VANTAGE MEZZANINE FUND IV

Promoter – Financial Intermediary

VANTAGE MEZZANINE IV PAN AFRICA (PTY) LTD

Location

• Regional - Africa

Description

The operation is an equity participation in Vantage Mezzanine Fund IV, a generalist closed-end fund providing mezzanine finance to small and medium-sized enterprises (SMEs) and mid-market growth companies active in Africa.

Additionality and Impact

The operations concerns an investment in Vantage Mezzanine Fund IV - a USD 350m fund, providing mezzanine solutions to SMEs and mid-market companies in Africa.

The EIB investment will support a pioneering mezzanine player in Africa, which will provide much needed growth capital to finance the expansion and development of SMEs and mid-market companies. The investment addresses identified market gaps in terms of access to finance for enterprises, institutionalisation of governance and sustainable growth of businesses as well as development of the sophisticated mezzanine asset class and supporting employment and creation of new jobs. The proposal is in line with the EU priorities in supporting private sector development and job creation and it fits with the goals of African Union's Agenda 2063 in supporting an inclusive growth and sustainable development, via economic resilience and diversification.

 

The Fund will support the companies in expanding their business and strategic operations, particularly in developing from national to regional champions and their cross-country operations. The tailor-made financing solutions provided by the Fund address the specific financing requirements of portfolio companies and ensure they have access to risk-financing to implement entrepreneurial projects and regional expansion. The financing provided by the Fund, while directly benefiting the targeted investees, also supports a broad range of auxiliary businesses and service providers, contributing to sustainable growth and development of local economies.

 

The Bank is viewed as key supporter of the Fund Manager's pan-African investment strategy and the continuous support of EIB in this Fund is a validation to the investment strategy of the Fund Manager and the sustainable operation of Vantage. Investment in the Fund provides a signalling effect to investors in supporting mezzanine financing across Africa and has ensured that the Fund is able to raise capital from institutional and private investors in order to reach its target size and fully execute its investment strategy. The EIB investment directly benefits the local communities and enterprises that have been affected by the volatile economic conditions in Africa, limited access to delays in governance improvements and institutionalisation. The established ESG practices of the Fund Manager, with the support of the Bank, ensure that impact and social development are implemented according to best practices.

 

The involvement of the Bank will ensure that terms and governance of project will be in line with market practice and will further support the growth and expansion across Africa of SMEs and mid-market companies, including creation of new jobs, youth employment and improvement of working conditions and employees well-being. 

Objectives

Vantage Mezzanine Fund IV is a generalist-sector fund providing growth financing to SMEs and mid-market companies active in Africa. The fund will seek to support companies with experienced management teams, stable market positioning and strong growth potential. The operation will support the development of the private sector by increasing access to finance, reducing unemployment and attracting private and institutional investors to the region.

Sector(s)

• Services - Financial and insurance activities

Proposed EIB finance (Approximate amount)

USD 50 million (EUR 50 million)

Total cost (Approximate amount)

USD 350 million (EUR 349 million)

Environmental aspects

The fund will comply with the Environmental and Social policies of the Bank.

Procurement

The fund will comply with the procurement policies of the Bank.

Status

Signed - 9/12/2022