Emerging and Growth Markets | April 5, 2024

African pension funds back Adenia Capital’s fifth impact private equity fund

Lucy Ngige
Guest Author

Lucy Ngige

Mauritius-based impact private equity firm Adenia Capital raised $470 million to invest in African businesses delivering essential goods and services. Adenia tracks an extensive list of impact metrics: 2X gender criteria, job quality, employee benefits, water and energy use, and carbon emissions across its portfolio and supply chains. 

Its fifth and largest fund is the first to secure backing from three African pension funds, which are showing cautious but growing interest in private equity and small business finance. South Africa’s Public Investment Corp. and funds from Kenya and Ghana committed roughly $50 million, “a great first step to opening up an important source of capital for Adenia and the industry,” Adenia’s Stéphane Bacquaert told ImpactAlpha. 

Major development finance institutions including FMO, Proparco, the DFC, Findev Canada and Norfund also backed the fund. South Sez, Blue Earth Capital, and several European family offices participated. 

The fund invests in small and mid-sized businesses with strong ESG practices in light manufacturing, consumer goods, renewable energy and other sectors. Its early investments include solar financing company Enfin and last-mile delivery company The Courier Guy

Pension fund potential

The number of African pension funds are growing, as employer-based pension schemes emerge across the continent. Pensions fund managers have been reluctant to invest in private equity and venture capital, but they’re increasingly seeking “US dollar returns and diversification across Africa to balance out their exposure to local governments and markets,” said Bacquaert.

African pensions are emerging as investors in both physical and social infrastructure. South African state utility Eskom’s $10 billion Pension and Provident Fund invested $20 million in Development Partners International’s $900 million African Development Partners’ third fund. Kenya’s Banki Kuu Pension Scheme, KenGen Defined Contribution Scheme and Old Mutual Umbrella Retirement Benefits Scheme also backed the fund. 

Mirepa Investment Advisors and Injaro Capital, both fund managers in Ghana have recently succeeded in raising capital from the country’s $4 billion pension industry.