INTERNATIONAL - Carlyle Group Inc. is spinning out its sub-Saharan African team to a new company formed by the managers of its $700 million regional fund, according to a person with direct knowledge of the matter.
The alternative asset manager is hiving off the fund after deciding against raising a follow-on fund to the one it closed in 2014, most of which has been invested, the person said, asking not to be identified because the matter isn’t public. The private equity firm will move the team, which includes Eric Kump, Genevieve Sangudi, Bruce Steen and Idris Mohammed, to Alterra Capital Partners from July, the person said.
The move comes as the coronavirus pandemic upends global markets, with the International Monetary Fund predicting sub-Saharan Africa’s economy will shrink by 1.6% this year, the worst on record. The sub-Saharan fund completed 10 deals of more than $400 million in the past three years, including the purchase of a majority stake in promotional products and clothing distributor Amrod, and in health and occupational safety business Nosa Group.
Carlyle investments in Africa weren’t without drama. The firm in 2014 bought almost one-fifth of Diamond Bank Plc in its first Nigerian deal, only to see the stock tank, with the lender eventually being bought out by a bigger competitor four years later.
Alterra Capital Partners will assume the management of the fund as sub-advisers to Carlyle, which will continue to invest in the continent through a strategic relationship with the new firm and its international energy fund, the person said. The team will continue to be based in Johannesburg and Lagos.
“Carlyle confirms that it has reached an agreement with the Carlyle sub-Saharan Africa Fund team to transition them to a standalone business, Alterra Capital Partners,” the Washington-based company said in an emailed response to questions. “Carlyle continues to believe Africa is an important region strategically and maintains its active presence on the continent.”