TLG invests in Uganda, Liberia, eyes bigger fund

TLG invests in Uganda, Liberia, eyes bigger fund

More than 75 pct of $25 million fund invested in Africa.

October 12, 2010 3:05 by Reuters

London-based frontier markets fund TLG Capital said on Tuesday it had acquired 20 percent of a Ugandan food processing firm and will this month close a deal on a Liberian medical facility.

More than 75 percent of the $25 million fund is invested in Africa, Zain Latif, principal of TLG Capital, told Reuters in a telephone interview, adding he hoped to raise the fund to as much as $100 million.

“Our fund is very consumer driven so we look at sectors that have traditionally been avoided or have not had much interest from outside investors,” the former Goldman Sachs banker said. “We feel there is a huge market in the rising consumerism of Africa. Everything that caters to that market is something we are looking at.”

Latif declined to say how much was spent on the stake in Uganda’s Vero Food Industries, which plans to start bottling water and packaging rice.

The water treatment line can process 40,000 litres per day and the rice plant can produce 30 tonnes of milled rice daily.

Vero Foods plans to introduce products such as glass bottles and flavoured water for high-end consumers, Latif said.

“As we’ve seen the enormous goodwill that has gone into east Africa, particularly Uganda, with respect to the oil industry, all the support services and investment, one of the key areas is going to be water and food processing,” he said.

“In the next few years, if Uganda reaches its potential, we feel that even our current capacity will be far too limited in dealing with the demand if we create a good brand name.”

Latif set up the private equity firm last year and will this week sign documents on its sixth investment — in the only private Liberian healthcare facility to have survived the war.

TLG Capital recently exited from a Ghanaian cancer facility and has invested in a joint venture between Indian drugmaker Cipla and Quality Chemicals Uganda, to manufacture antiretroviral and anti-malarial drugs.

“Medical facilities are something we are very keen on. We think healthcare in Africa has a lot of potential,” he said.

Most of TLG Capital’s investors are in Kuwait, Latif said. He hopes to raise the open-ended fund to $50-$100 million once it closes a few more deal in the next few months.

“We haven’t been fundraising because we have been focused on closing deals, which we feel is a better way of speaking to the market because you demonstrate what you are able to do and the path of investments,” he said.

(Editing by David Hulmes)