Today, Dutch fund manager XSML announced the final close of its Central Africa SME Fund (CASF). With increased commitments from two of its existing investors, FMO and Lundin Foundation, the fund reached a final close of USD 19 million.
Kinshasa, Democratic Republic of Congo
To date, the fund has made 12 investments, 9 in DRC and 3 in CAR, in a wide variety of sectors including agri-business, education, healthcare, information technology, manufacturing, pharmaceutical production, telecom and transport. CASF expects to make a total of 35 investments over the life of the fund.
Jarl Heijstee, Managing Partner at XSML said: “With the increased funding from our investors the fund can provide long term risk capital to an additional 8 to 10 SMEs in DRC and CAR. Long term capital remains scarce in Congo and the Central African Republic. The increased capital commitment is also a testimony from our current investors that investing in SMEs can be done in a sustainable, profitable manner in these frontier markets”
Natalie Shriber, Investment officer at FMO commented: “DRC and CAR remain challenging investment geographies, particularly in the SME space, but CASF and XSML are proving that financial and social returns are achievable and we are very proud to back them in this exciting venture.”
Stephen Nairne, executive director at Lundin Foundation stated: “From our perspective, there is both a business opportunity and moral imperative to invest in post-conflict settings. XSML’s management team has done a superb job of navigating two very complex business environments, and we are pleased to increase our level of support.”
CASF is a fund investing in small and medium-sized enterprises in the Democratic Republic of Congo (DRC) and the Central African Republic (CAR). The fund believes in achieving sustainable economic development by encouraging entrepreneurship in the fast growing frontier markets of DRC and CAR. Currently, many opportunities in these countries remain unexploited due to the lack of risk capital and support. By supporting such entrepreneurial endeavors, jobs and wealth are created. CASF allocates 80% of its risk capital to DRC and 20% to CAR, with an investment size ranging from USD 100,000 to a maximum of USD 500,000. Anchor investors in CASF are IFC, FMO and the Lundin Foundation. CASF operates from its offices in Kinshasa, DRC, Bangui, CAR and Amsterdam, The Netherlands.
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.3 billion, FMO is one of the largest European bilateral private sector development banks.
About Lundin Foundation
The Lundin Foundation is a philanthropic organization founded originally by the Lundin family. The Foundation is currently supported by a number of publicly traded natural resource companies committed to the highest standards of corporate responsibility. The Lundin Foundation embodies the entrepreneurial spirit of the Lundin family. The Foundation provides risk capital in the form of investments into high potential small- and medium-sized businesses, with a view to generating wealth and employment needed to alleviate poverty on a sustained basis. It also provides strategic grants to early stage innovations and for technical and managerial assistance.
XSML is an independent private equity fund manager with a strategic focus on emerging markets. As an architect building new funds and local fund managers in frontier markets, XSML, eXtra Small Medium Large, aims to grow small businesses into medium and large enterprises.
XSML was founded in 2008. The managing partners have an extensive background in emerging markets in the areas of asset management, corporate and development banking and corporate restructuring. Our experience have shown that demand for finance from small and medium sized enterprises (SMEs) remains largely untapped despite increased interest in emerging markets from international investors. XSML bridges this gap between the international investors and the SMEs in emerging markets.