Injaro Investment Advisors, a Ghanaian growth capital investor, has launched the GHS150m ($20m) Injaro Ghana Venture Capital Fund (IGVCF), its inaugural Ghana cedi denominated fund.

The target size for the first close, which is set for May 3, 2022, is GHS75M (~ $10m)  and it has been met.

The 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 (GHS), thus eliminating the FX pressures typically experienced by funds denominated in hard currency,” said Yaw Sampong, Executive Director at Injaro (pictured).

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 GHS22bn ($2.93bn) of capital managed by private pension schemes (as of 2020).

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 Cote d’Ivoire (up to 20%).

Established in 2009, Injaro’s experience includes managing the $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, IACHL’s investment portfolio has generated $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 GHS8m – 20m ($1.07- $2.67m), the fund seeks to partner profitable businesses within growth sectors. IGVCF will prioritize 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.

Jerry Parkes, Managing Director at Injaro, said: “Our vision for the fund goes beyond supporting businesses to drive economic growth. We also hope, through our work with 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 securitization 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.”