April 3, 2014


Private equity and venture capital firms that are now entering the African markets are venturing boldly to a sector where most multinational health-related goods and services providers and manufacturers had tread cautiously, a decade or more ago: Healthcare industry.

The African healthcare industry—once forgotten and often considered to be too destitute to bet on by investors looking for good returns, thereby relegated to be rescued by donors and grants from charitable organizations—has become a deal playground for U.S., Asian and European firms looking for their slice of Africa.

According to analysts familiar with the matter, so far this year alone at least 10 or more major healthcare industry related deals with a combined value of more than $5 billion have been injected to the continent and the competitions seem to be heating up quickly as investors continue to rapidly snatch-up deals.

Swedish government-owned venture capital company, Swedfund and the Abraaj Group are the latest firms to team up to invest in the continent’s healthcare sector revitalization.

The companies, through Abraaj Group’s Africa Health Fund, have invested $6.5 million in Nairobi Women’s Hospital, an East African private healthcare provider for women and their families in the region.

Billed as the largest single foreign direct equity investment in private healthcare in Kenya this year, the funds will provide the hospital with the capital it needs to complete its hospitals and medical centers modernization and expansion plan in East Africa, which in turn will increase the range of treatments and services offered to patients in the region.

Since its establishment in 2001, the Nairobi Women’s Hospital has grown from one branch and now has three additional hospitals and two medical centers. Two of the center are undergoing construction and are part of the hospital’s grand plan to expand further in the country and the Eastern African region by 2016 and subsequently into the rest of Africa.

In 2011, the Nairobi Women’s Hospital Medical Training College established one of the nursing schools in the country to help address the shortage of quality health workers in East Africa.

This is the second contribution the Africa Health Fund has made to the hospital. In 2010, the then newly formed fund invested $2.6 million in the hospital.

This latest equity injection demonstrates the fund’s continued confidence and commitment to Africa’s healthcare as well as Kenya’s economy.

The deal also brings in line a unique synergy of the firms’ and the hospital’s visions:

The Swedfund, which is wholly owned by the Swedish government to supports private enterprise in developing countries through equity investments and loans to companies, has a portfolio that includes holdings in about 70 companies around the world, with a high emphasis on environmental, social and governance issues.

As a pioneer in women’s health in East and Central Africa, the Nairobi Women’s Hospital for the past twelve years has provided quality and affordable healthcare to patients including specialized services such as breast cancer detection and surgery, and through its Gender Violence Recovery Centre, chaired by renowned Hon. Njoki Ndung’u, offers free medical and psychosocial support to rape survivors and domestic violence victims in the region.

The Africa Health Fund was established to provide equity that will help increase access to quality and affordable health-related goods and services for Africans, especially those at the bottom of the income pyramid. At the same time, it hopes to provide investors with good long-term financial returns.



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