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Actis raises US$2.9bn for emerging markets

Actis, the emerging markets private equity investor, has closed its latest global fund, Actis Emerging Markets 3 (AEM3) raising US$2.9bn of capital, well in excess of its original target of US$2.5bn.

London-headquartered Actis said that the fund included commitments from more than 100 investors across the globe. CDC Group, a UK government-backed emerging markets fund, has previously committed capital to Actis funds, including three dedicated to China. Actis was spun out of CDC in 2004.

The firm added that the fund was one of the largest dedicated to private equity investment in emerging markets to close this year and was double the amount previously raised by Actis in 2004.

AEM3 will be deployed in 30 to 40 investments across Africa, China, India, Latin America and South East Asia, with typical deals involving a minimum of US$50m of equity capital in buyout and growth transactions.

“We believe that underlying economic growth remains resilient in many of the emerging markets,” said Paul Fletcher, senior partner at Actis. “Much of this growth can be linked to businesses benefiting from consumer demand and increased investment in domestic infrastructure.”

In November, Actis acquired a majority stake in Chinese hot pot chain Xiabu Xiabu, which currently operates 53 sites in Beijing, for US$50m.

Actis has been active in China for more than eight years and the Xiabu Xiabu deal followed a US$65m investment in budget hotel business 7 Days Inn Group and US$105m in education service provider Ambow Education, both in October. In May, Actis sold Chinese solar power supplier Shunda to former portfolio company Suntech.

One of the largest deals Actis has been involved in this year was the US$700m buyout of Alstom South Africa, an electrical engineering, manufacturing, distribution and contracting business. Actis led a consortium including Old Mutual Investment Group and existing Black Economic Empowerment partners Kagiso and Tiso.