Grain millers and traders sort maize for packaging. Such groups of
entrepreneurs will be able to access money from equity funds under the
new arrangement. PHOTO by STEPHEN OTAGE
By ISMAIL MUSA LADU
In Summary
Ventures. Funds to be invested in eight to 12 companies across the East African region.
Kampala.
Small and Medium Enterprises (SMEs) that have not
matured to raise capital through the stock market can now benefit from
funds mobilised by private equity players to grow their businesses
further, trade and investment experts have said.
One such equity fund that the SMEs should take advantage of, according to the industry experts, is the $50 million (about Shs131 billion) that has been made available by Eastern Africa’s new private equity player, Ascent.
Last week, Ascent announced the first close of their =Ascent Rift Valley Fund (ARVF), which raised $50 million to be invested in growth of enterprises across Eastern Africa—with SMEs being among those targeted to benefit from the fund.
“Ascent will invest in 8 to 12 companies across the region. The investment size will be between $1million (about Shs2.6 billion) and $9 million (about Shs27 billion),” reads the press statement issued by the private equity player, Ascent.
In an interview yesterday, Capital Market Authority chief executive officer Keith Kalyegira said: “ Anything thing that helps SMEs become better is welcome. And anyone that can help SMEs with patient capital (long term capital) is even far better.”
He continued: “Private and public equity are good avenues that SMEs can take advantage of. However, the only challenge is that most of our SMEs have bad governance structures and do not pay attention to important operational details of their companies.”
Mr Edgar Mutebi, a trade analyst, told the Daily Monitor yesterday that funds provided by the private equity will help SMEs that are trying to list (raise money through capital markets) but are short of the required threshold.
He said: “SMEs can take advantage of the equity funds and then two years down the road they can hit the stock market for more funds.”
One such equity fund that the SMEs should take advantage of, according to the industry experts, is the $50 million (about Shs131 billion) that has been made available by Eastern Africa’s new private equity player, Ascent.
Last week, Ascent announced the first close of their =Ascent Rift Valley Fund (ARVF), which raised $50 million to be invested in growth of enterprises across Eastern Africa—with SMEs being among those targeted to benefit from the fund.
“Ascent will invest in 8 to 12 companies across the region. The investment size will be between $1million (about Shs2.6 billion) and $9 million (about Shs27 billion),” reads the press statement issued by the private equity player, Ascent.
In an interview yesterday, Capital Market Authority chief executive officer Keith Kalyegira said: “ Anything thing that helps SMEs become better is welcome. And anyone that can help SMEs with patient capital (long term capital) is even far better.”
He continued: “Private and public equity are good avenues that SMEs can take advantage of. However, the only challenge is that most of our SMEs have bad governance structures and do not pay attention to important operational details of their companies.”
Mr Edgar Mutebi, a trade analyst, told the Daily Monitor yesterday that funds provided by the private equity will help SMEs that are trying to list (raise money through capital markets) but are short of the required threshold.
He said: “SMEs can take advantage of the equity funds and then two years down the road they can hit the stock market for more funds.”
Source of the funds
The $50million fund was tapped from the local
institutional capital, including pension funds, in its first
fundraising. The total Kenyan institutional capital contribution to the
Ascent Rift Valley Fund currently stands at $5 million, which is 10 per
cent of total commitments. Commercial investors - local institutions and
private international investors have committed 70 per cent of the
funds. Speaking at the launch of the fund, Ascent Capital Advisory
Services’ Partner David Owino, said: “This is the first time in the
region that local pension funds have committed to invest in a private
equity fund.
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