Due Diligence: Investors have barely scratched the surface of Africa’s food and agri opportunities

Jaco Maritz caught up with Herman Marais, managing partner of EXEO, to discuss the unexploited opportunities for private equity investors in the continent and the dealmaking lessons he has learnt over the years. He also revealed the one deal that got away. Here are slightly edited excerpts from the conversation.    -Read More-


30 January 2019: While the beverage industry is dominated by global brands, good investment opportunities still exist in companies with excellent management, a good product offering and strong distribution channels.

This is according to Avril Stassen, a Senior Partner at EXEO Capital, who has announced that their Agri-Vie Fund II – a private equity fund focused on food and agribusiness investments in Sub-Saharan Africa – concluded the subscription to 36,5% of South African FMCG manufacturer, Jumbo Brands, in December 2018.

“EXEO Capital has had its eye on an investment into the FMCG industry for some time now. The continued long-term growth potential of the sector, its defensive character, sound exit potential and scope to scale businesses to a regional level all bode well for a good investment opportunity.

“We believe that Jumbo Brands is the perfect partner in this regard, having shown very strong growth in the last few years, particularly within the South African middle and upper-middle market segments,” says Stassen. He goes on to note that this partnership is in line with Agri-Vie’s value proposition of commitment to grow current products and brands as well as acquire similar businesses where synergies and scale can unlock value.

Jumbo Brands, founded in Durban in 1985 by the Kraaij family and relocated to Gauteng in 2006, has a strong focus on the manufacturing of fruit juice concentrates, squash, cordials, coffees, hot chocolate, and lemon juice. The company also manufactures corn and pellet style chips and has brands that include Boston, Fruity Treat, Jolly Jumbo, Boost-A-Bag, and Fiesta’s. It has recently acquired the Café Enrista instant coffee brand from a global manufacturer and will begin manufacturing it in-house in its Johannesburg factory in early 2019.

Fanie Venter, Chairman of the Jumbo Brands Group says that they look forward to the future growth opportunities resulting from the partnership with EXEO Capital. “While we are experienced with all aspects of operations, growth strategy and synergy extraction, EXEO Capital will play a major role in helping to identify and acquire compatible businesses as part of the company’s platform growth strategy.”

Despite the country’s relatively stagnant economic state and political uncertainty, Stassen believes that South Africa is still one of the more stable countries in Sub-Sahara Africa and one of the more attractive investment destinations in Agri-Vie’s investment universe. “This is particularly true for local companies that are combining their business success while actively working to make a positive social impact in the country.

“Jumbo Brands, for example, employs well over 100 people – a significant number of which are women – and has set specific BEE contribution targets for itself as well. The company is also involved with several charities to which it regularly donates products.”

Gustav Kraaij, CEO of Jumbo Brands says that the transaction with EXEO Capital has also facilitated the transition of the Kraaij family ownership to the current generation. “We are excited to include EXEO Capital in the very successful partnership that we have had with Fanie Venter and Jose Frazao as we jointly pursue the growth opportunities of the beverage and snack markets.”

The $150m AUM Agri-Vie Fund II investing in Jumbo Brands is managed by EXEO Capital. This is a second Agri-Vie Fund, building on the success of its predecessor Agri-Vie Fund with $100m in AUM. The Fund’s deployment programme continues to gain momentum, having now made five investments across the region since 2017.


About EXEO Capital and Agri-Vie
EXEO Capital is a pan- African, mid-market private equity investment manager with operations in nine countries in Sub-Sahara Africa. Operating from offices in Cape Town and Nairobi, EXEO Capital manages the Agri-Vie Funds I and II (www.agrivie.com), focused on the food & agri sector of the region since 2008. The firm tracks complementary growth investment opportunities in the region with a view to future investment platforms.

EXEO is a financial service provider authorised by the Financial Services Board, Registration number 46251. For more information visit www.EXEOcapital.com.


