The International Finance Corporation (IFC) has announced an investment in the Amethis Fund III’s first closure to aid in the growth of medium-sized businesses in Africa across a variety of sectors.
Amethis Fund III will offer crucial expansion capital to ten to twelve medium-sized businesses operating in industries that are crucial to the growth of African economies, including manufacturing, fast-moving consumer products, infrastructure, and energy. Companies in nations including Côte d’Ivoire, Egypt, Kenya, Morocco, Mozambique, Senegal, and Tanzania will be the focus of the fund. Additionally, Amethis Fund III has pledged to giving at least 25% of its funding to companies run or controlled by women. Only 6% of private equity funds now allocated to sub-Saharan African companies are owned by women.
IFC will invest €40 million in the fund as equity. The initiative also contains a co-investment envelope of up to €30 million to allow IFC to co-invest alongside the Fund in particular businesses. IFC’s participation in Amethis Partners’ fund is in line with its aim to encourage private equity companies that aid in the expansion, expansion, and employment creation of medium-sized businesses in Africa.
“We are proud to welcome leading investors in the third vintage of our flagship strategy. This successful first closing serves as a testament of our recognized expertise in this industry, with a diverse, high-caliber team of 45 professionals creating value from the ground. For us, this approach provides the best conditions to support African champions by helping them to enhance their governance, their efficiency and positive impact, and also by giving them access to our wide network and growth opportunities,” said Luc Rigouzzo and Laurent Demey, Amethis Co-Founders.
“Medium-sized businesses are one of Africa’s major economic engines, creating jobs, promoting regional integration, and supporting the continent’s economic growth. Despite their potential, they often struggle to access the growth capital they need to scale. IFC’s investment in Amethis Fund III will help mobilize and catalyze much-needed equity to this critical class of companies across the continent,” said William Sonneborn, IFC Global Director for Disruptive Technologies, Creative Industries and Funds.
Private equity fundraising in Africa faces several challenges including high-risk perception, foreign exchange risk, and economic uncertainty. As a result, international investors have reduced investment allocation to the African market. IFC’s investment seeks to anchor the fund’s fundraising to help keep vital financing flowing to mid-cap companies in Africa.
The new investment is IFC’s third commitment to funds managed by Amethis Partners. In 2017, IFC invested €15 million in Amethis Fund II, a pan-African growth equity fund. In 2021, IFC committed €12.5 million to Amethis MENA Fund II, an SME-focused fund targeting investments in the MENA region.