Equity firm Development Partners International has raised $900m in its third round of funding, closing a deal that will give an important boost to an investment ecosystem hard hit by Covid-19. DPI’s African Development Partners III Fund exceeded its target of $800m and has secured an extra $250m to co-invest in specific companies. The fundraising showed that investors recognized there was money to be made on the continent in investments that also had social impact. Private equity funds investing in Africa raised $1.2bn in 2020, down from $3.9bn in 2019, according to AVCA. Its report for the first half of 2021, due to be published this week, will show a flat start to the year with about $500m in final closes.
KKR and Carlyle, which once had big plans for Africa, have scaled back, citing the small number of investment opportunities of the right size. The $900m invested in the DPI fund came from pension and sovereign wealth funds, development finance institutions, insurance companies, asset managers, and impact investors, with about half from Europe, a third from the US and the rest from the Middle East and Africa. In addition to existing investors in DPI, which has $2.8bn in assets under management, some 25 new limited partners (LPs) had invested at least $5m each.