Verdant holds first close for hybrid capital fund

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Verdant Capital announced the first close for its hybrid capital fund last week, garnering commitments from a development finance institution, private investors, and Verdant Capital itself. The Verdant Hybrid Capital Fund (VHCF) has raised $36 million so far, the lion’s share of which, some $34 million, is being provided by Germany’s KfW Development Bank. Verdant is planning a further two closings for the find, which eventually aims to raise a total of $100 million. Verdant anticipates wrapping up the fundraise during the last quarter of 2023.

VHCF’s strategy is to back opportunities with hybrid capital, (an intermediate capital type that sits between debt and equity), and subordinated debt in inclusive financial institutions across Africa. Typically, these will be specialist banks, microfinance institutions, leasing and factoring companies, fintech, and other non-bank financial institutions. As per our earlier reporting on the fund, the 12-year fund’s ticket sizes are expected to range from $4 million to as much as $12 million per transaction. It’s anticipated that the fund will back two opportunities a year, on average.

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