A GH¢1 billion locally based fund-of-funds (FoF) designed to channel pension capital into private equity and private debt funds has been launched in Accra.
The Ci Gaba Fund of Funds, managed by Savannah Impact Advisory, a financial advisory and fund management firm, has been able to raise GHؓ¢380 million of the GH¢1 billion to begin operations, with more than two-thirds of commitments coming from local institutional investors.
FoF is an investment vehicle that pools capital to invest in a portfolio of other funds — such as mutual funds, hedge funds, or private equity funds — rather than directly in stocks or bonds.
The GH¢1-billion blended finance vehicle is targeted at investing in a portfolio of established and emerging managers to finance small and medium enterprises (SMEs) across West Africa in sectors such as agriculture, healthcare and technology.
Following the launch, the fund will focus on deploying the GH¢380 million into partner funds while it continues its fundraising drive towards the GH¢1 billion target.
The locally anchored model is expected to help direct Ghanaian savings into Ghanaian enterprises.
Investment
The Chief Executive Officer (CEO) of Savannah Impact Advisory, Hamdiya Ismaila, said the fund would invest through other venture capital managers to channel capital to SMEs across multiple sectors with the goal of creating jobs and improving livelihoods.
“We are going to be investing in funds and then in SMEs across multiple sectors.
That drives the economy of Ghana to create jobs and improve the livelihoods of our population,” she said.
Ms Ismaila stressed that the bulk of the capital would be mobilised from within Ghana with the rest from outside, adding, “If we want to develop, we must develop at the back of our own money.”
Ci Gaba, she stated, had positioned itself as Ghana and West Africa’s first private fund-of-funds, distinct from existing vehicles such as the government-supported Venture Capital Trust Fund.
As a “mother fund,” she said Ci Gaba would pool large-scale capital and deploy it into smaller, specialist funds that were closer to SMEs and sector-specific opportunities.
Assurance
Addressing concerns from potential investors, Ms Ismaila touted Ci Gaba’s role as one of stewardship.
“We know where the money is coming from. We need to develop and build the Ghana we want. And we will make sure that the money is secured,” she said.
Ms Ismaila urged the government to foster a policy environment that enabled private sector growth rather than directly creating jobs.
She argued that scaled private businesses would generate employment if they had access to patient capital and enabling regulations.
“Government doesn’t really have to worry about creating jobs if the private sector is working and is growing and creating business and jobs.
“We need to make sure that the policies enable companies to access capital that is patient enough to allow companies to grow, not capital that is impatient,” Ms Ismaila added.
FSD Africa Investments, a UK-backed specialist development finance investor, committed $7.5 million to the first close.
Its Director, Catalyst Transactions, David Tetteh, described the fund as timely and indicated that Africa needed a financial vehicle that would safely and credibly move its capital to Small and Medium Scale Enterprises (SMEs) to enable them to grow and contribute to the economy.
He explained that although Africa, including Ghana, had enough capital, the lack of a credible financial vehicle to ensure the movement of such capital to SMEs slowed down the economic growth of the continent.
The Ci Gaba Fund of Funds by the Savannah Impact Advisory, he said, would serve as an important financial vehicle that would help to drive private capital for sustainable growth, especially for SMEs in the country and Africa as a whole.
Source:
www.graphic.com.gh