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Private equity giant Development Partners International (DPI) has taken over management of Nclude’s USD 105 mn in AUM under a fund restructuring transaction between the the Africa-focussed firm and the local fintech-focused VC, according to a statement (pdf). As general partner, DPI will both run Nclude’s existing investments and make investment decisions going forward.
Not a fintech nerd? You should still care of the transaction: DPI taking over Nclude is a significant vote of confidence in the Egyptian economy. The London-based PE firm is a no-BS investor that has AUM of c. 3.1 bn and co-investments across three funds in Africa. That includes some USD 850 mn it has invested here over the last decade in big local names including MNT-Halan and Kazyon.
In choosing to up its exposure to Egypt, DPI is signalling that it thinks it can make money here in the years to come. Venture capital investors typically hold investments for a longer period than do PE firms, leaving DPI Venture Capital more exposed to any potential swings in the domestic economy. DPI could have gone anywhere, and it chose here. Food for thought.
It’s also big news for the continent’s fintech scene, considering that Nclude is the largest fintech-focused firm in Africa. Nclude has deployed upwards of USD 28 mn in companies including Khazna, Paymob, Connect Money, and Flapkap. The firm was set up with the help of the Central Bank of Egypt and is backed by the nation’s three largest state-owned banks, with an Egypt-first mandate that also includes the option of investing up to 30% of its commitments in startups from other African and Middle Eastern nations, with a view to helping them set up shop in Egypt.
Leading the team in Egypt is Mohamed Aladdin, a GP who will manage Nclude and the DPI Venture Capital Platform. Ashley Lewis (a familiar face in the local fintech community) will oversee things as managing partner and head of DPI Venture Capital.
Lewis’ mandate is to invest across the Middle East and Africa. The firm announced yesterday the launch of DPI Venture Capital, saying the push into venture capital will give it the ability to offer its investors “exposure to highly innovative growth-orientated businesses.” The launch “fulfilled our long-standing ambition to provide investors with a range of investment strategies in Africa,” DPI Co-Founder and CEO Runa Alam said. Bloomberg also has the story.
