IFC proposes $20m investment in Abraaj credit fund

The vehicle, Abraaj Global Credit Fund (AGCF), has a target of $500 million, according to a disclosure. IFC’s commitment would not exceed 20% of the total corpus. AGCF will provide growth capital in the form of direct lending to mid-sized companies in Africa, Asia, Latin America, the Middle East and Turkey, with a focus on consumer-driven sectors.

IFC noted that high-growth companies in the mid-market segment have traditionally suffered from limited access to long-term debt capital to sustain their growth. The development finance institution (DFI) believes AGCF will provide an attractive and viable alternative to equity investments for these companies. It also expects Abraaj to help investees improve operational efficiency.

The investment will also contribute to IFC’s job creation goals, since companies in the mid-cap segment historically have been the most effective at creating employment opportunities. The DFI expects to help AGCF attract additional institutional investors by lending credibility to its strategy, and will also seek opportunities for co-investment by offering senior debt alongside AGCF’s mezzanine-focused products.

IFC previously backed Abraaj Pakistan Fund I, the group’s Pakistan-focused private equity fund focused on small and medium-sized enterprises with a target of $200 million.

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• Topics
• Central Asia
• Fundraising
• LPs
• Mezzanine
• Asia
• IFC
• The Abraaj Group