Types of capital
We provide the flexible long-term investment that many businesses in developing countries need to grow. This capital is provided in three broad ways: direct equity, intermediated equity, and debt. We also work in partnership with other development finance institutions and can complement an existing deal.
Here, we break down these three types of investment to outline what we provide.
We’ve been providing equity to businesses in Africa for 70 years. While we occasionally acquire controlling stakes, we typically take influential minority positions that allow us to work with shareholders and management, adding value in a positive and professional way.
Our equity investment teams work across our priority sectors: financial services, infrastructure, health, manufacturing, food and agriculture, construction and real estate, and education.
- Ticket size: $10 million – $150 million
We provide debt to businesses and projects in our priority sectors in four ways: project finance, corporate lending, trade finance, and lending to financial institutions.
Our team has significant experience in power, transport, and telecommunications infrastructure. Our patient, long-term approach means we’re able to provide tenors of up to 18 years.
Within corporate debt, we provide a range of debt instruments, including senior secured loans, mezzanine or promoter financing structures, and funded and unfunded guarantees. We are flexible on the length of tenor and open-minded when confronted with credit challenges.
Our trade finance investments are typically risk-sharing facilities with regional banks to increase liquidity and/or reduce capital costs.
Financial institutions lending
We lend directly to financial institutions. This provides ‘Tier 2’ capital in markets where local lenders provide only a limited amount of this type of investment.
- Ticket size: $20 million – $100 million
We invest in investment funds across our priority sectors in Africa and South Asia. We invest in country-focused funds, as well as those operating across regions.
As Africa’s largest limited partner, we support almost 70 funds operating in over 30 countries on the continent. We have a strong presence in South Asia, where we invest in almost 30 fund managers, and we have a high-impact fund portfolio, which typically invests smaller amounts in frontier markets.
Our team has developed a strong track record of backing new teams and funds, particularly in more challenging regions and sectors. We are an active limited partner and work to ensure best practices and investment management oversight.
- Ticket size: $5 million – $150 million +
You can see our portfolio by product type here.