Africa Lighthouse Capital, the local private equity broker, says it has exited its investment in Minet Botswana in a move hailed as crucial milestone in the development of the country’s capital markets. In a statement, the private equity firm stated that the landmark transaction completes Botswana’s first private equity investment life cycle – from raising pension fund capital, to investing in a domestic business, actively creating value through hands-on ownership, and ultimately exiting the investment and returning capital to institutional investors.
Under the transaction, Africa Lighthouse Capital’s ALC Fund I will exit from its 33.33% equity stake in the Botswana subsidiary of Minet. ALC Fund I was amongst Botswana’s first generation of pension fund-supported private equity funds. The firm added that the profitable exit demonstrates that Botswana pension fund savings can successfully finance local private businesses through a locally managed private equity fund, with value created over time, and capital ultimately returned to local institutional investors.
“This is a significant milestone not only for Africa Lighthouse Capital, but also for our seven local pension fund investors and for the development of Botswana’s capital markets,” said Bame Pule, Founder and Chief Executive Officer of Africa Lighthouse Capital.
“When our investors committed to ALC Fund I, they were supporting more than a new fund. They were stimulating the development of a new capability for Botswana’s capital markets. This transaction demonstrates that the full private equity model can be successfully executed locally – from fundraising through to exit.”
Minet Botswana is financial services platform consisting of five local companies with its local business spanning insurance brokerage, pension fund administration, and risk consulting. ALC Fund I’s investment was one of the earliest institutional private equity investments in a leading Botswana financial services platform.
Following ALC Fund I’s investment in June 2021, Africa Lighthouse Capital representatives served on the boards of all of Minet’s Botswana companies.
“The Minet investment reflects core aspects of Africa Lighthouse Capital’s investment philosophy,” Pule added. “We seek to invest in established market leaders, support governance and institutionalisation, protect downside through disciplined ownership, and realise value prudently. The successful exit from Minet is an important proof point for our approach.”
The completion of the exit transaction comes as Africa Lighthouse Capital prepares to launch fundraising for its second private equity fund, building on the experience and track record established through ALC Fund I. Africa Lighthouse Capital believes that Botswana’s first completed private equity life cycle provides a strong foundation for the continued development of private capital as an important component of the country’s financial system. Financial details of the exit transaction were not disclosed.