Vantage Capital, Africa’s largest mezzanine fund manager, has announced the successful first close on its fourth mezzanine fund at $207m.

The investors in the fund include European and US-based commercial investors as well as development finance institutions (DFIs), including the IFC, CDC Group and SIFEM.

Vantage Mezzanine Fund IV is on track to reach its target total fund size of $350m.

Warren van der Merwe, Managing Partner at Vantage Capital, said: “Vantage is proud of the continued support received from its investors. We were the first independent mezzanine fund in South Africa when we raised Fund I in 2006. Mezzanine was not well known in South Africa at that time, let alone in the rest of Africa. Since then, we have taken our mezzanine product across Africa to 15 target markets, having invested in 11 of them.”

“Our fundraising success, in such a challenging environment, is a validation of the mezzanine asset class in Africa and of our role as a pioneer in this space over the past 15 years. As with previous funds, most of the funds have been raised from private sector investors such as insurers, pension funds and endowments who find our contractual yields and equity upside exposure attractive when compared to private equity alternatives. We have also received valuable support from DFI investors, namely the IFC, CDC Group and SIFEM, who appreciate the impact that mezzanine can have in growing mid-sized African enterprises.”

The fund will provide mid-sized African businesses with flexible capital that will enhance job creation and facilitate much-needed economic opportunities and growth – especially necessary for post-Covid-19 recovery.

Since 2006, Vantage Capital’s Mezzanine division has made 31 investments across three funds into 11 African countries, making it the largest and most experienced independent mezzanine funder on the continent.

“Vantage Capital’s mezzanine offering plays an important role in supporting the growth of mid-size businesses that would otherwise struggle to access capital through conventional banking channels”, commented Luc Albinski, Executive Chairman.

“Vantage’s non-dilutive funding enables business owners to retain control and hold on to their equity, while at the same time accessing the capital needed to realise their full potential. This, in turn, plays an important role in driving economic growth, job creation and improved prosperity.”