This comes after investors in Catalyst, approved its plans to scale up investments in East Africa, driven by what the fund terms as strong consumer spending in the region.
Catalyst Chief Executive Officer Paul Kavuma said the fund is focused on investing in fast growth sectors such as financial services, manufacturing and consumer goods.
“We are currently progressing several new opportunities in the region and expect to complete another investment in the coming months, with the goal of between two to three significant investments of between $5million and $15 million each across the region each year,”
Kavuma told the investors who participated in Catalyst Fund 1.
Kavuma said while economic growth is expected to slow by approximately one percent as a result of inflation and the recent monetary tightening, East African economies remain robust with GDP growth expected to average five percent in the next year and rebounding to six to seven percent thereafter.
“Our policy makers may have over-compensated for the effects of the global financial crisis with prolonged stimulation of our economies which in hindsight were more isolated and robust than anticipated. While the corrective actions of raising interest rates to manage the exchange rates and tackle inflation were necessary in the circumstances, the extent of the intervention will adversely impact growth in the short-term particularly if austerity measures are introduced to reduce government spending,” he said.
Catalyst has recently received additional commitments from the East African Development Bank, European Investment Bank, Belgium Investment Office and Finnfund, and has plans to increase the fund size to $125 million (Sh11.7 billion).
Kavuma said there is increased interest from international and regional institutional investors in what has become the largest private equity fund exclusively focused on investing in the East African region.
Catalyst recently invested in ChemiCotex, a leading Tanzanian fast moving consumer goods business that has strong brands in oral, skin and hair care and is looking to replicate the same investments in Kenya.