Ethiopia's first equity fund

For a decade the Ethiopian economy has grown at 10 per cent annually on average, becoming the largest economy of eastern Africa. Nonetheless, its private sector and especially companies with strong growth potential are being held back by a severe shortage of capital. Ethiopia’s private equity market is extremely underdeveloped in proportion to the size of its economy. The country’s reputation has been traditionally poor amongst foreign investors.

The country’s first private equity fund, the Schulze Global Ethiopia Growth and Transformation Fund I (EGTF), was established in 2013 to amend the situation. It was established by Schulze Global Investments, a private management company mainly owned by the American Schulze family.

Alongside the Schulze family, EGTF’s subscribers include Finnfund and other European development finance institutions as well as private investors. The fund is investing in Ethiopian SMEs in the fields of agriculture, agri-processing, healthcare, real estate, education, manufacturing, and ecotourism.

Schulze Global Investments has worked hard to lay the basis for an Ethiopian private equity fund. Almost all of the investment team are Ethiopians; half of its employees, including the head of the investment team, are women.

The launch of the fund will support the establishment of Ethiopia’s private equity market, promote entrepreneurial activity and create jobs. Its operations are likely to attract other private equity funds and foreign direct investments into the country, increasing competition and capital availability, to the benefit of local companies and, ultimately, consumers and employees.

Ethiopia is a long-term partner country of Finnish development cooperation.