XSML, the fund manager active in Central Africa, has announced the first close of the African Rivers Fund (AFR) at USD 45 million. The African Rivers Fund is XSML’s second fund under management, after its maiden fund the Central Africa SME Fund (CASF), bringing total assets under management to USD 65 million. FMO participates in ARF with a commitment of USD 10 million (via MASSIF). FMO (together with IFC and the Lundin Foundation) have been anchor investors in CASF.
The African Rivers Fund (ARF) targets growing, well-managed small and medium-sized enterprises (SMEs) in the Central African region covering Democratic Republic of Congo (DRC), Uganda and Republic of Congo as well as Burundi and Central African Republic (CAR). The fund is named after the two most powerful rivers in Africa, the Congo and Nile Rivers, which embody the potential of the Central African region. ARF follows the successful investment strategy of its predecessor, CASF, by providing debt, equity and mezzanine finance to fast-growing companies in the Central African region.
All three current investors in CASF, IFC (a member of the World Bank Group), FMO (the Dutch development bank) and Lundin Foundation (Canadian foundation), are joined by BIO (Belgium Investment Company for Developing Countries), CDC Group (the UK development finance institution), Dutch Good Growth Fund (DGGF) and FISEA (AFD Group) - an expansion of the investor base of the African Rivers Fund, which demonstrates their commitment and support for investing in these frontier markets.
Marcel Posthuma, Managing Partner at XSML says: “The successful close of our second fund, the African Rivers Fund, demonstrates the continued interest and commitment from our investors in frontier markets like Congo DRC. The private sector in Congo has tremendous growth potential and long term capital is scarce. XSML is well placed to capture the opportunities as the first and only fund manager on the ground in DRC actively making investments in private companies in Congo, creating jobs and supporting the growth of the economy.”
Through CASF, a USD 19m fund with 80% allocation to DRC and 20% in CAR, XSML has provided risk capital with an investment size ranging from USD 100,000 to a maximum of USD 500,000. XSML has made 32 investments in SMEs across 10 sectors. CASF has been fully invested and has exited two investments. XSML believes that sustainable economic development in fast growing frontier markets as the DRC can be achieved by encouraging local entrepreneurship. Currently, many opportunities in these countries remain unexploited due to the lack of risk capital and support. By stimulating entrepreneurial endeavors, jobs and income are created. The African Rivers Fund continues CASF’s strategy with investments in between USD 100,000 and USD 5 million.
About FMO
FMO is the Dutch development bank. FMO has invested in the private sector in developing countries and emerging markets for more than 45 years. Our mission is to empower entrepreneurs to build a better world. We invest in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. www.fmo.nl
About XSML
XSML is an independent private equity fund manager, founded in 2008, with a focus on frontier markets in Africa. While building and managing funds for these markets, XSML, eXtra Small Medium Large, aims to help grow small businesses into medium and large enterprises. The managing partners have an extensive background in emerging and frontier markets in the areas of asset management, corporate and development banking and corporate restructuring. Our experience has shown that demand for finance from small and medium sized enterprises (SMEs) remains largely untapped despite increased interest in frontier markets from international investors. XSML bridges this gap between international investors and SMEs in these markets. XSML manages the Central Africa SME Fund and the newly established African Rivers Fund. XSML has a dedicated team of over 12 investment and operating professionals across our offices in Kinshasa (DRC), Bangui (CAR) and a soon to be opened office in Kampala (Uganda).
For further information please contact:
FMO
Paul Hartogsveld
T: +31 (0) 70 314 99 28
XSML
T: +31 (0) 85 273 6059
