(Reuters) - Swiss private banking group Edmond de Rothschild (RLD.S) has raised $530 million for its first Africa-focused fund, the Financial Times reported on Sunday.

The fund, which will focus on making deals in Africa, will be managed by Amethis Finance - a company majority-owned by the Edmond de Rothschild, the paper said.

Luc Rigouzzo, founder and managing partner at Amethis, told the FT that the fund would target minority stakes in small to medium-sized companies.

The inflow of capital was pushing up prices of the larger deals and that was partly why Amethis would instead target minority stakes in small to medium-sized companies, Mr Rigouzzo, who grew up in Ivory Coast, said.

“Some funds may not invest all the money they raised,” he warned.

Wealthy families and entrepreneurs, who have committed about half the money to Amethis, have been quicker than institutional investors to see the appeal of investing in Africa. About three years ago, Ariane de Rothschild, Baron Benjamin’s wife, who lived in Kinshasa, the capital of Democratic Republic of Congo, gave a mandate to the bank to build an investment platform focusing on Africa, said Johnny El Hachem, chief executive of Compagnie Benjamin de Rothschild Conseil.

“We are looking for high-return projects but with a strong social development aspect,” Mr El Hachem said. “But we needed a team. We came across Luc and Laurent in 2011 and we decided to partner.”

Amethis, with about 20 staff and operating from Nairobi and Abidjan, has already invested in five companies including Kenya-based Chase Bank and Petro Ivoire, an Ivorian gas distributor.

After five years, investors will have the option to convert their stakes in the fund into shares of a company that could then float to gain permanent capital. This would allow them to keep investments over a long period, rather than having to sell them after five to six years.

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When your bank account is insured your criteria in selecting a bank change drastically. No longer are you worried about prudent financial management, but rather your aim is to maximize a sure bet. Since deposit insurance will pay you out whether your bank is liquid or not, you aim for the bank offering you the best bang for the buck. The lowest fees is a common criterion, as is the highest rate of return on the deposited funds. Banks compete on both these margins by taking on greater and more (hopefully) profitable risks. The problem arises when the risks don’t pay off, as was the case in 2007-08 when many bank investments turned sour.

The emerging economies of Brazil, Russia, India, China and South Africa, are a couple of days from agreeing the $100 billion BRICS development bank, as well as a $100 billion currency pool. It could challenge global lenders like the IMF and World Bank.

The bank will be called the New Development Bank, and will provide finance for infrastructure projects. Its creation will meet the needs of emerging and poorer economies according to Russian Finance Minister Anton Siluanov.