The rapid growth of private equity in Africa will be underlined today as Kingdom Zephyr announces it has raised $325m for its latest pan-African buy-out fund with the backing from Prince Alwaleed Bin Talal, the Saudi billionaire. Africa accounts for only a tiny proportions of the global private equity market and remains a no-go zone for many of the biggest US and European buy-out groups.

However, the fundraising by Kingdom Zephyr highlights how- in spite of occasional setbacks such as Kenya and Zimbabwe-the spread of stable democracy and rapid economic growth is encouraging the rise of private equity across the continent. Private capital flows to sub-sharan Africa, including foreign direct investments portfolio flows and loans, reached $53bn last year, a four-fold increase since 2000,according to the International Monetary Fund.

Kingdom Zephyr, which has offices in Accra, Johannesburg, New York and London, invest in mid-sized African companies that are expanding across borders and have the potential to become regional market leaders.Price Alwaleed, whose Riyadh-based Kingdom Holding owns big stakes in Citi-group and News Corporation, has agreed to provide half the funds for Kingdom Zephyr, which aims to raise $500m for its latest fund. This would more than triple the $122.5m it raised after its creation in 2003 as a joint venture between the Saudi prince and Zephyr Management, a New York asset manager that also has funds in Mexico, India and for US distressed debt.

Kingdom Zephyr's best known investment so far was a small stake Celtel, the Pan-African mobile phone operator that became the poster child for private equity on the continent when it was sold to MTC of Kuwait for $3.36bn in 2005. It has also invested in financial services, such as United Bank for Africa, a Nigerian bank that is the 13th.

Largest in Africa, and Micro Provident, a Botswana-based consumer lender that operates in UgandaTanzania, Zambia and Swaziland. What is happening in Africa, which has been largely unnoticed by the rest of the world, is that consumption patterns are changing rapidly according to the Managing Partner of Kingdom Zephyr. This reflects a growing middle class in most countries, the effect of globalization, rising disposable incomes and significantly improved communication channels, primarily mobile phones, television and the internet. The commodities boom, driven by fast growing demand from Asia, was also driving rapid economic growth in Africa.

The democratic governance and economic evolution is progressing quite nicely in Africa, with few occasional exceptions. According to Kingdom Zephyr each of their investments will have country diversification within their own operations, so it will not be too negatively affected by developments in any one country. Kingdom Zephyr, which has tripled its investment on the continent in its first two exits, and ha raised money for its new fund from wealthy US families, the World Bank's International Finance Corporation and the Development Bank of South Africa. (Courtesy of the Financial Times)

Business fraud on rise amid credit crunch

Fraud in UK business mounted in the first half of the year as the economy grappled with the fallout from the credit crunch.

Fraud cost UK businesses more than 705 million Pound Sterling in the last six months, a 74% increase over the same period last year, according to a report released today by the accountants BDO Stoy Hayward.

Finance and insurance sectors were worst hit, with reported fraud costing 636 Million Pound Sterling more than 90% of total reported fraud and a 15-fold increase on the first six months of 2007. The problem could get bigger still, as, the report warned. What is really scary is that these figures do not even include losses that may have been incurred by rogue traders according to Simon Bevan, head of Fraud Services at BDO Stoy Hayward. When you add in the fraud that is not yet been uncovered, or which businesses have discovered but do not wish to expose, the real cost to UK industry could be much, much higher.

Mr. Bevan warned the problem of business fraud was certain to grow. Senior executives at British businesses are becoming increasingly concerned about fraud risk as the credit crunch bites. The warning came as the latest Financial Services Survey from the CBI and PricewaterhouseCoopers showed the effect of the credit crunch on the sector had worsened in the last three months. (Courtesy of the Financial Times)