Types of capital
We provide the flexible long-term investment that many businesses in developing countries need to grow.
We do this through two portfolios of investments: Catalyst and Growth. Through our Growth portfolio, we inject patient, long-term capital into businesses that have the potential to achieve sustainable growth while making a positive environmental, social and economic impact. Through our Catalyst portfolio, we help shape nascent markets and less commercially proven business models that demonstrate significant potential to contribute to more inclusive and sustainable economies.
When making a Catalyst investment we are mandated to take on a higher level of risk than we do for our Growth portfolio, to bring about pioneering impact at a market level – that means individual Catalyst investments require a higher impact hurdle and a lower commercial return hurdle. Nonetheless, while Growth investments may not have the capacity to take on risk in the same way as Catalyst investments, the investment process remains focused on their ability to achieve impact.
Across both portfolios of investments, we provide capital in three broad ways: direct equity, intermediated equity, and debt. We also work in partnership with other development finance institutions and can complement an existing deal.
We’ve been providing equity to businesses in Africa for 70 years. While we occasionally acquire controlling stakes, we typically take influential minority positions that allow us to work with shareholders and management, adding value in a positive and professional way.
Our equity investment teams work across our priority sectors: financial services, infrastructure, health, manufacturing, food and agriculture, construction and real estate, and education.
- Ticket size: $10 million – $150 million
We provide debt to businesses and projects in our priority sectors in four ways: project finance, corporate lending, trade finance, and lending to financial institutions.
Our team has significant experience in power, transport, and telecommunications infrastructure. Our patient, long-term approach means we’re able to provide tenors of up to 18 years.
Within corporate debt, we provide a range of debt instruments, including senior secured loans, mezzanine or promoter financing structures, and funded and unfunded guarantees. We are flexible on the length of tenor and open-minded when confronted with credit challenges.
Our trade finance investments are typically risk-sharing facilities with regional banks to increase liquidity and/or reduce capital costs.
Financial institutions lending
We lend directly to financial institutions. This provides ‘Tier 2’ capital in markets where local lenders provide only a limited amount of this type of investment.
- Ticket size: $20 million – $100 million
We invest in investment funds across our priority sectors in Africa and South Asia. We invest in country-focused funds, as well as those operating across regions.
As Africa’s largest limited partner, we support almost 70 funds operating in over 30 countries on the continent. We have a strong presence in South Asia, where we invest in almost 30 fund managers, and we have a high-impact fund portfolio, which typically invests smaller amounts in frontier markets.
Our team has developed a strong track record of backing new teams and funds, particularly in more challenging regions and sectors. We are an active limited partner and work to ensure best practices and investment management oversight.
- Ticket size: $5 million – $150 million +
You can see our portfolio by product type here.