CDC Group, a development finance institution based in the United Kingdom, has announced a new investment designed to support high-growth SMEs in Nigeria. To this end, CDC has made a US$15 million commitment to CardinalStone Capital Advisors (CCA).
CCA is a first-time, Nigeria-focused fund that targets SMEs across six sectors: agriculture, industrials, FMCG, healthcare, education and financial services. The CCA is, however, posed to use CDC’s capital injection to invest in companies which support job creation, as well as import substitution to diversify the Nigerian economy.
CDC has worked closely with the CardinalStone Capital Advisors team for two and a half years and played a key role in the formation of the fund. CDC is an anchor investor alongside Kuramo, a leading African investment firm, and has helped mobilise additional investment of US$15 million from the Dutch development bank FMO and NSIA (the Nigerian sovereign wealth fund).
The fund has reached US$50 million of commitments at first close. However, CCA plans to raise up to US$100 million in total commitments by the final close of the Fund.
In a statement recently released by the company and signed by the Managing Director, Clarisa de Franco, the CDC said: “As a pioneering investor in African private equity we are delighted to be supporting CardinalStone’s first fund that will bring investment and expertise to the local entrepreneurs and high growth SMEs that are vital to Nigeria’s long-term economic growth and job creation. We have worked with CardinalStone from the beginning, helping them build a team and raise other investment. CDC has invested in Nigeria for 70 years. The country plays a key part in CDC’s strategy of partnership and investment for economic growth in West Africa.”