Toronto-based Fairfax Financial Holdings is seeing ‘muted interest’ in its latest investment fund – with the insurer expected to raise just half of its original goal, according to reports.
Fairfax sought to raise as much as $1 billion at $10 a share for its new African investment fund, Fairfax Africa Holdings Corp., in an initial public offering on the Toronto Stock Exchange.
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But the firm is now expecting to raise around $500 million, according to people familiar with the matter,
Bloomberg reported.
Fairfax said it had secured commitments of up to $416 million for the fund, from both its own funds and partners including the Ontario Municipal Employees Retirement System, a Canadian pension fund and CI Investments Inc., according to a regulatory filing in December.
But investor interest in the fund proved weaker than expected, because of political and economic uncertainty in the region, according to the report.
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The insurer’s African venture comes two years after it raised more than $1 billion for Fairfax India Holdings Corp., its first region-focused public fund.
The new fund follows six investments it made in Africa, according to the December filing.
Fairfax Africa will invest in private and public equity, as well as the debt of companies operating on the continent, with a view to acquiring control or significant positions, a Fairfax statement announcing the fund’s launch said.
Fairfax chairman and CEO, Prem Watsa has said that the African IPO will be transformed by an emerging middle class, improved political stability and governance, and increased integration with global markets.
The total investment levels in Fairfax Africa may change when the order book closes, the report said.
Fairfax had not responded to the report at the time of publishing.
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