DEG is a EUR 4.6 billion German government agency, and it has approximately EUR 871 million currently allocated to private equity. DEG invests in a range of private equity vehicles with a focus on emerging markets. It believes that small and medium-sized enterprises (SMEs) are important for economic growth, especially in emerging markets.
The government agency recently agreed to be an anchor investor in the first fund managed by Nairobi-based private equity firm Catalyst Principal Partners. The vehicle, Catalyst Fund I, will invest in mid-sized companies across Eastern Africa. A significant proportion of DEG’s private equity portfolio is allocated to investments in Africa and it anticipates that its allocation to this region will increase in the long-term. Across all investments, the organisation’s commitment to new opportunities in Africa totalled EUR 266 million in 2009.
DEG has also recently committed to Axxess Capital’s Emerging Europe Accession Fund. This fund will invest in mid-sized businesses in South-Eastern Europe and has also received backing from the European Bank for Reconstruction and Development (EBRD) and the European Investment Fund (EIF).
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