21 May 2018: Africa-focused private equity manager, EXEO Capital, has announced an investment of USD 6.4m into Capital Fisheries – a market-leading Zambian food distributor that specialises in the cold-chain distribution of animal proteins. Concluded at the end of April 2018, the investment was made by EXEO Capital’s Agri-Vie Fund II – a private equity fund focused on food and agribusiness investments in Sub-Saharan Africa.

Kennett Sinclair, partner at EXEO Capital, says that the decision to invest in Capital Fisheries was driven by the market prospects for this line of business in Zambia and the proven business model of Capital Fisheries.

More than half of the animal protein consumed in Zambia consists of fish, says Sinclair. “Capital Fisheries already has a large market share in fish distribution in Zambia. The company’s innovative model of wholesaling frozen products from reconfigured, refrigerated shipping containers placed permanently at markets, small shopping centres and areas where people congregate, has been tremendously successful.”

Capital Fisheries’ Zambian founding shareholders, Damian Roberts and Gavin Thomas, say that consumer spending is expected to accelerate the company’s current growth. “Zambia’s population is forecast to grow at 2.8% per annum to 2030, with an urbanisation rate of 4.8% per annum. We plan to double our wholesale depots and the supporting cold-chain logistics over the next two years.”

Sinclair echoes this sentiment, adding that Zambia’s GDP per capita is forecast to increase by 2.1% per annum to 2030.“You have all the ingredients necessary for excellent further growth prospects for this company,” he says.

Capital Fisheries sells fish, sustainably harvested in Zambia, Zimbabwe and Namibia, mainly tilapia or bream and horse mackerel. More recently, it added smoked fish, as well as different cuts of Zambian beef and sausages produced from locally sourced fresh meat as well as certain imported products. The value-added products are processed in a modern fish and meat plant in Lusaka.

Roberts and Thomas add that Capital Fisheries looks forward to the business acumen and management to international standards that will be provided by Agri-Vie. “We want to position our company as a business leader in sustainable corporate practices in Zambia in terms of governance, reporting and transparency, and in environmental and social management.”

Responding to this, Ellora Ghosh, Investment Associate at EXEO Capital, says that Agri-Vie’s policy is to bring about environmental and, especially, social benefits, whilst achieving a good return on investment. “Approximately 3 000 female micro-entrepreneurs purchase wholesale from Capital Fisheries depots across the country and sell the products at informal markets. The company also purchases some of its locally caught fish directly from local women who have been trained in food hygiene and are supplied with packaging materials. We are working with Capital Fisheries to provide further support to these micro-entrepreneurs – a recognised way to bring about socio-economic benefits with a substantial multiplier effect.”

Lastly, Sinclair says that they are confident that this investment will build on EXEO’s previous investments in food and agribusiness in Sub-Saharan Africa via their Agri-Vie Fund I, and on the successful exits that were made over the past two years.


About EXEO Capital and Agri-Vie EXEO Capital is a pan- African, mid-market private equity investment manager with operations in nine Sub- Saharan countries. Operating from offices in Cape Town and Nairobi, EXEO Capital manages the Agri-Vie Funds I (USD100m) and II (USD 175m) (www.agrivie.com), focused since 2008 on food and agribusiness. EXEO is a financial service provider authorised by the Financial Services Board, Registration number 46251. For more information, visit www.exeocapital.com.


Food & Agribusiness Investment Fund Agri-Vie and Norfund announced a $17 million co-investment in flower company, Marginpar. Joining CNBC Africa for more is Herman Marais, Managing Partner, EXEO Capital.

Watch the video HERE



17 April 2018: Agri-Vie and Norfund have announced a USD 17m co-investment into the Marginpar Flower Group Holdings. The Marginpar Group has expanded its business through the acquisition of Carzan Flowers in Kenya, Marginpar Ethiopia in Ethiopia and Marginpar BV in the Netherlands. These acquisitions add to the group’s existing investments in Kariki Limited, a Kenyan summer flower producer.

“The joining of forces will facilitate a future strategy of sustainable growth and amalgamation of innovation, production and marketing within the supply chain of niche and varied summer flowers. Through this consolidation, the individual companies will build on each other’s expertise whilst still being able to focus on their core activities,” says Richard Fernandes, a Director within the Group.

