Development Partners International (DPI), a $1.1bn Africa-focused private equity firm, has raised $725m for its second pan-African fund from a range of institutional investors, exceeding its $500m target.

Runa Alam, CEO and co-founder of DPI, said that with significant allocations from global institutional investors, “Africa now represents an increasing proportion of investors’ PE portfolios”.

“With a total value of deals of $8.1bn in 2014 and a record $4bn raised by PE investors, we are in a different place today compared to where we were at the time of our first successful fund closure of ADP I in 2008,” she said.

DPI said the successful closing of ADP II comes on the back of a strong deal-making year in 2014.

Last year there were three new deals announced in ADP II and two exits in ADP I including the exit of Nigerian insurance company Mansard to global insurance player AXA.

DPI is a London-based private equity investment adviser, established in 2007, which currently operates across 18 countries in Africa.

The firm focuses on high-growth, well managed African companies benefiting from the fast-growing emerging middle class.

The firm’s investor-base includes corporate and public pension funds, endowments and foundations, funds of funds, family offices and development finance institutions from across the US, Europe, Middle East and Africa with significant interest from US investors, which currently make up just over 40% of its limited partner base.

The ADP II, a 10-year Guernsey limited partnership, will typically take significant minority stakes in businesses across a range of sectors including the financial services, healthcare, education, construction, logistics, telecoms and consumer goods sectors.

“There are an increasing number of investible, high quality companies and industries, and many exits opportunities with highly attractive multiples,” said Alam.

Some of ADP II’s existing portfolio companies include: a private university Université Privée de Marrakech; Africa’s largest privately-owned parcel distribution company RTT; and a home-shopping and credit retail company HomeChoice.

DPI, which targets an IRR of 30%, said Africa has an attractive risk/return profile because the market is underpenetrated in terms of private equity investment.

This, coupled with DPI’s local partners’ network, allows DPI to access high quality companies that fit its investment thesis.

Idris Mohammed, Partner at DPI, said: “For a firm where the entire investment team comes from Africa, we are not only pleased by the support our investors have shown, but also excited that we will continue to put capital to work in this vibrant and ascendant region and to deliver value to both our portfolio companies and our investors.”