Vantage Capital, a Pan-African mezzanine fund manager with over R5bn ($420m) of AUM, and the Dutch development bank FMO have exited their R220m ($32m) investment in Safripol, Southern Africa’s plastic polymer manufacturer.

In July 2007, Vantage and FMO funded Thebe Investment Corporation to acquire a stake in Safripol.

Vantage provided mezzanine finance in the form of preference shares and exited with more than 2x returns, according to Luc Albinski, Managing Partner at Vantage Capital.

“We were refinanced out with RMB and Sanlam Capital Markets, providing senior debt to take us out and Thebe using its own funds,” Albinski told Africa Global Funds.

Thebe, one of South Africa’s most prominent black economic empowerment investment companies, has played an active role as empowerment partner to Safripol and retains its stake in the company.

Safripol is the only manufacturer of high-density polyethylene in South Africa and the second biggest supplier of polypropylene after Sasol.

“Our funding helped Safripol meet its black empowerment targets in its new guise as a stand-alone corporate in the chemicals sector. Previously Safripol had been a division of the South African subsidiary of Dow Chemicals,” said Albinski.

Johnny Jones, Associate Partner at Vantage, added: “We have enjoyed being a partner to Safripol and commend the company for continually improving its manufacturing processes and environmental standards whilst delivering the highest quality products and service to its customers.”

“The investment in Safripol illustrates how Vantage’s mezzanine funding can support broad-based empowerment transactions,” he said.

The Vantage Mezzanine Fund I, which closed in 2007, raised R1bn and invested in five firms: York Timbers, Primedia, Safripol, Masivumeni and Tsebo.

Vantage has successfully exited 80% of the investments made in their first mezzanine fund.

The previous divestments include: Tsebo, Primedia and York Timbers.

The Vantage Mezzanine Fund II, which closed in March 2012, raised R1.9bn and is more than 80% invested.

Albinski said that two more exits are in the works for Fund II.

Currently, Vantage is fundraising for its third mezzanine fund, targeting $250m from South African and Southern African pension funds.

The Fund III is targeted to close by the first quarter of 2015.

The Fund III will be sector agnostic and will invest between $5m and $30m in established mid-market companies in South Africa (50%) and the rest of Africa (50%).

The key markets for Vantage in East Africa are Ethiopia, Kenya, Uganda and Tanzania; in Southern Africa – Zambia, Botswana, Namibia and Mozambique; and in West Africa – Nigeria, Ghana and Senegal.