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8 business
When Helios Invest-ment Partners an-nounced the irstclose o its
sec-
ond private equity und in Jan-
uary 2010, it struggled to reachits $200m target. Less than
18months later, the und had its -nal close in June 2011 at $900m
the highest ever or an A rica-
ocused und with demand ex-ceeding $1bn. While many glo-bal
private equity managers arelabouring to win commitments
rom wary investors, Helios hasmanaged to position itsel at
thehead o a new A rican-led privateequity movement.
London-based Helios Invest-ment Partners was ounded in2004 by
ope Lawani and Baba-tunde Soyoye, two Nigerians with
Profile
Helios Investment PartnersThe Africa-focused private equity firm
founded by twoNigerian investors is a leading force in financing
dealsthat give companies a continental focus
in f b ua yth s y a ,H os and
V to boughtan 80% shan Sh s o
p oducts,d st but onand ta ngbus n ss s
n 14 A cancount s.Th p vat
qu ty g oups ct v y
s ng p t o
d ct toconsum s
decades o experience working orUS private equity giant exas
Pa-ci c Group. Early on, they won thesupport o the
CommonwealthDevelopment Corporation (CDC),
the UK governments develop-ment inance institut ion (DFI).CDCs
$50m was the largest equity investment in Helioss rst $305m
und. Tey understand the con-tinent, they know how to look orin
ormation, they know how tomonitor deals there, says Jean-Marc Savi
de ov, CDCs ormerport olio director or A rica.
he irm has gone on to winover some o the worlds richest
nanciers. Following the success
o Helios owers Nigeria (H N), which Helios ounded in 2005 torun
a network o mobile phonetowers, Helios decided to roll out
the business model across A rica.Te partners raised $275m
rom
nancier George Soros, ormerUS secretary o state Madeleine
Albright , Lord Rothschild andthe World Bank Groups Inter-national
Finance Corporation toadd to its own $100m investment.Helios owers
A rica (H A) now has a network o 3,500 towersin Ghana, Democratic
Republico Congo and anzania. It is inthe running to enter the
lucra-tive Kenyan market, a ter elkomKenya and Sa aricom
announced
in August they would move to atower-sharing model. his is agood
example o the Helios strat-egy: to take a success ul businessplat
orm, test it out in one country and then replicate it across
sub-Saharan A rica.
BiG TiCKeT iNVeSTMeNTS InFebruary, Helios teamed up with Dutch
energ y trader Vitolto buy Shells downstream oildistribution and
retail business
in 14 A rican countries or some$1bn. Its an interesting
transac-tion because o its size, which islarger than the vast
major-
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t h e a f r i c a r e p o r t n 3 4 o c t o b e r 2 0 11
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0 buisiness
ity o private equity deals in A rica, excluding South A
rica,says Edmund Higenbottam, di-rector o investment banking
and
nancing at Renaissance Capital.He says the deal is evidence o
a
trend to ollow a US or Europeanmodel, taking a controlling
stakein a company rather than sittingback as minority partners.
While it may seem like a risky decision or a private equity rmto
take on the management o a
eet o petrol pumps across A -rica, it is actually a
no-brainer,says Savi de ov. Te Shell deal was driven by volume and
basedon growing demand or uel orthe new cars bought by the bur-
geoning middle classes (see pages70-76). He says the question
orHelios is whether theyve boughtat a good price and whether
theyllbe able to meet the challenges o managing such a large port
olioo petrol stations across the con-tinent and to exit it.
Te rm is succeeding in thedi icult task o bringing in A -rican
investors such as pension
unds. Although 54% o the com-mitments to its Helios II und
came rom the US and 24% romEurope, 15% came rom A rica higher
than the average 0-10%
usually sourced rom local inves-tors. Its undraisers
persuaded
a broad spread o amily ofces,sovereign wealth unds and undso
unds to commit, though DFIsaccount or 28% o the total.
THe NeXT fiVe YeArS Helioshas yet to prove its exit
creden-tials. So ar, it has only completedone partial exit by
selling 40% o its holding in Nigerias First City Monument Bank, in
two tranch-es between November 2007 andJanuary 2008.
Te clock is ticking on its rst$305m, 10-year und. It is due
toexpire in 2016 but could be ex-tended or another two years i
SHellS dowNSTreAM
oil BuSiNeSS
Date February 2011Amount Approximate-ly $1bn (including$500m
from Helios)Activity Oil distribu-tion and retail plus lubri-cant
blending plantsRegion 14 countries in Northand sub-Saharan
AfricaObject Teaming up withthe Dutch energy companyVitol, Helios
formed two jointventures in which Shell will
remain a minority partner
iNTerSwiTCH liMiTed
Date December 2010Amount $110mActivity Payment processingRegion
NigeriaObject Helios took a 67%stake in Nigerias lead-ing card
payments com-pany, which runs the Vervechip-card issued by 16of
Nigerias 24 banks
CoNTiNeNTAl
ouTdoor MediA
Date December 2009Amount $146.8mActivity Outdoor
advertisingRegion 14 countries inSouthern and East AfricaObject
Helios led a consor-tium of two private-equityinvestors and South
Africanmedia company MSG Afrikato take a 100% stake inContinental
Outdoor Media,formerly INM Outdoor
Helios has distributed cash toinvestors right from year onesays
COO Henry Obi
15%of investmentin the HeliosII fund isfrom Africansources,which
ishigher thanthe averagecommitmentof 0-10%
investors agree. Helios has dis-tributed cash to investors
right
rom year one, says Henry Obi, itschie operating ofcer, and
thereare more exits in the pipeline inthe next 12-24 months. Obi
says
Helioss unds are targeting re-turns o more than three
timesinvested capital.
When Helios started H A in2009, it appointed ormer opera-tions
partner Charles Green aschie executive. Tey have a very active
approach to the manage-ment o all their port olio compa-nies, says
Green. Backed by theirparent rm, the latter are ready to
ght their corner and move asti they need to.
In May, Helios owers Nigeriamoved to sue elkom South A ri-ca or
breach o contract, accusingthe elkom-owned Multi-Linksnetwork o
reneging on a tower-sharing deal. A ter an agreementto sell
Multi-Links collapsedbecause o the contractual dis-pute, H N
decided to make itsown move, buying Multi-Links
or $10m in late June. What hadlooked like a legal impasse
wasturned into an opportunity. We
own the key assets o the compa-ny and we will go about trying
tocreate value rom those assets inany way possible, says Green.
Because o the size and com-plexity o their deals, Helioss
unds are particularly depend-ent on the health o global
mar-kets. ake the $184.5m it spentin August 2007 on a 22% stake
inPortugal elecoms A rican assets now grouped together as A
ri-catel. o exit, Helios wi ll either
need Portugal elecom to buy back its share, nd another com-pany
willing to buy the port olioor wait until Angola (where mosto the
assets are based) launchesa stock exchange.
Private equity is not new in A -rica. But the Wests largest
privateequity groups have only begunpaying it real attention. Now,
in- vestors who ve years ago wouldnot have dreamt o putting money
into the continent are hanker-
ing a ter the diversi cation that apan-A rican und can bring.
l
by G mma wa
A l l R i g h t S R e S e R v e d
3 Three invesTmenTs
Co- ound Top la an
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