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Vantage Mezzanine IV Feeder Partnership

Customer

Vantage Capital (Vantage) has raised and deployed three mezzanine investment funds across Africa prior to DEG’s USD 21 million commitment to Vantage’s fourth mezzanine fund. Vantage is an existing, longstanding and trusted DEG relationship with a proven track-record.

Funding Objective

DEG is committing a total of USD 21 million equity capital to the fund. Vantage’s key focus is on mid-cap owner-managed companies in their growth phase which are constrained by access to capital. This is especially prevalent in markets where local banks are focusing on larger more established companies. The inherent capital supply gap and opportunity for mezzanine funding is further exacerbated in the COVID-19 environment. The funds will be used to fund a sector agnostic pipeline across the African continent.

Reasons for financing

The fund will drive growth in owner-managed mid-cap businesses creating decent jobs and generating local taxes. Also insures business ownership remains in local hands.
The investment will improve business integrity, governance structures and ESG practices on fund level and on investee level as the need for corporatization is especially prevalent in mid-cap companies.

Since being an anchor investor in Vantage’s first fund, DEG holds a longstanding relationship with Vantage. Consequently, DEG’s participation has a strong signaling effect for other investors.

The project fits with DEG’s strategy of supporting SME in developing countries.

Region Africa (Sub-Sahara)
Country Supraregional
Sectors Financial Sector
Signing Date 11-2021
Funding USD 21 Million
Source of Funding DEG's own funds
Environmental & Social Category
Risk categorization on environmental and social impacts:
A = High risk; Investments with significant potential adverse social or environmental impacts that are diverse, irreversible or unprecedented. These impacts cannot be mitigated or remedied or only at significant costs.
B+ = High Medium Risk; Investments with limited potential adverse social or environmental impacts that are site-specific addressed through mitigation measures, but having specific features which can have potential significantly more adverse social or environmental impacts.
B = Low Medium Risk; Investments with limited potential adverse social or environmental impacts that are site-specific and readily addressed through well-known mitigation measures.
C = Low Risk; Investments with minimal or no adverse social or environmental impacts.
FI-A = Financial Institutions High Risk; Financial Institutions with business activities or projects with significant potential adverse social or environmental impacts or risks.
FI-B =Financial Institutions Medium Risk; Financial Institutions with business activities or projects with limited potential adverse social or environmental impacts or risks.
FI-C =Financial Institutions Low Risk; Financial Institutions with business activities or projects with minimal or no adverse social or environmental impacts or risks.

FI-B
Website of the customer https://www.vantagecapital.co.za/

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