“Norfund is delighted to contribute to the growth of floriculture in East Africa, which is a primary employer and foreign exchange contributor to the East African countries”, says Managing Director of Norfund, Kjell Roland. He adds, “This investment is focused on employment creation and export, and fits very well with our strategy to contribute to sustainable enterprises and economic development in Africa”.

Herman Marais, Agri-Vie co-founder and managing partner at EXEO Capital, the fund manager, says that this investment is a perfect fit for the fund, which focuses on food and agribusiness in Sub-Sahara Africa. “Our vision remains to be a catalyst for sustainable growth through investing in foundation sectors of Africa’s economies. As an increasing proportion of global cut flowers are grown in and exported from East Africa, supporting the sustainable growth of this industry is very much in line with this vision.

“The Kenyan cut flower industry is sophisticated and now one of the world’s leading suppliers of cut flowers with a reported 35% market share in the European Union. Ethiopia is positioned as the second largest flower exporter in Africa after Kenya, with over 100 grower companies on 1,700 hectares. The consolidation of production and marketing capabilities brought about by this transaction is in line with global trends in the industry and will enable a competitive advantage,” he explains.


About the partners:


Norfund is owned by the Government of Norway and serves as an instrument in Norwegian development assistance policy. The fund’s mandate is to support the building of sustainable businesses in developing countries and thereby contribute to economic and social development.

Norfund always invests together with partners, be it Norwegian or international. The three main industries for investments are clean energy, financial institutions and Food & Agribusiness. Norfund’s geographical agri-business focus is in East and Southern Africa, with offices in Nairobi and Maputo. In addition, Norfund invests in selected countries in Asia and Latin America, with regional offices in Costa Rica and Bangkok. Norfund has 69 employees’ world-wide and USD 2.5 billion in committed investments by the end of 2017.

For more information, see: www.norfund.no

Agri-Vie Fund II

Agri-Vie is a private equity investment fund focused on food and agribusiness in Sub-Sahara Africa, a foundational sector of the continent’s economies. Since inception in 2008, Agri-Vie has invested USD 125 million in the food and agribusiness sector in Africa. The right mix of capital, active partnership and business building expertise enables them to unlock value for investors, while positively impacting on communities and their environment. The Agri-Vie Funds are managed by EXEO Capital.

For more information, see: www.agrivie.com and www.exeocapital.com

StarBright & Kariki

Starbright, through Kariki, owns four farms situated at differing altitudes in the Kenyan highlands, allowing the group to produce an assortment of different flowers for export, including, Kangaita farm in Nanyuki, Kariki farm in Juja, Kudenga farm in Naivasha and Hamwe farm in Moloa production area of approximately 130 ha of varied and niche summer flowers for the export market employing 1,800 people. Kariki has won global recognition for its successful implementation of the Kaizen model for staff empowerment and productivity in an agribusiness environment.

For more information, see http://kariki.biz/

Marginpar BV

Marginpar is one of the leading players in marketing and sales of summer flowers from Tanzania, Kenya, Ethiopia and Zimbabwe, through forming long lasting and sustainable partnerships between breeders, growers and the market.

Going forward all companies linked to the group will trade their product under the Marginpar name strengthening its position as a worldwide brand for interesting, varied and niche summer flowers.

For more information, see http://marginpar.nl/


Carzan was established in 1992 as a small family business which has grown into a full-fledged commercial operation with three large farms spanning 140ha of production creating employment for 1,300 people. The three farms are at two very distinct and separate locations and altitudes which enable the best growing climate for the spread of summer flowers that it produces for the export market.

For more information, see: http://carzankenya.com/

Marginpar Ethiopia

Marginpar Ethiopia was established in 2006 on one site with the focus of producing niche summer flowers. Production now spans over three sites close to each other all in the highlands west of Addis Ababa, Ethiopia. The company is in the process of scaling up to 60 ha of production of summer flowers all for the export market. Of interest is the ability to utilise Ethiopia’s national airline, Ethiopian to supply product to various markets across the globe from North America, Japan and the Far East.

