By D E Wasake, FCCA, Principal, Inachee.com

Basic information

Target:

Emerging and mid-sized companies

Sector focus:
  • Consumer goods and retail
  • Financial and business services
  • Industrials, manufacturing and value-add processing
  • Technology and telecommunications

.

Amounts provided:

USD5 million to USD 20 million

Funding type

Private equity

Key criteria
  • High growth and profitability
  • Capability to expand within the region
  • Strong cash flows
  • Firms with financial restructuring or recapitalization requirements

Further information

www.catalystprincipal.com

+254 20 429 6000; +254 733 400 499

Email: invest@catalystprincipal.com


Who is behind the fund?

Catalyst Fund 1 LLC which is managed by the Mauritian based Fund manager, Catalyst Principal Partners LLC is a $125m East African focused private equity fund. It invests in Kenya, Uganda, Rwanda, the Democratic Republic of Congo, Ethiopia, Tanzania, and Zambia.

It has a number of institutional and wealthy private investors including DEG (the German Development Finance institution) and African Development Bank (AfDB).

What is the process like?

This is not clearly set out on the website but it is expected that the process from start to finish will include:

In summary:

  • An initial executive summary from your business plan is submitted to them
  • If they are interested, it is more likely that they will then request for a detailed business plan.
  • Thereafter they will follow this up with a face to face meeting to assess the opportunity
  • Once they approve in principle, the other aspects include the due diligence and closing.
  • At closing the fund expects to take a strategic minority or majority share in the target company (say 25-49%).

Our tips for success?

Strategy for the urban population. The fund is keen to invest in industries that will be looking to capitalize on the increasing urbanization in East Africa including the rural mass market that is often under catered for. Your business strategy (and therefore plan) should clearly articulate how you will market to this demographic.

Your marketing strategy should therefore strongly reflect how you will target this increasing segment particularly in East Africa where the population is predominantly young. In Uganda for example it is estimated that over 78% of the population is below 30 year.

Corporate governance.  Like many private equity firms, an experienced team is key and so it will be important not only to demonstrate a strong team but corporate governance quite critical particularly as this fund considers pre listing entities (pre IPO). To list on a stock exchange like the Uganda Securities Exchange (USE) good corporate governance is critical and so you can expect this will be a key focus for this fund.

Your strategy and/or plan should therefore clearly articulate how you meet good corporate governance principles including ethical principles like fair trade, environmental and social responsibility.

Otherwise best of luck!  If you need assistance, contact our team

Disclaimer

Inachee is not an agent or connected to this entity. It is an independent thought leadership and advisory firm. The information provided is based on our research, experience and in many cases by speaking to this entity’s personnel. Whilst we have taken steps to ensure the accuracy of the information presented here, there can be no guarantee that it will remain accurate.