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US private equity firm Carlyle bullish about Nigeria

“The great explosion in private equity, if it is going to occur anywhere around the world in the next couple of years, is probably going to be in Africa, particularly sub-Saharan Africa, where the penetration rate is about one-twelfth or so of what it is in the United States.”

So said David Rubenstein, co-CEO of US-based private equity firm The Carlyle Group, back in August during the US-Africa Leaders Summit held in Washington DC.

He added Carlyle likes to invest in regions where competition for private equity deals is low.

Last week Carlyle announced it has made a $147m investment in Nigeria’s Diamond Bank, based in Lagos. The investment came through the bank’s recent rights issue, of which proceeds will be used to boost working capital, IT infrastructure and refurbishment of its branches.

The Diamond Bank deal was made through Carlyle’s $698m Sub-Saharan Africa Fund. To date the Fund has invested approximately $300m across a variety of industries and countries, including a Tanzanian-based supply chain manger and in a Mozambican logistics company. Africa’s richest man Aliko Dangote, and the African Development Bank are two of the fund’s anchor investors.

Despite Nigeria’s various challenges, such as the attacks by the Boko Haram group in the north, Carlyle remains bullish about the country.

“Nigeria is the largest and one of the fastest growing economies in Africa, and Diamond Bank is well positioned to continue to benefit from Nigeria’s attractive macro-economic trends,” said Genevieve Sangudi, managing director for the Sub-Saharan Africa Fund.

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