African Rivers Fund III seeks US$75m for investments in Central and east Africa

AFRICA – XSML Capital managed fund, Africa Rivers Fund III has announced that it is targeting to raise US$75 million to construct a portfolio of small business investments diversified across Central and Eastern Africa.

The fund also noted that the International Finance Corporation (IFC) was considering a US$15 million investment in its expansion operations.

African Rivers Fund III investments objective is to provide long term finance to SMEs in the form of cash generating instruments such as straight debt, debt with revenue share and debt with equity.

Acccording to XSML, SME financing is incredibly scarce in the regions where the Fund will operate, and by investing in the Fund FMO will help empower local entrepreneurs and prove itself a valuable partner for investing in local prosperity.

XSML  Capital, (the fund managers of African Rivers Fund III) was founded by two former FMO employees (Jarl Heijstee and Marcel Posthuma).

Today, XSML manages two private equity funds in Central Africa: the Central Africa SME Fund (“CASF”) and African Rivers Fund I (“ARF I”).

Both CASF and ARF I are high-impact funds that provide scarce capital to SMEs in frontier markets, and FMO has invested in both. XSML is currently raising its third fund:

African Rivers Fund III (“the Fund”) is the third fund being raised by XSML and the fund manager is hoping to build on the successful strategy of CASF and ARF I.

XSML revealed that it intends to employ a mixed mezzanine and equity investment approach to build a diversified portfolio of SME investments.

ARF III will thus target a portfolio of some 35-45 investees with target ticket sizes ranging between USD 0.25m and USD 7.5m.

The fund targets several countries in Africa which include Angola, the Democratic Republic of the Congo and Uganda.

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