Swedfund invests in African Development Partners II

Development Partners International (DPI) launches its second fund, African Development Partners II (ADP II). Through an investment in ADP II, Swedfund sees an opportunity to contribute to the expansion of a number of growing companies in Central and Sub-Saharan Africa.

Utilizing one of Africa’s most experienced investment teams, DPI has successfully invested in numerous African companies, resulting in a significant positive impact on society through the creation of new jobs and payment of taxes in the participating countries. DPI exercises an active ownership with a clear focus on ESG issues, such as business ethics and anti-corruption, to transform growth companies into sound businesses.

Swedfund’s mission, as a long-term and responsible investor in local companies, is to attain lasting developmental results in our countries of operation. Swedfund’s investment strategy rests on three main pillars – private sector development, sustainability and financial viability.

“The greatest developmental results in the private sector in Africa are achieved through generating employment opportunities in growing companies. Through ADP II, DPI focuses on investments in this segment using Swedfund’s three main pillars as a foundation, so the strategy fits very well with Swedfund’s overarching strategy and goals to invest in sustainable and growing companies,” says Fredrik Törgren, Senior Investment Manager. “Today, it is a challenge to raise capital for funds in developing markets, which gives us, as a Development Finance Institution (DFI) an even more important role to play.”

Currently, DPI has nine companies in its investment portfolio (ADP I) with operations in almost 20 countries in Africa. The companies show strong growth and operate in sectors such as insurance, banking, food processing and telecommunications, sectors with considerable investment needs. DPI recently had a first closing for its second fund ADP II, in which Swedfund invests alongside other DFIs such as IFC, CDC and DEG.

ADP II will focus on growth companies with viable business models and operations. It will invest throughout Africa within most sectors and emphasize sectors with significant growth potential and development results: financial services (banking and insurance), education and healthcare companies, and manufacturing industries.

ADP II is domiciled in Guernsey, which is a common domicile for African funds. The main reasons for choosing Guernsey as a domicile are its well established financial regulatory system, its effective judiciary system, its predictability in corporate and tax law and the fact that double taxation agreements are in place. Swedfund, like other DFIs, do not accept any investments in funds domiciled with intent to evade taxes or to avoid transparency. The Fund’s portfolio companies pay tax in their respective countries of operation.

Guernsey is one of 120 countries that are members of OECD’s Global Forum Peer Review Process which monitors and supports increased transparency and exchange of information for tax purposes. Guernsey as an investment domicile is consistent with Swedfund owner’s instruction.