10 December 2018

CDC makes US$106m of new fund investments in Africa and South Asia

New commitments will support SMEs and early stage businesses in Myanmar; venture capital and affordable housing in India; and real estate across sub-Saharan Africa.

CDC Group, the UK’s development finance institution, has today announced a total commitment of US$106 million to five investment funds that will provide capital to growing businesses in Africa and South Asia.

Momentum Africa Real Estate Fund

CDC’s US$30 million commitment to Momentum Africa Real Estate Fund (MAREF) is designed to support the development of greenfield industrial, residential and commercial real estate opportunities across sub-Saharan Africa.  MAREF, which is managed by Momentum Global Investment Management, will partner with Eris Property Group (a real estate developer with over 30+ year track record) to develop the fund’s projects. The fund has a strong focus on countries where CDC has limited real estate exposure including, but not limited to, Mozambique, Zambia, Uganda and Tanzania. CDC’s investment has brought MAREF’s total fundraising to US$206 million.

CDC’s Managing Director, Intermediated Equity, Murray Grant said:

“Despite significant demand, real estate development in most of sub-Saharan Africa is limited by the availability of construction finance, and the lack of experienced, institutional development platforms. Our investment in MAREF will help them to increase the stock of high-quality real estate in Africa, bringing economic opportunity and job creation to the continent. We will work closely with the fund to help them raise standards across Africa’s real estate development sector and bring much-needed skills to new markets, thereby supporting the growth of local developers and contractors.”

David Lashbrook, Head of Africa Real Estate at Momentum Global Investment Management, said:

“CDC’s considerable African investment expertise and its added focus on business integrity and environmental and social issues has helped us to improve our investment process for the benefit of our investors and the projects that we’re backing.”

Anthem Asia SME Venture Fund

CDC has made a US$10 million commitment to a Myanmar based fund that will focus on traditional SMEs and tech-enabled early stage businesses that are benefitting from rising domestic incomes and increasing internet access.

CDC is an anchor investor alongside the IFC and the Dutch Good Growth Fund, helping the fund reach a first close of US$34.5 million. This is the first fund raised by Anthem Asia which is led by two experienced partners with a strong investment track record in Asia. CDC has been closely tracking and supporting Myanmar’s private equity ecosystem for 4 years. In 2015, CDC committed to Insitor, a regional focused fund targeting companies providing products and services to poor and underserved communities. In 2017 CDC invested in its first Myanmar country focused fund, Delta Capital which is investing in larger, mid-market companies.

CDC’s Investment Director, Sara Taylor said:

“SMEs can be a major driver of growth and employment, and in Myanmar the majority are in the informal sector, struggling with low productivity and poor access to growth capital and appropriate skills. Our investment in the Anthem fund will help to move more companies into the formal economy – giving firms the management skills and operational guidance they need to grow.”

pi Ventures Fund I

CDC has committed US$6 million to pi Ventures, a fund that will invest in Indian businesses that use artificial intelligence and machine learning technology to help solve problems at scale and at lower cost in areas including healthcare, logistics and fintech. The fund, which was set up by pi Partners LLP, has already invested in six companies, including SigTuple (AI-enabled blood diagnostics), NIRAMAI (non-invasive breast cancer screening), ten3T (medical grade wearable device) and Zenatix (data-driven energy efficiency company).

Stellaris Venture Partners India I

CDC has committed US$10 million to Stellaris, a fund that will invest in early-stage technology companies solving India-specific problems through disruptive business models. The fund’s investments aim to increase market access for SMEs and offer affordable services to consumers. Stellaris’ current portfolio includes an online marketplace for SMEs (Wydr); an AI-driven online healthcare consultation platform (mFine); a collaboration network for blue collar workers (Noticeboard); an automated scooter sharing network (Vogo); and a leading last-mile logistics marketplace that has expanded to some of India’s poorest states (Loadshare).

Kotak India Affordable Housing Fund

CDC’s commitment of up to US$50m will enable KIAHF to invest in affordable housing development projects primarily focused in India’s poorest and most capital-starved states. The projects will offer housing units valued up to US$50k, a level that will target customers with annual income of $7-12k such as teachers, civil servants and small business owners.

KIAHF is a single-LP managed account and is the first affordable housing-focused fund raised by Kotak Realty Funds which is part of the Kotak Group, one of India’s leading financial services organisations.

CDC’s Managing Director for Asia Funds, Muru Murugappan said:

“Around 95% of the institutional capital in the Indian real estate sector has been invested in the top six cities in India, leaving other parts of the country starved of investment for real estate development. As the only outside investor in KIAHF, CDC is playing an important role in mobilising commercial investment into the sector and the states that need it.”

Contact:

Rhyddid Carter rcarter@cdcgroup.com +44 (0)7824 552326