Injaro Investment Advisors Limited – a Ghanaian growth capital investor, has announced the launch of the Injaro Ghana Venture Capital Fund (IGVCF) – its inaugural Ghana Cedi denominated fund.
The GH¢150million fund launches with commitments from several private pension schemes including the Petra Advantage Pension Scheme and Petra Opportunity Pension Scheme; Ghana Education Service Occupational Pension Scheme; Axis Pension Trust, Enterprise Tier 2 Occupational Pension Scheme; and other clients of Stanbic Investment Management Services.
The launching of IGVCF represents a historic milestone in the evolution of Ghana’s capital markets. “It is the first private equity fund to be anchored primarily by local private pension funds. The fund is also denominated in local currency (GH¢), thus, eliminating the FX pressures typically experienced by funds denominated in hard currency”, noted Yaw Sampong, Executive Director at Injaro.
This milestone has been facilitated by progressive improvements in the pensions regulatory landscape, which commenced with the implementation of the 3-tier pension system in 2010, and the creation of the National Pensions Regulatory Authority (NPRA). The most recent amendments to the NPRA guidelines set a minimum target for variable income investments. This requires pension schemes to diversify their portfolios to incorporate this asset class which includes private equity. This presents local private equity fund managers the opportunity to tap into some GH¢22b (2020) of capital managed by private pension schemes.
IGVCF will invest in high potential businesses across sectors that can grow profitably, as well as contribute to job creation and sustained economic growth. The fund will make equity, quasi equity or debt investments in SMEs in the food & agribusiness, education, inclusive financial services, healthcare, manufacturing and industrial services sectors mainly in Ghana (80%), and Côte d’Ivoire (up to 20%).
Established in 2009, Injaro’s experience includes managing the US$49m impact investment fund, Injaro Agricultural Capital Holding (IACHL) – launched in April 2012. IACHL is focused on SME investments across the agricultural value chain in West Africa, with investors including CDC, FMO, PROPARCO, the Adolf H. Lundin Charitable Foundation, the Soros Economic Development Fund (SEDF), the Alliance for a Green Revolution in Africa (AGRA) and family offices based in North America and Europe. IACHL’s investment portfolio has generated US$124m in revenue and benefitted more than 3.78 million persons, mainly comprising smallholder farmers, low-income persons and their families.
Through IGVCF, Injaro will implement an investment strategy that is distinct from its first fund in sector focus, but complementary to Injaro’s objective of building sustainable African businesses. With ticket sizes ranging from GH¢8million – 20million, the fund seeks to partner profitable businesses within growth sectors. IGVCF will prioritise opportunities that are best placed to leverage new capital to create value and offer local institutional investors the benefits of the private equity asset class – better returns and diversification.
Speaking at the launch of the new fund, Jerry Parkes, Managing Director at Injaro said: “Our vision for the fund goes beyond supporting businesses to drive economic growth. We also hope – through the IGVCF – to contribute to a more vibrant capital market in Ghana. We consider private equity investments to be at the start of the investment conveyor belt that ultimately creates a variety of securitisation opportunities for the market.
IGVCF, as a private equity fund, specifically targets the most promising and fastest growing businesses, thus, providing a well-managed exposure to these growth opportunities. The opportunity is compelling – IGVCF represents more than just a private equity fund. Investing in this fund helps to build Ghana’s economy, contributes to building our capital markets and offers interesting returns for investors. Join us in making history and building a more prosperous Ghana for future generations.”