The African Development Bank has approved a $15m equity investment in Verod Capital Growth Fund III, a private equity fund that will make investments in high growth middle market companies in West Africa.

“The Fund will help accelerate investments in small and medium scale enterprises (SMEs) in the West African region. This is key to job and wealth creation, knowledge transfer and scaling up of local businesses,” said Abdu Mukhtar, the African Development Bank’s Director of Industrial and Trade Development. 

“The Fund will provide an important vehicle to growing SMEs in Africa, which are a key pillar to the continent’s industrialization drive,” he added.

The Fund, which targets $150m, will invest in Nigeria, Ghana (core focus) as well as Liberia, Sierra Leone and the Gambia.

The Fund’s investments will be in companies in consumer driven sectors including light industrials, fast moving consumer goods, education, financial services and agro processing. 

Investment ticket size per deal will be between $5m and $20m for controlling equity stakes with an average holding period of five years. 

The Fund will also acquire minority interest with significant protection and agreed execution plan in compelling investments.

Verod Capital Growth Fund III will have a direct and measurable impact on individual businesses in West Africa while improving their ability to expand thereby providing benefits in terms of government revenue and job creation to the countries’ domestic economies. 

This is in line with the Bank’s Private Sector Strategy of supporting projects that have a strong impact on job creation, economic growth and poverty alleviation.

Verod Capital Partners, the fund manager, is an experienced indigenous private equity firm based in Nigeria that has extensive knowledge of the Anglophone West Africa market. 

It also possesses a strong record of accomplishment in SME investments. 

Since 2008, Verod Capital Partners has invested in 16 SME companies in the region.