bulk shareholder, so the deal functioned much less like a takeover and extra like a consolidation of possession.
Kibo’s method has lengthy centered on progress stage companies somewhat than giant buyouts, with deal sizes usually tailor-made to small and mid market firms. That technique can produce robust outcomes, however it additionally means exits can take time, particularly in markets the place strategic consumers are selective and capital markets are shallow.
The backdrop issues. Fundraising has tightened throughout personal fairness, and smaller managers centered on single areas have confronted a harder pitch to safe recent capital. In that surroundings, promoting down current positions and returning cash can change into the principle precedence, each to fulfill fund obligations and to maintain investor confidence intact.
Kibo’s newest wave of exits underlines a easy fact about personal fairness in Africa: the true work typically occurs on the finish. Turning property into money might be slower than making the unique funding, and the most effective managers are judged as a lot by how they exit as by how they enter.
The agency’s divestment run is more likely to proceed, deal by deal, because it closes out remaining holdings and decides what its subsequent chapter will appear to be in a modified market.
