The Ontario Municipal Employees Retirement System, a Canadian pension fund and CI Investments among others have committed to invest $116m in Fairfax Africa, an investment holding company owned by Fairfax Financial Holdings.

The Canadian insurer has recently filed an amended prospectus with the securities regulatory authorities in Canada for an initial public offering of subordinate voting shares of Fairfax Africa.

Fairfax said in a statement that cornerstone investors have committed to subscribe for, on a private placement basis, approximately $116m of subordinate voting shares. 

The aggregate equity commitment by the cornerstone investors, together with Fairfax Financial, is up to approximately $416m.

Fairfax filed its preliminary prospectus just before Christmas last year.

Prem Watsa, Chairman of Fairfax Financial and Fairfax Africa, said the firm was excited to launch a new company focused purely on the growth potential of Africa and African businesses.

"We believe Africa will be transformed in the coming years by positive demographic trends led by a large emerging middle class, substantially improved political stability and governance, and increased integration with global markets - trends that are expected to underpin growth for many years.”

“Fairfax Africa, with our resources and expertise developed over several years of investing in Africa, will be well positioned to make significant long-term investments in businesses with experienced and ethical management teams,” he said.

Fairfax Africa will invest in public and private equity securities and debt instruments of African businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, Africa.

Subject to compliance with applicable law, investments will be made with a view of acquiring control or significant influence positions.

In addition to the IPO of subordinate voting shares, and as a condition to the closing of the offering, the Company will issue to Fairfax Financial, either directly, or to one or more of Fairfax Financial's subsidiaries, the lesser of (i) 30,000,000 multiple voting shares and (ii) 30% of the post-offering equity capital of the Company, on a private placement basis, in exchange for cash consideration from Fairfax Financial and the contribution by Fairfax Financial of its indirect interest in AFGRI.

Based in South Africa, AFGRI is an agricultural services and food processing company with a core focus on grain commodities. 

RBC Capital Markets is acting as global coordinator for the IPO in North America. 

Outside of Canada and the US, RBC Capital Markets, Citigroup and UBS are acting as joint global coordinators and bookrunners for the offering.

Fairfax is already active in Africa with several significant ownership stakes in several businesses. 

In addition, the Toronto-based firm owns Fairfax Africa Fund, a US based company investing in selected high performing sub-Saharan African countries with high growth potential. 

The Fund provides venture capital for start-ups and private equity for established businesses.

Its current investment portfolio includes a successful regional IT firm,  an export focused agro-industrial company and a pan-African mobile banking enterprise.