Investec Asset Management has announced the final close of the Investec Africa Credit Opportunities Fund 1 at $226.5m, below its initial target of $350m.

John Green, Global Head of Client Group, Investec Asset Management, said the Fund is the first dedicated African credit and debt capital markets fund of its kind globally.

“It aims to provide growth capital to African companies, thus offering an alternative to traditional bank funding, encouraging growth and employment, and fuelling the long-term development of Africa’s debt capital markets,” he said.

The investor-base includes insurance funds, pension funds, fund of funds, endowments and development finance institutions.

The Dutch development bank, FMO, and the UK’s Development Finance Agency, CDC, played an instrumental role in anchoring the fund.

Investec Africa Credit Opportunities Fund 1 is a sector-agnostic debt fund that invests in a range of credit opportunities in Sub-Saharan Africa.

The Fund has a pioneering focus of anchoring new issuances of debt, and aims at constructing a portfolio of approximately 30 loans and bonds to companies across Sub-Saharan Africa.

The Fund is managed by Investec Asset Management’s South Africa and Frontier Credit team, which pioneered the development of this asset class in Africa back in 2008.

It is designed with the aim of giving investors high yields, the ability to access the African public and private markets across all sectors, US Dollar exposure and lower volatility than other risk assets.

The Fund’s strategy has three main aims – to develop and catalyze the development of African debt capital markets; to generate a high running yield and capital gains from investing in African credit opportunities; and to invest in sustainable businesses that have a high standard in managing ESG risks.

The Investec Fund will typically provide capital to businesses and projects which already support local employment, enabling access to longer term funding to companies than is typically available in the market.

Steven Loubser, Portfolio Manager at Investec Asset Management, said: “We believe we are backing the future champions in their industries across the continent. The large demand for funding on the continent and the lack of dedicated African credit funds should provide a strong investment backdrop, with credit providing an excellent entry point into the long-term African growth story.”

“We are very well positioned to take advantage of these opportunities with our extensive experience of investing in emerging markets, underpinned by our heritage giving us deep insight into the drivers of African markets,” he added.