By Tiisetso Motsoeneng and Helen Nyambura-Mwaura
JOHANNESBURG (Reuters) - Carlyle Group is examining potential investments across sub-Saharan Africa and especially in Nigeria, the co-head of its Africa fund said, as the U.S. private equity firm looks for companies that tap into the region's rising consumer.
While the resource-rich continent has traditionally drawn mostly mining companies, it is increasingly becoming a hot spot for investors interested in rapid growth in consumer spending and higher disposable incomes.
"We have a strong pipeline. We would hope to be in a position to announce something over a reasonable time frame," Marlon Chigwende, Carlyle's co-head of sub-Saharan Africa, told Reuters in an interview ahead of the Africa Investment Summit.
"We see tremendous opportunities in Nigeria with the sizeable resources that we have and our on-the-ground presence," he said.
While private equity firms are increasingly turning their gaze to sub-Saharan Africa, Chigwende said there were plenty of opportunities given the general lack of capital across the region.
Irish rock star Bob Geldof has raised $200 million for his "8 Mile" African private equity fund, while London-based Helios Investment Partners raised $900 million last year for its Africa fund.
Chigwende declined to say how many deals were under discussion and how much Carlyle expected to spend.
Carlyle is in the process of an initial public offering that could raise as much as $762.5 million.
The African Development Bank said last month it would be investing $50 million into a $500 million sub-Saharan Carlyle fund.
Carlyle would likely tap the consumer spending via fast-moving goods, financial services, telecommunications, healthcare and pharmaceuticals, Chigwende said.
Many deals in Africa would be in companies seeking both capital and expertise to help them expand beyond their home countries, unlike in South Africa, where private equity deals tend to be straight buyouts, he said.
Carlyle, which has $147 billion assets under management, will shy away from direct investments into resource companies but could take an interest in companies that service miners, such as equipment repair firms, he said.
Other than Nigeria, South Africa and Kenya are also on Carlyle's radar and to a lesser extent Ghana, Tanzania, Mozambique and Botswana, Chigwende said.
The deal size could vary depending on the country and the sector, he said. In general, investors in Africa expect higher returns to offset actual or perceived risk, and also because there is real growth on the continent, Chigwende said.
"Certainly a lot of international investors, in a purely equity fund, would expect well north of two times return on their investment," he said.
(Additional reporting by Enos Phosa; Editing by Dan Lalor)
