Canadian insurer Fairfax said to raise about $500M for new Africa fund

Prem Watsa’s Fairfax Financial Holdings Ltd. is expected to raise about $500 million for its new African investment fund, according to people familiar with the matter.

The Toronto-based insurer sought to raise as much as $1 billion at $10 a share for Fairfax Africa Holdings Corp. in an initial public offering on the Toronto Stock Exchange, according to a regulatory filing in December. Fairfax said it had secured as much as $416 million in commitments for the African venture from both its own funds and partners, including the Ontario Municipal Employees Retirement System, a Canadian pension fund and CI Investments Inc., according to the filing.

The order book was expected to officially close on Monday, and the total might have changed as more orders were recorded through the day, the people said, asking not to be identified as the details aren’t public.

A representative for Fairfax was not immediately available for comment.

Fairfax Africa is the insurer’s second public fund focused on a specific region. In January 2015, Fairfax raised more than $1 billion for Fairfax India Holdings Corp., including $500 million in commitments from its own funds and other cornerstone investors.

The new African fund will invest in private and public equity as well as debt of companies operating on the continent, with a view to acquiring control or significant positions, Fairfax said in a statement in December announcing its launch.

Fairfax has made six investments in Africa, according to the regulatory filing. The company acquired a 7.4 percent stake in Commercial International Bank Egypt SAE from Actis LLP for $330 million in May 2014, the filing shows. It also made investments in agricultural company Afgri Operations Ltd., Africa Re, APR Energy and others, the company said.

Watsa said in a statement announcing the IPO that Africa will be transformed in the coming years by an emerging middle class, improved political stability and governance, and increased integration with global markets.

RBC Capital Markets led the share sale.