AfricInvest, a leading pan-African private equity firm, today announced the second close of FIVE, an evergreen platform for investing in financial institutions in Africa. Through its investments, FIVE aims to improve access to financial services for the growing African population, while achieving attractive financial returns for its investors.
Norfund, the Norwegian investment fund for developing countries; IFU, the Danish investment fund for developing countries; and Central Bank of Kenya Pension Fund, together, joined this investment round. FMO and BIO, the development finance institutions of the Netherlands and Belgium, respectively, anchored the fund as initial investors in December 2017.
The second closing brings FIVE’s total commitments to EUR61m. The fund is targeting a third closing in the next few months with the African Development Bank and other institutional investors that have already confirmed their commitment to FIVE. Subsequent closings will also take place over the next three to five years to reach the fund’s target size of EUR 200m.
“The new commitments of Norfund, IFU and CBK Pension Fund represent an important step in the life of FIVE. Each institution brings with them long and valuable experience investing in financial institutions in Africa. Their collective commitments will help support FIVE’s objective of universal access to financial services on the African continent, where the current banking penetration still remains below 20%,” said Mehdi Gharbi, Senior Partner at AfricInvest.
Erik Sandersen, EVP Financial Institutions in Norfund, added, “Norfund invests in financial institutions in developing countries to strengthen their ability to supply capital and financial services to micro-, small- and medium-sized companies. We appreciate the partnership with AfricInvest and believe that FIVE’s investments will contribute to increased financial inclusion and economic development in Sub Saharan Africa.”
“In Africa, many entrepreneurs – especially female – are prevented from improving their business and livelihood due to the lack of access to finance. By investing in FIVE, we have teamed up with an experienced and responsible partner that can promote financial inclusion and access to Immeuble Integra, Centre Urbain Nord, 1082 Tunis, Tunisia Tel: +216 71 189 800 - Fax +216 71 189 850 - RC : B12628202 - www.africinvest.com finance for African SMEs, which will help Africa to grow,” said Morten Elkjær, Vice President Finance Sector at IFU.
Erik Bosman, FIVE’s Supervisory Committee Chairman, commented, “This second close confirms that well-reputed investors see the financial sector in Africa as an attractive investment opportunity, both for its financial returns and its impact on society. FIVE’s aim of realizing universal access to financial services in Africa is one step closer to being accomplished. Together with the investors, the team will continue to work relentlessly on finding outstanding opportunities to deliver this promise. I am convinced FIVE will play an important role in the further development of the continent.”
About FIVE FIVE stands for Financial Inclusion Vehicle. The number five represents the aspiration of AfricInvest and FIVE’s investors to contribute to achieving universal access to financial services in Africa. As the current level of banking penetration on the continent is a mere 20%, achieving universal access will require a fivefold increase. Digital transformation is one of the key drivers toward the universal access and as such, FIVE seeks to enhance the digital strategies of its portfolio companies. FIVE has been designed to fully align the interests of investors and the manager. Its evergreen structure enables it to support its portfolio companies in achieving meaningful strategic transformations. Moreover, its permanent capital structure provides regulators and partners with the assurance that the fund has the capacity to make longer-term commitments. Appropriate liquidity provisions have been incorporated to allow investors to adjust their exposure to FIVE.
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