Lion’s Head and United Capital Asset Management have been appointed fund managers for the Africa Local Currency Bond Fund.
The fund was established by KfW on behalf of the German Federal Ministry for Economic Cooperation and Development.
The ALCB Fund is meant to support local African banks, financial institutions, agribusiness, and renewable energy companies to issue bonds and similar instruments in local currency, according to a statement by the United Capital on Wednesday.
It said the fund is aimed at improving and diversifying access to long-term funding in domestic capital markets for the benefit of Micro, Small and Medium-sized Enterprises.
On behalf of the German Federal Ministry for Economic Cooperation and Development, KfW has so far invested $32m for the initial capitalisation of the fund, out of which $18.4m has been invested in seven non-sovereign local currency bond issuances.
The Chairman, Lions’ Head, a merchant bank based in London and Nairobi, Bim Hundal, was quoted as describing the ALCB Fund as the latest innovative vehicle to be established by the group, following similar initiatives in microfinance, agri-finance, interbank lending and foreign exchange hedging.
“Lion’s Head is known for financial innovation and pushing boundaries in the markets in which we operate and KfW has a long track record of promoting local financial sector development in Africa.
“We are excited to add the ALCB Fund to our asset management platform. It exemplifies our commitment to bringing about change through the use of targeted, financially viable investment strategies.”
As fund managers, United Capital and Lion’s Head will be expected to implement an institutional upgrade, grow the fund to a size beyond $100m in the medium term, according to the statement.
The Group Chief Executive Officer, United Capital, Oluwatoyin Sanni, was quoted as saying, “It is an honour to be selected as fund managers alongside Lion’s Head in the management of the ALCB Fund. This further validates our capability and service proficiency strength at United Capital.”
The Deputy Group CEO, Mr. Wale Shonibare, who is also the Managing Director, Investment Banking, United Capital, said, “At United Capital, we are focused on delivering high impact innovative investment strategies for our clients. KfW has taken the first step in establishing the fund to invest in local currency bonds in Africa.
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Source : Punch