Syntaxis Africa, Afrinvest partner on ₦12 bln private equity fund for SMEs
Syntaxis Capital Africa has partnered with Afrinvest Asset Management Limited to launch a ₦12 billion private equity fund, designed to meet the funding needs of Small and Medium Enterprises (SMEs) in the country including selected countries in Sub-Saharan Africa.
The growth fund would cover a variety of sectors including manufacturing, agri-processing, healthcare, education and non-banking financial services.
The launch in Abuja recently, was witnessed by key capital market stakeholders including the acting Director General, Securities and Exchange Commission (SEC) Mary Uduk.
Speaking at the ceremony in Abuja, Group Managing Director of Afrinvest, Ike Chioke, stressed that the focus of the fund was on deepening and widening financing alternatives for SMEs by providing patient capital.
He said the fund provides a viable option for SMEs looking for sustainable growth capital.
Also, Partner and Managing Director, Syntaxis Capital Africa, Adesuwa Okunbo while delivering the keynote address said: “We see the fund as a vehicle for rapid economic growth and development in the countries we invest in. By providing not only access to patient growth capital to SMEs, but also combining that with capacity building and operational expertise, we are giving businesses the ability to scale their activities, which will in turn will increase productivity, create new jobs and generate taxes for the government.”
She added: “In addition, being one of the few private equity funds led by a Nigerian woman, the fund has a unique focus on investing with a gender lens strategy, using our capital to influence and enhance gender equality throughout our portfolio companies, improving the ratio of women in the workforce, board and value chain, which we believe will enhance financial returns for our companies and thus investors, whilst improving the society and economy simultaneously.”
Furthermore, the Managing Director, Afrinvest Asset Management, Ola Belgore, explained that the fund had been constructed as a portfolio of cash-generative African private equity investments diversified by sector and geography.
He said qualified investors can expect high level of contractual income combined with significant minority equity stakes, superior risk adjusted returns, strong equity upside, and capital preservation.
Syntaxis Capital Africa, which is the sponsor of the fund, has team members with a 30-year track record of successfully managing private equity funds with experienced local teams, having raised up to US$300 million from global institutional investors and deploying successful private equity funds in other emerging markets.
Similarly, frinvest, which is the fund manager, is licenced by SEC as a portfolio manager with several listed funds including the Nigeria International Debt Fund as well as the Afrinvest Equity Fund.
According to the World Bank, SMEs contribute up to 60 per cent of employment opportunities and up to 40 per cent to the national Gross Domestic Product (GDP), yet access to funding remained a critical drag on the performance of many of these businesses.
According to Afrivest, “without access to patient funding, many of these businesses will struggle to stay afloat”, thus the need to bridge financing gap for SMEs in the country.