Frankfurt – Lion’s Head and United Capital Asset Management have been appointed Fund Managers on the Africa Local Currency Bond Fund (ALCB Fund, www.alcbfund.com) established by KfW on behalf of the German Federal Ministry for Economic Cooperation and Development.
The ALCB Fund’s mission is to support local African banks, financial institutions, agribusiness, and renewable energy companies to issue bonds and similar instruments in local currency. The Fund aims to improve and diversify access to long term funding in domestic capital markets for the benefit of Micro, Small and Medium-sized Enterprises (MSMEs)
Lion’s Head, a merchant bank based in London and Nairobi brings capital markets expertise to development finance initiatives for frontier markets. Lion’s Head advises across a broad range of capital markets and corporate finance initiatives across Africa, working with both the public and the private sector.
“The ALCB Fund is the latest innovative vehicle to have been 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”, said Bim Hundal, Chairman of Lions’ Head.
United Capital, one of Africa’s leading investment banks, has extensive experience in high profile financial executions. In 2014 the company executed the largest corporate bond issue in the Nigerian market, which was simultaneously listed on both the Nigerian Stock Exchange (NSE) and the Financial Market Dealers Quotation (FMDQ) OTC platform. Other pioneering achievements recorded by United Capital include, completion of the first mortgage securitization for a mortgage backed bond in 2007; the first Tier 2 subordinated debt issuance through the bond market; and the largest corporate bond issuance in West Africa in 2010.
“It is an honor 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”, stated Oluwatoyin Sanni. Group CEO, United Capital.
Wale Shonibare, Deputy Group CEO/Managing Director, Investment Banking at United Capital added, “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. We believe that our African market expertise will allow us to provide the necessary tailored solutions to significantly grow the Fund, and to meet KfW’s development objectives”.
On behalf of the German Federal Ministry for Economic Cooperation and Development KfW has so far invested US$32 million for the initial capitalization of the Fund, out of which USD 18.4 million has been invested in seven non-sovereign local currency bond issuances.
“Having proven the concept of an African non-sovereign local currency bond fund by sourcing and implementing the first investments and managing the fund by ourselves, we are very happy to now hand over a high impact and good credit quality portfolio to experienced fund managers, to bring the fund to a truly sizable scale”, stated Karl von Klitzing, Member of the Board of Directors of the ALCB Fund.
As fund managers, United Capital and Lion’s Head will be expected to implement an institutional upgrade, grow the Fund to a size beyond USD 100 million in the medium term.
James Doree, Director, Lion’s Head Global Partners
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About Lion’s Head
Lion’s Head is a specialized merchant bank based in London and Nairobi, focusing on emerging markets and Sub-Saharan Africa. The company provides asset management and financial advisory services across a range of sectors, including financial inclusion, agriculture, renewable energy, infrastructure, healthcare and education.
Regulated by the UK’s Financial Conduct Authority (FCA), Lion’s Head brings capital markets expertise to development finance initiatives for frontier markets.
For more information about Lion’s Head visit: www.lhgp.com
About United Capital, Plc
United Capital plc is a financial and investment services group providing bespoke value-added service to its clients. United Capital is well positioned to play a strategic role in helping African governments and citizens (both individual and corporate) achieve their strategic objectives through a robust suite of financial and investment service offerings by its Group companies: Investment Banking, Asset Management, Trusteeship, and Securities. The group is regulated by the Securities and Exchange Commission (SEC) in Nigeria.
For more information about United Capital Plc visit: www.unitedcapitalplcgroup.com