Johannesburg, South Africa, July 24, 2023—To support the growth of mid-market companies in sub–Saharan Africa, IFC today announced an equity investment of $25 million in Metier Capital Growth Fund III (MCGF III) as well as a co-investment envelope of $15 million to invest alongside the fund in select companies.
The fund, which will be managed by Metier Private Equity International, will invest in eight to twelve mid-market companies primarily in Southern and East Africa. The fund will invest in sectors including telecommunications, fast moving consumer goods, healthcare, non-banking financial services, manufacturing as well as infrastructure and energy. MCGF III will invest at least 40 percent of the fund outside of South Africa.
IFC's investment will help the fund reach its first close and, through a co-investment envelope, enable the fund to attract more follow-on equity for its investee companies. IFC will also support Metier in strengthening its gender-lens investing approach and promoting gender diversity, both within the fund manager and its investees.
"Beyond delivering top quartile returns, Metier's core objective is to contribute towards positive and sustained impact across Africa," said Paul Botha, CEO and Co-Founder of Metier. "Our active deal pipeline is characterized by growth capital investments that will develop new business opportunities that will have a positive impact on the effects of climate change, create decent jobs with a broader focus on gender-lens investing, support the connectivity of rural communities, and enhance small business development across Africa. We are excited about our continued partnership with IFC."
Private equity investment in Africa remains among the lowest in emerging markets, representing just 4 percent of total volumes. Challenges include perceptions of high risk, foreign exchange risk, high inflation, and economic uncertainty. As a result, equity financing for mid-market companies has been scarce, hindering the development of the private sector.
"A strong private sector is an essential driver for sustainable growth, job creation, market competitiveness and shared prosperity," said Sérgio Pimenta, IFC Vice President for Africa. "IFC's investment in Metier Capital's Growth Fund III will increase access to much needed private capital that will catalyze value creation for these companies and help bolster Africa's private equity industry."
IFC's investment is aligned to its strategy to strengthen the African private equity market. It will also demonstrate that investing in African markets can generate commercial returns for investors as well as positive developmental impact for the continent.
About Metier
Metier is an independent owner-managed private equity firm founded in 2003. The firm's independence is fundamental to its distinctive style, where the team forges partnerships with its portfolio companies and management teams. Since its formation, Metier has grown to comprise a team of over 40 professionals with offices in Johannesburg, Mauritius and Nairobi, and representation in London. Metier operates two parallel investment practices, the Capital Growth practice that concentrates on mid-cap entrepreneurial businesses requiring growth capital in sectors which demonstrate emerging market growth, and the Sustainable Capital practice that targets investments in energy efficiency, renewables, water and waste management businesses. For more information, visit www.metier.africa.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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