The fund aims to address the credit gap facing mid-sized African firms and demonstrate the commercial potential of private credit in Africa.
Africa-focused Enko Capital said it has reached the first close of a private credit strategy to support mid-market firms, having raised $100m (€86m) from backers including British International Investment (BII) and the International Finance Corporation (IFC).
The Enko Impact Credit Fund is targeting a final close of $150m with a hard cap of $200m. In addition BII and IFC, investors so far include asset manager SICOM Global Fund Limited, along with unnamed backers including an African asset manager, a European impact investor, African pension funds and family offices. Individual investment amounts were not disclosed.
BII’s CEO Leslie Maasdorp said that by anchoring investment in the fund, the UK’s development finance institution intends to help build a viable private credit market that supports businesses critical to African economic growth, sending “a strong signal” that would draw in other investors.
The fund will provide US dollar-denominated private credit to mid-market firms across sub-Saharan Africa. Investee firms being targeted are established, cash-generating businesses in non-cyclical sectors such as agriculture, telecommunications, manufacturing, renewable energy, and financial services.
Enko Capital said the fund seeks to address the structural credit gap facing mid-sized African firms and demonstrate the commercial potential of private credit in Africa, by offering flexible, tailored financing to enterprises often overlooked by traditional lenders.
Alain Nkontchou, Enko Capital’s managing partner and co-founder, said success in reaching a first close for the fund shows growing investor confidence in using private credit as a sustainable development tool in Africa.
“With the support of leading international institutional development and impact investors and local partners, the fund is strategically positioned to offer customised capital solutions to high-quality, mid-market SMEs, unlocking growth, supporting job creation, and advancing sustainable development, while generating compelling risk-adjusted returns for our investors, he said.
Enko Capital has built up a $1.3bn portfolio since it was founded in 2008 by Cameroonian banker Nkontchou and his brother Cyrille, via strategies including debt, private debt, equity and private equity investments across Africa. The asset manager has offices in London, Johannesburg, Abidjan and Port Louis, Mauritius.
In August, Nkontchou reached an agreement to buy a 21.22% stake in the parent company of pan-African financial services group Ecobank from Nedbank for $100m though his private investment vehicle Bosquet Investments Ltd. Enko Capital acted as lead financial advisor to Bosquet on that transaction.
