Fairfax Africa, an investment holding company traded on the Toronto Stock Exchange, has entered into a definitive agreement with Helios for the combination of their complementary businesses on one unified platform.

The Helios Holdings Group will contribute certain economic streams (from the management and performance fees arising from current and future Helios funds) to Fairfax Africa in exchange for a 45.9% equity and voting interest in the pro forma share capital of Fairfax Africa.

Tope 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.”

Fairfax Financial will retain voting control of the combined entity.

On closing of the transaction, Fairfax Africa will be renamed Helios Fairfax Partners Corporation (HFP) and continue to be listed on the Toronto Stock Exchange.     

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 current CEO of Fairfax Africa, Michael Wilkerson, will become the Executive Vice Chairman of HFP.

Upon closing, Helios will be appointed sole investment adviser to HFP.

In addition, Helios will pursue the growth of its third-party investment advisory business in Africa-focused alternative assets, continuing to advise on its existing private equity and credit funds, with combined assets under management of over $3.6bn, and raising and deploying future funds in similar strategies and new initiatives.

The transaction will strengthen Helios’ third-party fund advisory capabilities by enabling greater investment flexibility and capacity, enhancing Helios’ position as a constructive and creative partner of choice for Africa.

HFP’s permanent capital base will support the launch of new third-party fund strategies and initiatives, leveraging Helios’ track record and expertise.

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.”

Completion of the transaction is expected to occur in the third quarter of this year, subject to customary conditions, including receipt of applicable regulatory approvals, the approval of the Toronto Stock Exchange, and approval by shareholders.