(Bloomberg) -- Former Bridgewater Associates LP partner Richard Okello’s Sango Capital Management is taking a majority stake in an African private equity fund run by Synergy Capital Managers Ltd. and plans to seek possible exits from assets that are mainly in Nigeria.
Instead of paying a negotiated price for the increased stake in the fund, the parties agreed to share future proceeds received from the successful sales of the remaining assets in the fund, which include companies such as Viathan Engineering Ltd., Sango Investment Director Christian Roelofse said in an interview, without disclosing the value of the fund.
Synergy originally raised more than $100 million for the fund to mostly invest in West Africa’s biggest economy and Ghana.
Nigeria has faced years of acute foreign-exchange scarcity and instability arising from lower crude production and a lack of economic diversification. Its local naira currency has lost about 70% of its value against the dollar since June 2023, when President Bola Tinubu’s government introduced policy changes to lure inflows to help revive the economy.
The biggest challenges for private equity investors remain currency risk, illiquid and small domestic capital markets that raise the cost of doing business, and limited options to sell or list the companies, Roelofse said.
“For some of these assets, if you try and force-sell them in the current economic climate, you will not realize full value,” said Roelofse of Johannesburg-based Sango, which has about $500 million in assets under management. “It may be better to further enhance the value of the businesses before selling in more favorable conditions a year or two from now.”
There are few international buyers for African assets at the moment, leading to delayed sales of the businesses, he said.
“With transactions like these, Sango buys out the investors who are in these funds for longer than was intended when the fund was established,” said Roelofse. “For them, it provides an opportunity to have a cleaner exit from the fund sooner,” he said, adding that Sango wants to do more transactions like this.”
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