IFC commits $25m to Africa-focused mezzanine fund
Amid growing demand for funding for Africa’s underserved medium-sized companies, the IFC announced an investment in a new mezzanine fund managed by Vantage Capital.
The IFC’s $25 million investment in the Vantage Mezzanine IV pan-Africa fund will support companies based in Kenya, Nigeria, Morocco, Egypt and other countries across Africa engaged in job-creating sectors, including healthcare, tourism, manufacturing, information and communications technology (ICT) and telecommunications.
This is IFC’s first investment in an Africa-focused mezzanine fund, which will provide growth capital that sits between senior debt and equity and has both debt and equity features. Vantage Capital aims to raise a total of $350 million for the fund.
”Vantage is proud to have achieved a successful first closing of our fourth fund, which is a validation of the mezzanine asset class in Africa and our role as a pioneer of this form of finance on the continent over the past 15 years. IFC’s investment in a fund like ours represents a boost to this important alternative source of growth capital for mid-sized African businesses,” said Warren van der Merwe, managing partner of Vantage.
”Vantage Mezzanine IV will play an important role in providing underserved mid-sized companies with an alternative form of growth capital in the nascent private credit and mezzanine financing space in Africa,” said Kevin Njiraini, IFC’s regional director for Southern Africa and Nigeria. ”The Covid-19 pandemic has made this type of financing more necessary and important, as banks are becoming increasingly risk-averse, often preferring to lend to larger corporates.”
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