AfricInvest, a  pan-African private equity firm, has announced the first close of FIVE, an evergreen platform for investing in financial institutions in Africa.

Through its investments, Financial Inclusion Vehicle (FIVE) expects to meaningfully contribute to improved access to financial services for a growing population in Africa.

FMO and BIO, the development finance institutions of the Netherlands and Belgium, anchored the fund with commitments of €20m and €10m, respectively.

Both were anchor investors in the AfricInvest Financial Sector Fund, a predecessor fund to FIVE.

“We are thrilled with this innovative evergreen structure designed in good cooperation with our longstanding partners Africinvest and FMO, and are confident that it will help attract the additional long-term funding needed to further support the growth of the financial sector in Africa,” said Eric Van den Bosch, Senior Investment Officer at BIO.

FMO will increase its investment to FIVE by a further €10m once additional commitments of €70m have been signed.

George Janssen from FMO said: “We are proud to support Africinvest’s new initiative FIVE, an investment vehicle with a permanent structure that is aimed at Tier II and III financial institutions throughout Africa. We believe FIVE’s evergreen structure can address some of the bottlenecks of a typical closed-end PE fund and in that way, can contribute to meaningful impact in Africa’s financial sector.”

Erik Bosman, FIVE’s Supervisory Committee Chairman, said: “The first close of FIVE marks a new milestone in the development of Africa’s financial sector, as increased access to financial services is crucial to further economic progress across the continent. I am very grateful to FMO and BIO for working with AfricInvest to establish this innovative fund that allows the investment team to build on a strong track record, and to achieve their admirable ambition of realizing universal access to financial services in Africa.”

Several institutional investors and family offices are already finalizing due diligence, and are expected to make commitments in the first half of 2018.

The target size for FIVE is €200m, to be reached over the next three to five years.

FIVE stands for Financial Inclusion Vehicle.

The number five also represents the aspiration of AfricInvest, FMO and BIO to contribute to achieving universal access to financial services in Africa, by increasing banking penetration from 20% today to 100% in the future, hence multiplying it fivefold.

FIVE has been designed to fully align the interests of investors and the manager.

Its evergreen structure enables it to meet the demands of both regulators and future partners looking for investors with the capacity to make longer-term commitments and to support portfolio companies in achieving meaningful strategic transformation.

Appropriate liquidity provisions have been incorporated to allow investors to adjust their exposure to FIVE.

Khaled Benjilani, Senior Partner at AfricInvest, said: “As we mark this important milestone in our financial sector practice in Africa, we are grateful to FMO and BIO, our investors and partners, for their continued confidence in us. We are enthusiastic about the prospect of meaningfully increasing access to quality financial services across the continent."

"In addition to Africa’s strong macro-economic and demographic backdrop, technological change is providing new opportunities, as it changes the way we live, govern, consume, communicate and conduct business. The financial services business model is also changing, and through FIVE, we are well-positioned to achieve superior returns by leveraging our understanding of both the sector and technology,” he said.