Ghana Fund Eyes Agriculture as Databank Readies Buyout Deals

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Ghana’s biggest private money manager plans to start a buyout fund that will invest in agriculture and financial-services companies in the West African nation.

“We’re building the pipeline to get it ready,” Kojo Addae-Mensah, chief executive officer of Databank Group, an investment bank and money manager with the equivalent of $232 million in assets, said in an interview on May 11 in the capital, Accra. The fund will target returns of more than 10 percent over five years, he said.

Databank closed a $36 million fund in May 2014 that bought stakes in a poultry producer in Burkina Faso, a bakery in Nigeria and a juice factory in Zimbabwe and which was supported by a $6 million technical assistance facility by the European Union. The second fund will open to investors toward the end of the year and will consider purchasing part of a fruit processing company, Addae-Mensah said.

Ghana’s agriculture industry, which accounts for more than a fifth of gross domestic product, grew at a faster pace than the overall economy in 2014 as a power shortage hindered factory output. Databank is expanding its private equity offering as the company, which also owns a brokerage, corporate finance unit and a researcher, seeks to boost assets under management more than threefold to 3 billion cedis ($766 million) by 2020.

Yield on Ghana’s Eurobonds due January 2026 jumped 12 basis points to 9.01 percent by 10:34 a.m. in Accra, the highest on a closing basis since March 27.

Interest in Ghana from investors and companies wanting to enter West Africa’s second-biggest economy hasn’t waned because of the country’s power crisis, with the government taking steps to improve electricity supply, Addae-Mensah said. Private-equity investors have been looking mainly at getting involved in agricultural companies, middle-to lower-end real estate and providers of small, unsecured loans, he said.

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