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AfDB takes leading role in raising funds for AFIG Fund-II, A Multinational Private Equity Fund
The Board of Directors of the African Development Bank (AfDB) approved on Wednesday, July 8, 2015 an equity investment of up to USD 45 million in Atlantic Coast Regional Fund LLC II (or “AFIG Fund II”), a 10-year USD 300 million multi-sector private equity fund that focuses on West, Central and East Africa, including transitional states and low/mid-income countries in that region. AFIG Fund-II is managed by the Advanced Finance and Investment Group (“AFIG Funds”), a Mauritius-registered limited liability company headquartered in Dakar, Senegal. AFIG’s investment team has over 42 years of combined experience in Africa. With this investment, AfDB is supplementing its earlier investment of USD 25 million in AFIG-I. This new investment is informed by the Fund’s performance to date and the development impact of its existing portfolio. As at date, AFIG Fund-I is fully committed and has begun exiting from initial investments. The Fund manager has developed a strong pipeline of over USD 400 million for potential new investments.
The AfDB Vice-President, Infrastructure, Private Sector and Regional Integration, Solomon Asamoah, highlighted that “the Bank’s notable support and lead role in the fundraising follows the exceptional initial and projected results that the Fund has managed to achieve in difficult markets. It has created a niche in strategic mid-capital industries and geographic segments where many other private equity funds are less visible.” AfDB’s financial contribution will enable AFIG Fund II to scale up its operations and thus its contribution to regional economic growth, poverty reduction, capital markets development, and regional integration.
Reacting to the Board’s approval, the CEO of AFIG Funds, Papa Madiaw Ndiaye, said, “We are pleased to receive the backing of the African Development Bank in AFIG Fund II, which is a strong signal of the Bank’s commitment to supporting indigenous African fund managers to catalyze growth and sustainable development across the African continent. This commitment is further illustration of the continued support by one of our key investors of our efforts to turn mid cap enterprises into the next African blue chips.”
The new investment will increase development impact and socio-economic benefits through the creation of an estimated 1,687 additional new jobs, development of local entrepreneurship, regional integration, and will create additional fiscal revenue to regional governments. The proposed investment is aligned with the AfDB’s Private Sector Operations Strategy to support entrepreneurship and is consistent with the Regional Integration Strategy of the target regions. AfDB’s lead role is catalytic in the provision of scarce capital to a largely underserved market, and will reassure other participating DFIs and provide comfort to minority African investors of the Fund.