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The institution also invested a further USD 15 million in select companies alongside the fund.
The International Finance Corporation (IFC) has invested USD 25 million in the Johannesburg-based Metier Capital Growth Fund III (MCGF III), along with a USD 15 million financial injection for select companies alongside the fund.
Metier Private Equity International is set to manage the fund, which will be split between eight and twelve mid-market businesses, predominantly across Southern and East Africa. The investment from the IFC will boost the fund to reach its first close, with the additional USD 15 million investment designed to attract further equity for its investee companies. Metier is keen to promote gender diversity across the fund manager and its investees, which the IFC has committed to supporting.
The fund is set to invest in sectors spanning fast moving consumer goods (FMCG), non-banking financial services, telecommunications, infrastructure, healthcare and energy. MCGF III has confirmed it will be investing at least 40% of its equity outside South Africa.
Metier CEO Paul Botha said in a statement: “Our active deal pipeline is characterised by growth capital investments that will develop new business opportunities that will have a positive impact on the effects of climate change, create decent jobs with a broader focus on gender-lens investing, support the connectivity of rural communities, and enhance small business development across Africa.”
The IFC said it aimed to display the commercial returns Africa is capable of providing to investors, as well as drive positive developmental impact across the continent. Africa currently comprises just 4% of all private equity investment globally, ranking lowest among emerging markets for such investment. The Africa Private Capital Association noted foreign exchange risk, economic uncertainty, high risk and inflation as hurdles to mid-market companies receiving equity financing.
IFC Africa vice president Sérgio Pimenta added: “A strong private sector is an essential driver for sustainable growth, job creation, market competitiveness and share prosperity. IFC’s investment in Metier Capital’s Growth Fund III will increase access to much needed private capital that will catalyse value creation for these companies and help bolster Africa’s private equity industry.”
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