Vantage Capital eyes 4th Mezzanine Fund

Vantage Capital, a prominent Africa-focused fund manager with a successful track record, is currently in the advanced stages of raising their fourth Mezzanine Fund with a target of between $300 million to $400 million. Since its inception in 2006, the company has raised over a billion dollars in funds and has made significant investments across various African countries, including South Africa, Nigeria, Cote d'Ivoire, and Ghana. One of their recent highlights includes providing $23 million in debt financing to PickAlbatros Hotels in Egypt. In a recent interview on CNBC Africa, David Kornik, a Partner at Vantage Capital, shed light on the firm's unique strategy and the key sectors they are looking to invest in moving forward. Mezzanine financing, a blend of debt and equity, provides an alternative funding solution for small and medium-sized businesses in Africa that face challenges in raising capital from traditional sources such as banks. By sharing in the upside potential of these businesses, Vantage Capital aims to support their growth and success. Kornik highlighted Vantage Capital's successful track record, having made 31 investments across 11 African countries with three previous Mezzanine Funds. Despite the challenges posed by the COVID-19 pandemic, the company's portfolio has shown resilience, with businesses bouncing back and adapting to the new normal. The recent investment in PickAlbatros Hotels stands as a testament to Vantage Capital's commitment to supporting businesses in challenging times. Looking ahead, as Vantage Capital aims to raise up to $400 million for their new fund, they are focusing on sectors that exhibit growth potential and resilience. While the firm remains sector-agnostic, they see opportunities in areas such as IT, telecoms, real estate, export manufacturing, infrastructure, outsourced services, healthcare, and education. These sectors are considered well-suited for Mezzanine financing due to their growth prospects and stability. In the real estate and property sector, Vantage Capital has significant investments, including developments in Nigeria and Kenya, as well as a smart city project in Mauritius. Despite the changing dynamics brought about by COVID-19, the company remains optimistic about the long-term prospects of the property market in Africa. With hard assets as security, Vantage Capital sees potential in strategically positioned property investments. Moreover, Vantage Capital views manufacturing in Africa as an attractive sector, citing the ability of businesses to operate with a low-cost base and export products to international markets. The sector offers the opportunity for businesses to generate hard-currency revenues, making it an appealing investment area for the fund manager. In conclusion, Vantage Capital's focus on Mezzanine financing and strategic investments across key sectors in Africa reflects their commitment to driving growth and supporting businesses across the continent. With a strong track record and a new fund on the horizon, the firm is poised to continue making a positive impact in Africa's economic landscape.