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CDC backs two mezzanine funds

Anna Lyudvig
Sept. 17, 2021, 3:37 p.m.
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CDC Group under its African Private Credit Fund Strategy has committed $30m to Vantage Mezzanine Fund IV and $30m to BluePeak Private Capital Fund I.

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CDC Group under its African Private Credit Fund Strategy has committed $30m to Vantage Mezzanine Fund IV and $30m to BluePeak Private Capital Fund I.

The new commitments will enable the fund managers to increase credit supply to mid-market African companies by providing countercyclical mezzanine funding that is bespoke and meets the market need.

Clarisa De Franco (pictured), Managing Director & Head of Private Equity Funds, CDC said: "We are proud to have made our first investments executed under CDC's African Private Credit Funds Strategy. Our partnerships with Vantage Capital and BluePeak Private Capital support underserved businesses at a critical time.”

“The investments are a testament to CDC's pledge to play an anchoring role in the success and scale of Africa's mid-sized companies through different instruments. In addition, we are confident that our partners will steward their investee firms to onward growth, generating favourable returns that will motivate commercial investors to invest in Africa's nascent private credit market as we observe its rise as a promising asset class.”

CDC’s African Private Credit Fund Strategy aims to address a significant credit market dislocation and mid-market financing gap, a situation intensified by the Covid-19 crisis.

It also aims to have a signalling effect by attracting more commercial investors to African markets which will in turn help to develop reliable, long-term private debt platforms that can facilitate economic growth, employment and sustainable development throughout the continent.

The investments contribute to the UN Sustainable Development Goal Decent Work and Economic Growth (SDG 8).

Jo Fry, Investment Director and Head of Intermediated Credit, CDC said that investments in Vantage Capital and BluePeak Private Capital present an opportunity to get capital to where it is most needed. “Businesses in Africa often face significant challenges in gaining access to funding and the pandemic has further tightened the availability of capital in these markets. We are excited to be supporting the continuing development of the private credit [fund] sector.  This can fill a funding gap with debt capital for medium-sized enterprises whose financing needs are of a size that excludes them from accessing credit from traditional banks,” he said.

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