Zambia-focused PE fund hits first $40 million close

Harris Marley

Global Courant

Port Louis-based Monter Capital Partners successfully completed the first $40 million close for its $100 million flagship fund, in a milestone for a Zambia private equity firm.

The fund, which focuses on growth companies in core sectors such as financial services, clean energy and agribusiness, is based in Mauritius but operates out of Port Louis and in Sub-Saharan Africa.

The move is significant for the Zambian private equity space not only because of the amount of capital raised – which may be the highest ever raised by such a firm in the country – but because Monter has set a precedent with regulators that other financial services companies may now follow suit.

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Dr. Brian Malambo, founder of Monter Capital, tells African Business that “previously there was no legal framework in Zambia for the kind of structure we have put in place.” The flagship fund is designed to allow Monter to invest more flexibly than would otherwise be the case.

“The interesting thing about what we’re doing is we want to focus on specialty asset classes to support the primary classes (…) on the financial services side where we see opportunities in the tech space that help deliver fintech products, we can also leverage that as a secondary asset class,” says Malambo.

Monter initially set up the structure in Mauritius and then applied for permission to operate in Zambia through the country’s Securities and Exchange Commission. The fund was approved on 31 May, becoming the first fund to be established in Zambia.

Malambo believes other financial services firms may now try to follow Monter’s “alternative approach,” especially given the amount of capital the fund has managed to raise. “We are the first to authorize this type of fund,” he says.

“It is always the case that when people see something good coming, they want to follow suit, so we expect some other players to follow suit and come up with similar products for the development of the country.”

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Monter’s $40 million first round comes at a time when things are getting tougher for private equity firms, both in Africa and around the world. Private investment in emerging markets fell 22% in 2022, according to the Global Private Capital Association. Global factors, such as higher interest rates in the US, are partly responsible, although local factors, such as sovereign debt problems, may also help explain the slowdown. in fundraising.

Malambo says the fund focuses on companies in South Africa, Botswana, Namibia, Zambia, Malawi, Kenya, Rwanda, Ghana and Senegal.

The money will be used “to support the company we will be investing in, as well as provide technical support, corporate governance support and help strengthen executive teams.”

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Zambia-focused PE fund hits first $40 million close

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