XSML reaches hard cap for African Rivers Fund III

XSML, the fund manager active in Central and East Africa, announced it had reached the hard cap for its African Rivers Fund III (ARF III) at $85 million. ARF III is XSML’s third fund under management, after its maiden fund the Central Africa SME Fund (CASF) and its second fund, African Rivers Fund (ARF), bringing total assets under management to $159 million.

According to Barthout van Slingelandt, managing partner at XSML, “We have welcomed four new investors in our third fund and are excited that Swedfund, one of those new investors, increased its commitment in the first quarter of 2022, leading us to reach our hard cap.”

ARF III targets growing, well-managed small and medium-sized enterprises (SMEs) in the Central African region covering Angola, the Democratic Republic of Congo (DRC), Uganda and the Republic of Congo and surrounding countries. The fund is named after the two most powerful rivers in Africa, the Congo and Nile Rivers, which embody the potential of the Central and East African region.

ARF III follows the investment strategy of its predecessor funds, CASF and ARF, by providing debt, equity and mezzanine finance to fast-growing companies in these regions. The top up by Swedfund adds to investments already made by FISEA, managed by Proparco (the French development institution) DALHAP (private impact investor) and Norfund (the Norwegian development fund) and in the first close by BIO (Belgium Investment Company for Developing Countries), the Dutch Good Growth Fund (DGGF, managed by Triple Jump), FMO (the Dutch development bank), IFC (a member of the World Bank Group), Swedfund (Swedish development bank) and the SDG Frontier Fund (which includes nine private and institutional investors from Belgium).

Most investors in Fund III have invested in XSML’s earlier funds, but DALHAP, Norfund, Swedfund and SDG Frontier Fund are new investors, demonstrating commitment and support for investing in these frontier markets.

Van Slingelandt added: “We have been in full swing in the last 17 months to deploy capital and by the first quarter of this year, have committed over 55% of ARF III capital in 23 businesses. We see Swedfund’s top-up as a testimony of trust in our model, as we start to provide liquidity to our investors in ARF III in the coming quarters – very similar to what we have done with our predecessor funds. Through our local offices, including Luanda, Angola, which is on the verge of opening in Q2 2022, we continue to invest in local, private businesses to support economic growth and to create jobs.”

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