FMO is pleased to announce the launch of the first dedicated African credit and debt capital markets fund of its kind globally in which FMO is an anchor investor. The Investec Africa Credit Opportunities Fund 1 is a dedicated closed-ended fund aiming to raise USD 350 million.
The fund aims to provide growth capital to African companies, thus offering an alternative to traditional bank funding, encouraging growth and employment, and fuelling the long-term development of Africa's debt capital markets. This is done by landmark investments from both FMO and CDC, the UK's Development Finance Institution. FMO sees development capital allocating specifically to African debt capital markets in order to achieve its dual aims of development and return.
"Magchiel Groot, Senior Investment Officer Private Equity at FMO, said, "FMO is particularly proud to be an anchor investor, to highlight the Africa opportunity and ultimately facilitate the raising of up to USD 350 million for the deployment of debt capital markets in Sub-Sahara Africa. As other African investors are assessing the fund, Investec Asset Management, FMO and CDC have been instrumental in making this largely South - South connection possible for the development of debt capital markets in Sub-Sahara Africa. This is a great example of Africa empowering and funding the growth of Africa".
The fund, managed by Investec Asset Management's South Africa and Frontier Credit team, has been designed with the aim of giving investors high yields, the ability to access the African public and private markets across all sectors, USD exposure and lower volatility than other risk assets.
Over an 8.5 year term the fund will look to deliver its dual aims of both development and return, primarily through investment in a diversified portfolio of corporate debt. The investment approach aims to provide access to the broadest opportunity set available, locking in high yields and capital appreciation. Risk is minimised through sector, country and counterparty diversification.
FMO and CDC have committed USD 60 million to the fund. Other global institutional investors have shown strong appetite for the fund.