For more information contact:

At EXEO Capital for Agri-Vie: Mr Herman Marais: hermanm@execocapital.com +27 83 377 6234

At Norfund: Mr Kjartan Stigen, kjatan.stigen@norfund.no +47 930 09 638

At Kariki: Mr Richard Fernandes, richard@kariki.biz +254 722 526 768


EXEO Capital’s Agri-Vie fund announces investment in Terrasan

07 February 2018: EXEO Capital has announced an investment into a fast-growing aquaculture company operating on the South and West coasts of South Africa – TerraSan. Kennett Sinclair, partner at EXEO Capital – an Africa-focused private equity manager – says that as wild-caught fish numbers decrease due to stricter regulated marine activity, climate effects and trading regulations, aquaculture – the breeding of fish and other aquatic animals under controlled conditions – continues to gain popularity across the world. Aquaculture has also seen rapid growth in South Africa given the high value export-oriented nature, local government support and expansion opportunities.

Sinclair says that it is for this reason that their Agri-Vie Fund II – the private equity fund focused on food and agribusiness investments in Sub-Saharan Africa – has concluded an investment into TerraSan.

“The fundamentals driving the aquaculture industry globally as well as in Sub-Sahara Africa support the strategic rationale for the transaction. In addition, this partnership introduces the potential for expansion and value addition across the TerraSan business to a level not possible before.”

A mature business with good management, a large percentage of black shareholders and very sound corporate governance, TerraSan has the proven ability to be a platform for other acquisitions, Sinclair explains. Dr Mohammad Karaan, Executive Chairman at Terrasan said: “Terrasan is pleased to welcome Agri-Vie to its fraternity of shareholders. We look forward to their contributions to our company as we strive to expand our investments.”

Despite being a long-standing business, Sinclair points out that TerraSan exhibits exceptional growth prospects which are in most cases already in the process of being implemented. “TerraSan’s strategic intent is to grow organically by expanding its abalone and mussel production facilities, improving the quality of the bulk fishmeal produced in order to command a higher price for exports and becoming the processing home for the smaller quota holders in the small pelagic fishing industry.”

As fishmeal is a major expenditure component for fish producers engaged in aquaculture based predominantly in the northern hemisphere and abalone is a highly sought-after delicacy in Asia, Sinclair says that EXEO Capital finds TerraSan attractive given EXEO’s emphasis on investing in companies focused on exports and import replacement, which most of TerraSan’s activities are focused on.

“Although substitute products such as soya meal, rapeseed oil, and even alternative proteins such as insects have been growing, most aquaculture products require fishmeal and fish oil in their diet, which will likely result in increasing prices of fishmeal and fish oil.”

EXEO Capital manages the $175m Agri-Vie Fund investing in TerraSan. This is a second Agri -Vie Fund, building on the success of its predecessor $100m Fund. The Fund’s deployment programme is gaining momentum with this, its first investment, and the investment team is also attending to a range of other imminent opportunities in Sub-Sahara Africa.


About EXEO Capital and Agri-Vie

EXEO Capital (www.exeocapital.com) is a pan- African, mid-market private equity investment manager with operations in nine countries in Sub-Sahara Africa. Operating from offices in Cape Town and Nairobi, EXEO Capital manages the Agri-Vie Funds I and II (www.agrivie.com), focused on the food & agri sector of the region since 2008. The firm tracks complementary growth investment opportunities in the region with a view to future investment platforms.

. EXEO is a financial service provider authorised by the Financial Services Board, Registration number 46251. For more information visit www.EXEOcapital.com .


1 February 2017: EXEO Capital, the pan-African private equity investment firm, has announced the first close of the second Agri-Vie Fund, focused on the food and agribusiness sector in Sub-Saharan Africa, after attracting commitments of over $100 million – one third more than the initial target.

