Ascent Rift Valley Fund II (“ARVF II”) is the second investment fund for SMEs in East Africa (Ethiopia, Kenya, Uganda) raised by the manager Ascent Capital. ARVF II’s investment strategy will be along the lines of ARVF I: the Fund targets 10 to 12 equity investments in SMEs in East Africa. The target sectors will be those highly exposed to growth in domestic demand in countries in the region. The investments of the ARVF II fund are expected to support just over 3,000 indirect jobs over the next 5 years in the 10 to 12 investee companies.
Client presentation
Ascent Rift Valley Fund II (“ARVF II”) is the second investment fund for SMEs in East Africa (Ethiopia, Kenya and Uganda) raised by the manager Ascent Capital (“Ascent”). It is the successor fund to ARVF I, the first vehicle raised by Ascent in 2014 (USD 78m). Since it was set up in 2012, Ascent has become a leading private equity player and a valued partner for SMEs. This success is due to its organization through a main office in Nairobi, where the investment team is based, and satellite offices in Addis Ababa and Kampala which allow it to benefit from a strong local presence (this gives it a critical capacity for origination and monitoring in countries like Ethiopia and Uganda).
Project description
ARVF II’s investment strategy will be along the lines of ARVF I. The Fund will target 10 to 12 majority equity investments (or minority with strong rights), for average tickets of around USD 8m in SMEs in East Africa (mainly Ethiopia, Kenya and Uganda). The target sectors will be those highly exposed to growth in domestic demand in countries in the region, such as social sectors (health, education), consumer products, distribution, light industry and financial services. Ascent stands out for its philosophy as a majority investor very involved in the management and institutionalization of its investee companies, which are very often family-owned (governance, ESG, recruitment of management, commercial support, etc.).
Project impact
The investments of the ARVF II fund are expected to support just over 3,000 indirect jobs over the next 5 years in the 10 to 12 investee companies. ARVF II will ensure they establish satisfactory environmental and social standards. More generally, the fund should contribute to the dynamism of capital markets in East Africa, especially for private equity which is still underdeveloped for SMEs. It should also generate tax revenues and have a positive effect on the trade balance (import substitution) in the target countries.
This investment is therefore supporting SDG 8 “Decent work and economic growth”.