18 October 2021

CDC backs first private equity fund from Summit Africa

  • The alternative asset management firm’s private equity fund secured US$115 million in commitments for long-term investment
  • The fund will support United Nations Sustainable Development Goals on Good Health and Well-being, Quality Education, Decent Work and Economic Growth and Reduced Inequalities (SDGs 3, 4, 8 and 10)
  • The fund has been approved for the 2X Challenge qualification— a commitment by the development finance institutions (DFIs) of the G7 to mobilise US$15 billion by the end of 2022 toward investments that support women’s economic empowerment in emerging markets

Summit Africa announced the final close for its Impact-focused private equity fund (Summit Private Equity Fund I (“SPEF I”)), with total commitments of R1.6 billion (US$115 million), exceeding its initial target. With this capital, Summit will direct investments to small and medium-sized enterprises (SMEs) in rural and peri-urban areas across South Africa, focusing on the education, healthcare, and financial services sectors. The inaugural fund aims to improve accessibility, affordability and inclusion at company and end-customer levels, for previously disadvantaged groups and hard-to-reach communities.

At its final close, SPEF I had received commitments from 9 leading institutional investors across South Africa and CDC Group, the UK’s Development Finance Institution, a significant milestone for Summit Africa. Funding from the diverse group of investors will enable SPEF I to play a role in addressing the high unemployment, inequality and economic disparity in South Africa. Moreover, Summit will provide both financial and strategic support to its investees, helping them set up the framework to increase gender and ethnic diversity across their value chains, leading to improved economic opportunities for marginalised groups.

To date, SPEF I has deployed approximately 20% of its capital in three investments in South Africa, with a fourth investment to be concluded shortly.

Tomi Amosun, the Managing Partner of Summit Africa, said: “The fund is grateful for the support and commitments received towards the final close. This successful close demonstrates the strength of Summit Africa’s investment platform, team, and our fully integrated ESG and impact strategy. For private equity investors, the ongoing Covid-19 pandemic has reinforced the importance of ensuring long-term social sustainability. To this end, the fund will target investments in the healthcare, education, financial services, and ICT services sectors in the Common Monetary Area. It will focus on partnerships that can create jobs and improve access, quality, and affordability within the target sectors. This firmly aligns the fund to the objectives of the UN Sustainable Development Goals and the South African government’s National Development Plan.”

Sara Taylor, Director and Head of SME Funds, CDC Group, said: “Boosting capital flow to SMEs remains an integral step toward ensuring sustainable development in any market, and South Africa’s is no exception. CDC is pleased to be backing a fund with a specific strategy of investing to improve access and affordability in key sectors such as healthcare, education and financial services. We’re thrilled to be backing an inclusion-focused fund manager that is committed to women’s economic empowerment and whose vision aligns with our investment objectives of fostering equitable growth in South Africa. We’re confident that this partnership signals the vast opportunity to invest for transformative long-term inclusive economic impact throughout the country.”

Summit Africa was founded in 2016 and is a specialist black-owned and managed investment manager and licensed Financial Services Provider (FSP).

CDC is becoming British International Investment