Herman Marais, Managing Partner at EXEO Capital, commented: “This first close is building on the momentum of Agri-Vie Fund I, which is now in its realisation stage. Since inception in 2008, Agri-Vie has developed a proven track record in identifying strong performing food and agribusiness portfolio companies in Sub-Saharan Africa.” Fund I is invested in 12 portfolio companies across East and Southern Africa, including South Africa, Mozambique, Tanzania, Kenya, Rwanda, Uganda and Ethiopia, and has been “successfully unlocking value for investors while making a real and positive impact in the communities and regions it invests in,” he added.

“The first close of Fund II is a 33% over-subscription on the initial target, supported by a core of Fund I investors as well as new investors. The Fund will remain open for additional investors for another 12 months with a target of $150 million and a hard cap of $200 million,” he said.

Norfund – the Norwegian Investment Fund for Developing Countries – has been invested with Agri-Vie Fund I since 2010 and has worked closely with the management on establishing fund II. “Agri-Vie is an important partner for Norfund” says Norfund CEO Kjell Roland. “There is a considerable investment deficit in the food and agribusiness sector, and we are pleased to see that our investments in this sector also can help catalysing other private investors”, says Roland.

Agri-Vie invests across the broad food and agricultural sector, capitalising on the thriving African markets for processed food as well as export opportunities. Its portfolio companies include dairy, proteins (beef, poultry, aquaculture products and plant protein), condiments, fresh convenience foods, non-alcoholic beverages as well as food ingredients. The Fund, whose institutional investors come from Africa, Europe and North America, also invests in businesses specialising in agri-inputs such as seeds, plant nutrients, crop protection, and food logistics.

Patrick Mamathuba, Head of Alternative Investments at Stanlib Asset Management, a partner in EXEO Capital, commented: “The Agri-Vie Funds give investors an opportunity to participate in a diversified range of growth investment opportunities in the food and agricultural sector of the sub- continent.

“These opportunities are supported and driven by distinct structural factors and trends, which include rapid urbanisation leading to increasing demand for processed food products, large-scale import replacement opportunities in several of the countries where the Fund operates, as well as the availability of new technologies to enable precision farming and efficient agro-processing at lower risk,” explained Mamathuba.

EXEO Capital, which manages Agri-Vie Fund II, operates from offices in Cape Town, Nairobi and Mauritius and has representation in other major centres such as Johannesburg, Dar Es Salaam, Addis Ababa, Lusaka, Kampala, and Accra. Commenting on the organisational set-up, Marais said: “This strong local presence enables the investment team to understand local conditions and ensures that the best companies are selected for investment.

“By investing in middle to lower cap companies that have a successful track record and exceptional growth prospects, Agri-Vie plays an active shareholder role in its portfolio companies, supporting them to achieve growth and profitability targets,” he explained. “Our philosophy is to actively help to build the success of our investee businesses rather than being a passive investor.

“We also work actively with our partner companies to achieve their best development impact on local communities through employing and procuring locally as well as improving social infrastructure such as schools and clinics. The 12 portfolio companies of the Agri-Vie Fund I support more than 8,000 jobs in the communities where they operate. We also expect of our partner companies to join us in upholding internationally recognised standards of environmental and social governance.

“The establishment of Agri-Vie Fund II adds an important milestone to the momentum of institutional private equity investment in the food and agri sector of Sub-Sahara Africa. The first close of the Fund demonstrates increasing confidence among investors in the sector and region,” Marais concluded.


About EXEO Capital and Agri-Vie
EXEO CAPITAL – an Africa-focused private equity partnership – was formed in 2015 by the founders of Agri-Vie Investment Fund (www.agrivie.com) the African private equity fund focused on the food and agribusiness sector, and pan-African asset manager STANLIB (www.stanlib.com). EXEO is a financial service provider authorised by the Financial Services Board, Registration number 46251. Agri-Vie has been investing in the food & agri sector since 2008 and STANLIB, as a multi-specialist investment company, has a long-standing focus on alternative assets, including in areas such as infrastructure, real estate and private equity.
While presently focused on the food & agri sector, EXEO Capital intends, over time to address a broader range of geographical regions and industries, and to provide investors with opportunity to explore other mid-market private equity investment opportunities on the continent. For more information visit www.exeocapital.com.