13 December 2016

CDC backs Afghanistan’s only private equity fund

InFrontier Afghanistan Fund raises US$22m at first close with investors CDC Group plc and the Dutch Good Growth Fund

The InFrontier Afghanistan Fund, the only private equity fund focused on Afghanistan was launched this week and has reached a first close of US$22m with investors that include CDC, the UK’s development finance institution and the Dutch Good Growth Fund, an initiative of the Dutch Ministry of Foreign Affairs.

The fund, which is managed by London and Kabul-based, InFrontier Ltd, will invest in established businesses that have the potential to become market leaders in the country, focusing across multiple sectors and making long term investments.

InFrontier sees the potential to generate commercial returns to investors whilst supporting socioeconomic development in one of the world’s most challenging markets. The team behind the fund have already made a number of investments, including in the country’s first and largest pharmacy chain.

Private sector investment is the most effective and sustainable form of development in a post-conflict economy such as Afghanistan,” said Felix von Schubert, Director at InFrontier Ltd.  “This is a landmark Fund that will enable InFrontier to build on three years of investment track record in Afghanistan,” commented Benj Conway, Director at InFrontier Ltd.

CDC is a pioneering investor with a mandate to invest into some of the world’s hardest places. That’s why we’re backing InFrontier, the team behind Afghanistan’s first private equity fund. This is a tough environment in which to operate but we have been impressed by their commitment, their understanding of the market and their strong local relationships. CDC’s US$15m investment will support the Afghan economy by increasing access to finance, boosting job creation and potentially attracting new private sector investors,”  Diana Noble, CEO of CDC Group.

After over 10 years of international focus and a period of substantial economic growth as a result of unprecedented economic aid, Afghanistan has entered a new phase, focusing on domestic capacity, modernisation of urban infrastructure, regional trading relationships and the strength of a young, internet-enabled population, half of which is under 15 years of age.

“The Dutch Good Growth Fund (DGGF) aims to boost access to finance for Small and Medium sized enterprises in underserved markets, particularly in fragile states. We believe that InFrontier can set an example, also for private investors, by demonstrating that market based investments in one of the world’s most challenging countries are possible, thereby contributing to financial ecosystem development and job creation,” says Steven Evers, Managing Director of Triple Jump, Investment Manager of the DGGF

InFrontier will hold additional closings for the Fund with a final closing scheduled for the end of 2017.

About InFrontier Ltd

InFrontier is a specialist frontier-market investor authorised and regulated by the Financial Conduct Authority (FRN 605294).  It is the first international private equity firm with a dedicated team and active investments in Afghanistan.

About CDC Group

CDC Group plc is the UK’s development finance institution.  Wholly owned by the U K Government, it invests in sub-Saharan Africa and South Asia with the aim of supporting economic development in order to create jobs.

CDC provides capital in all its forms, including equity, debt, mezzanine and guarantees.  It has net assets of £3.9bn CDC has invested in Africa and Asia since its establishment in 1948.  Find out more at www.cdcgroup.com

About Triple Jump, Investment Manager of the Dutch Good Growth Fund

Triple Jump is an independent responsible asset manager focussed on impact investments in emerging markets. With a main focus on providing solutions for small businesses through financial sector development, Triple Jump has over a decade of experience in combining social and financial returns for its investors. Triple Jump is headquartered in Amsterdam, has regional offices in Kenya, Peru, Mexico, Thailand and Georgia and its investment portfolio investment portfolio spans more than 60 countries.