Fairfax to merge Africa division with Helios

Property/casualty re/insurer Fairfax Financial Holdings has agreed to merge Fairfax Africa Holdings Corporation, an investment holding company traded on the Toronto Stock Exchange, with Africa-focused private investment firm Helios Holdings Group.

The new entity will be known as Helios Fairfax Partners Corporation (HFP), while Fairfax will retain voting control of the combined entity. Under the terms of the deal, Helios will exchange 45.9 percent equity and voting interest in the pro forma share capital of Fairfax Africa.

Tope Lawani and Babatunde Soyoye, the co-founders and managing partners of Helios Investment Partners, the investment advisor to the Helios funds, will be appointed as co-chief executive officers of HFP.

The deal aims to create a large Pan Africa-focused alternative investment manager with enhanced cashflow and liquidity profiles. HFP will continue to be publicly-listed and will represent an "attractive investment vehicle offering exposure to high-quality investments in African markets".

The new company will also have access to diversified revenue streams from both recurring and predictable asset management fees and carried interest income from third-party funds under management as well as capital gains from the appreciation of its proprietary capital. HFP’s permanent capital base will support the launch of new third-party fund strategies and initiatives.

Prem Watsa, chairman and CEO of Fairfax Financial Holdings, said: “We are excited to partner with Tope and Babatunde in establishing Helios Fairfax Partners. They have an outstanding track record in investing in Africa over the past 15 years. Our cultures are very similar and Tope and Babatunde, with our support, aim to establish the pre-eminent investment vehicle for Africa in the years to come. We believe this partnership will be good for Africa, the shareholders of Fairfax Africa and Helios and the employees of both organizations.”

Michael Wilkerson, CEO of Fairfax Africa, added: “This combination creates the pre-eminent pan-African investment platform, bringing together the complementary strengths of our respective expertise, cultures and people, in an attractive permanent capital vehicle. We are very pleased to partner with Tope, Babatunde and the entire Helios team, and look forward to working together to build sustainable value for our shareholders over time.”

Lawani, co-founder and managing partner of Helios Investment Partners, said: “We are proud to be partnering with Fairfax Financial and Prem Watsa on this next step of Helios’ development. The combination leverages our mutual strengths and enables us to provide public market investors with unique access to a differentiated set of investment opportunities on the African continent, as we have been doing for our partners in our private funds. This will strengthen our ability to deliver on our mission to generate globally competitive investment returns and create positive socioeconomic development outcomes for Africa by building profitable, value-creating and socially responsible businesses.”