Verdant Capital is a specialist corporate finance firm with exceptional experience transacting across the African continent. Verdant Capital is an investment manager and investment bank specialising in private credit and private equity. Verdant’s sectors of expertise include tech, inclusive financial institutions, telecoms, agri-business and manufacturing. Verdant Capital’s investment management business focuses on financial institution while their investment banking business has experience in financing most business sectors in Africa and can assist clients across a range of business sectors.
Verdant Capital has been a supporter of AFSIC – Investing in Africa since its inception and is one of the key sponsors for AFSIC 2022, “We are proud to support AFSIC as an important part of the ecosystem in financial services investing in Africa. AFSIC is at the intersection of key themes in investing in the sector, impact, technology, innovation in asset classes etc. Most of the discussions at the event align directly with our core activities.”
We sat with Verdant Capital and asked them about the work they do in Africa as well as the trends they are seeing in African Investment.
Can you tell us a little bit more about what Verdant Capital do?
Verdant Capital is the manager of the Verdant Capital Hybrid Fund, which invests hybrid capital in inclusive financial institutions, especially established technology-enabled businesses supporting micro-enterprises and SMEs. Verdant Capital also manages certain co-investment vehicles. Verdant Capital has a leading M&A and capital raising business which ranked joint first (pan-Africa ex-SA by volume) in 2021. Verdant Capital is a leading advisor to private equity in Africa. Verdant Capital is the IMAP partner firm for Africa; IMAP completes more than 250 M&A deals per year and is the largest and most active global M&A partnership.
Can you highlight some of your larger current projects?
On the investment management side, we are currently deploying capital in a small number of selected investee companies, which will be announced in the coming weeks, and we can discuss at the event. Some our recent successful projects on the investment banking side include the USD 90 million capital raise for WIOCC (pan-African digital infrastructure player), the sale of Baxibox (a leading fintech in Nigeria) to MFS Africa and the USD 50 million equity capital raise for Tugende (East African MSE asset finance business).
What is the impact of Verdant’s work on Africa’s MSME community?
Verdant Capital is a major investor in the inclusive financial institutions which fund MSMEs. We also have the leading advisory business in the sector in Africa.
Where are you seeing the big investment opportunities in Africa at the moment?
Rising interest rates in the West are negative for Africa through multiple transition mechanisms. We look out for businesses models which offer a defensive comparative advantage in sub-sectors benefiting from fundamental growth at a multiple to domestic GDP growth.
How has the slowing down of the global economy affected the flow of investment into Africa?
Higher interest rates in the West and increasing funding costs for the private sector are adding to stress in the sovereign credit curve in Africa. Higher food and oil prices increase the cost of living in Africa and reduce disposable income adding to stress in the balance of payments in Africa. Key examples of stress we have seen so far include the cost of hedging certain currencies and falling margins in certain downstream soft commodity businesses (e.g., protein and snacks).
You have attended AFSIC virtually since its inception, why does attending AFSIC work so well for you?
We are proud to support AFSIC as an important part of the ecosystem in financial services investing in Africa. AFSIC is at the intersection of key themes in investing in the sector, impact, technology, innovation in asset classes etc. Most of the discussions at the event align directly with our core activities.
What benefit do you see for other African businesses in attending ASFIC this year?
ASFIC offers an opportunity to network and to share ideas with like-minded individuals and companies from Africa or directly exposed to Africa.