Baobab, a financial services group with a significant loan portfolio, has completed the full acquisition of its local subsidiary, Boabab Nigeria. This acquisition marks the first successful exit for Alitheia Capital and Goodwell Investments from their jointly managed fund. The acquisition has resulted in a 3x return on investment for uMunthu Fund, showcasing a 39.3% internal rate of return.
Private capital exits in Africa have shown a decline, with only 43 exits recorded in 2023, down by 48% from the peak in 2022. Despite this trend, Baobab Nigeria has seen substantial growth since the initial investment, expanding to 38 branches across 16 states and significantly increasing its customer base. The bank focuses on financial inclusion by catering to individuals and small businesses in underserved areas.
The success of Boabab Nigeria is attributed to local governance expertise, financial advice, market insights, and network access provided by uMunthu. The exit signifies the positive outcomes of patient capital investments and the potential for impactful returns in the region.
With Africa’s exits lagging behind other markets, such as Asia, there is a need to attract foreign capital by demonstrating strong returns. The growth and stability achieved by Baobab Nigeria underscore the effectiveness of patient capital in driving both financial and impactful results.