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Phatisa Food Fund 2 hits first close

Anna Lyudvig
Oct. 3, 2018, 9:19 p.m.
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Phatisa has announced the first close of its Phatisa Food Fund 2 (PFF 2), which has received capital commitments in excess of $120m. 

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Phatisa has announced the first close of its Phatisa Food Fund 2 (PFF 2), which has received capital commitments in excess of $120m. 

Given the strong interest, and with subsequent investors in different stages of their processes, Phatisa will continue with rolling closings and expects to reach a final close target of $300m by mid-2019.

PFF 2 is a successor fund to the African Agriculture Fund (AAF). 

Stuart Bradley, Joint Managing Partner, Phatisa, said: “We are delighted to achieve this milestone. Re-investments from our first Fund account for 88% of commitments, demonstrating strong support from AAF investors.” 

“We continue to attract the private sector, with a 70:30 split between commercial investors and development finance institutions at first close. With this round, we have now raised more than $400m for the African food and housing sectors,” he said.

For PFF 2, Phatisa will continue its focus on the team’s core skill set – the African food value chain – considering investments in mechanisation, inputs, poultry and meat production, food processing and manufacturing, logistics, aggregation and distribution across sub-Saharan Africa. 

The Fund will targeting buy-out and expansion transactions with an investment size of between $15m and $25m, building and exiting regional platforms.

As with AAF, by raising international capital to be invested into Africa’s food value chain, PFF 2 is aligning itself with the United Nations’ Sustainable Development Goals (SDGs), addressing in particular SDG 1: No poverty and SDG 2: Zero hunger, through its material contribution to food security. 

Together with TechnoServe, Phatisa is aiming to raise a second technical assistance facility (TAF) to work alongside PFF 2, building on the lessons learnt and TAF’s success in AAF. 

The use of blended finance will enable the firm to increase the development impact as well as to enhance financial returns.

The first close was timed to facilitate the completion of the Fund’s first transactions, setting the anticipated investment pace.

According to Duncan Owen, Joint Managing Partner, Phatisa is preparing to exit a number of AAF investments. 

“We are tracking solid returns, which we plan to replicate in PFF 2 – especially around inputs, mechanisation, logistics and FMCG. This is where our team of industry specialists from Unilever, Afgri, P&G, SAB Miller, Diageo and Imperial, feel at home,” he said.
 
With its investment into African businesses, Phatisa has already accounted for the production of over 2.6 million tonnes of food and food-related products and will continue to mark its progress by measuring its impacts against the SDGs.

Valentine Chitalu, Phatisa Chairman, said: ‘We have built a great team that has been recognised through the support of our investor base. The team has demonstrated its ability to source and execute proprietary transactions and use our in-house industry skills to drive real value in our portfolio companies. I am very proud of what we have achieved and excited by the opportunity ahead.”
 

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