Silk African Food Fund
Last updated 12 May 2020, by Impactyield.
Silk Invest is one of the top investment houses in pan-African listed equities, and has created a separate private equity team to become among the leading players in Africa’s private equity industry.
The Silk African Food Fund is a Luxembourg domiciled, closed end SICAR. It aims to achieve an IRR of 25% over the 7-year term of the fund by investing in the African food and beverage sectors.
Currently there are more than 750 million consumers in Africa. This number is expected to reach a level of more than 1.25 billion in 15 years.
Increased purchasing power has resulted in a thriving middle class; Africa’s average GDP per capita increased from $1.5K in 1999 to $2.5K in 2009. The IMF expects this number to further increase to $3.1K by 2014.
Silk Invest works with successful African food companies and enables them to further scale-up their operations through growth capital and by implementing the best management strategy. It is the only Africa-focused private equity fund investing exclusively in the value added food sector, outside of agriculture.
Waseem Khan is the head of the fund’s investment team and has over 20 years of experience in asset management and private equity. He has worked in senior roles at sovereign wealth funds – such as Adia and Kia – and at leading global banks – such as Wells Fargo, Citigroup and RBS.
The African Food Fund is an all-Africa fund, focusing exclusively on the value added food sector. Potential targets exclude primary agriculture, and are in high added value food and beverage products and retail outlets.
The fund has a diversified country and sector approach, with the initial focus on six major African countries, followed by another seven at a later stage. To ensure adequate diversification, a maximum of 20% is invested per country, in 15 to 20 companies with clear competitive advantages across different sectors.
The fund chooses companies with strong management, an established cash flow and solid organisation. It looks for high growth potential, by leveraging competitive positioning and trusted brands.
of track record
the year funded
Universal access to safe and nutritious food
Key performance indicators
Asset manager: Silk Invest
Product track record: Fund has 13 years of track record
Target IRR: 25%
Committed Capital: 15,000,000 EUR (Euro)
Target return category: Risk-adjusted market-rate of return
Fund domicile: Luxembourg
Product status: Open - committed capital
Style/Stage: Growth Stage
Inception year: 2010
Vintage year: 2011
Target region: Africa, Emerging countries
Target close date: 01/08/2013
Product term: 7 year term
Assets under management: 100,000,000 EUR (Euro)
Investment size: Min: 1,000,000; Max: 40,000,000; Avg: 7,500,000
Co-investment policy: Only with LPs
Currency of investments: USD (US Dollar)
Currency for fund / product figures: EUR (Euro)
Fund investments to date: 3
Fund investments to date exited or repaid: 0
Management fee: 2%
Carried interest: 20%
Hurdle rate: 8%%
GIIN Investors' Council Investment: No
Limited Partners / Investors: n.a.
Limited Partner / Investor Type: Development Finance Institution (DFI), Family Office, Pension Funds, Other Institutional Investors, Retail Investors
Phone number: +44 208 088 1040
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CIO Private Equity Investments and Managing Partner
Silk Invest works with African food companies and enables them to further scale up by implementing the best management strategy.
Through their experience and local presence, Silk Invest is able to have a thorough understanding of the markets in which it operates. This contributes to the companies' competitive advantages, and results in an increased substitution of products that are currently imported from outside Africa.
The fund will also play an active role in the management of the portfolio companies, focusing specially on strengthening environmental, social, safety and corporate governance standards.
The Silk African Food Fund helps companies to enter other African countries, thereby facilitating regional trade, and the specific sector focus of the fund will transfer know-how and technology between portfolio companies.
Moreover, the fund has a strong development impact. A 2009 Unilever study on the food sector in South Africa has quantified an employment multiplier of close to 23, a multiplier of total economy wide output of nearly three times sales, and a tax contribution and GDP impact of 50% and 150% of sales respectively.